Where Did All the Stuff Go?

Canned drinks. Sneakers. Computer chips. By now, you’ve probably heard: The world has run short of many products. In an era in which we’ve become accustomed to clicking and waiting for whatever we desire to arrive at our doors, it’s been a bit of a shock to find empty store shelves and long waits for back-ordered products. Here’s a look at what’s gone wrong.

Canned drinks. Sneakers. Computer chips. By now, you’ve probably heard: The world has run short of many products. Clicking and waiting for whatever we desire to arrive at our doors has become the norm. That’s why it’s been a bit of a shock to find empty store shelves and long waits for products. Here’s a look at what’s gone wrong.

The pandemic has disrupted nearly every aspect of the global supply chain—the usually invisible pathway of manufacturing, transportation, and logistics that gets goods from where they are produced, mined, or grown to where they’ll be used. At the end of the chain is a company or a consumer who pays for the finished product.

The pandemic has disrupted nearly every aspect of the global supply chain. That’s the usually invisible pathway of manufacturing, transportation, and logistics that gets goods from where they are produced, mined, or grown to where they’ll be used. At the end of the chain is a company or a consumer who pays for the finished product.

The disruptions go back to the start of the pandemic in 2020. Factories in parts of the world that produce a lot of our goods—places like China and Vietnam—were hit hard by Covid. Many factories shut down or reduced production because workers were sick or in lockdown. In response, shipping companies cut their schedules, expecting a drop in demand for moving goods around the world.

That turned out to be a terrible mistake. Demand for some things, like restaurant meals and vacations, did collapse. But Americans took the money they used to spend on those things and redirected it to stuff for their homes, which were suddenly doubling as offices and classrooms. They bought printers for their bedrooms, video game consoles for their basements, and waffle irons for their kitchens. The timing and quantity of all these purchases swamped the system.

The disruptions go back to the start of the pandemic in 2020. Places like China and Vietnam produce a lot of our goods. Factories in those parts of the world were hit hard by Covid. Many factories shut down or reduced production because workers were sick or in lockdown. Shipping companies also expected a drop in demand for moving goods around the world. In response, they cut production and employee schedules.

That turned out to be a major mistake. Demand for some things, like restaurant meals and vacations, did drop. But Americans took the money they used to spend on those things and used it to buy stuff for their homes. Many homes were suddenly doubling as offices and classrooms. People bought video game systems for their basements and waffle irons for their kitchens. And they even got printers for their bedrooms. The timing and amount of all these purchases overloaded the system.

Many tried to meet the pandemic demand, but this created its own problems. Factories buy components to make the things they export. For example, a computer made in China may require a chip from Taiwan or Malaysia, a display panel from South Korea, and parts drawn from around the world.

The steep surge in demand clogged the system for getting goods to factories that needed them. At the same time, finished products—many of them made in China—piled up in warehouses and at ports in Asia because of a shortage of shipping containers, the huge steel boxes that carry goods on enormous vessels.

Many tried to meet the pandemic demand, but this created its own problems. Factories buy parts to make the things they export. For example, a computer made in China may require a chip from Taiwan or Malaysia, a display panel from South Korea, and parts drawn from around the world.

The huge surge in demand clogged the system for getting goods to factories that needed them.

Many of these goods are made in China. These products have piled up in warehouses and at ports in Asia because of a shortage of shipping containers, the huge steel boxes that carry goods on enormous vessels.

They got stuck in the wrong places. Early in the pandemic, as China shipped huge volumes of protective gear such as masks all over the world, containers were unloaded in places like West Africa and South Asia that don’t send much back to China. So empty containers piled up in those places just as Chinese factories were producing an abundance of other goods destined for North America. With too few shipping containers available, even huge companies like Target and Home Depot have waited weeks or months to get their products onto ships and heading toward stores.

Meanwhile, the ships that are making it to the U.S. are getting stuck in a massive traffic jam at the ports. In Los Angeles and Oakland, California, dozens of ships have anchored out in the ocean for days before they could unload. With many dockworkers and truck drivers in quarantine, fewer people were available to unload and transport goods, contributing to the backup.

They got stuck in the wrong places. Early in the pandemic, China shipped huge amounts of protective gear such as masks all over the world. Many containers were unloaded in places like West Africa and South Asia that don’t send much back to China. So empty containers piled up in those places. At the time, Chinese factories were producing large amounts of goods to be sent to North America. But there weren’t enough shipping containers available. Even huge companies like Target and Home Depot have waited weeks or months to get their products onto ships and heading toward stores.

Meanwhile, the ships that are making it to the U.S. are getting stuck in a massive traffic jam at the ports. In Los Angeles and Oakland, California, dozens of ships have waited out in the ocean for days before they could unload. And many dockworkers and truck drivers had to quarantine. As a result, fewer people were available to unload and transport goods. That contributed to the backup.

Most things that are manufactured—from chemicals to cars to electronics. A paint company needing 27 chemicals to make its products may be able to buy all but one. But that one—stuck on a container ship off Los Angeles—is enough to halt production.

Most things that are produced—from chemicals to cars to electronics. A paint company needing 27 chemicals to make its products may be able to buy all but one. That one chemical might be stuck on a container ship off Los Angeles, and it’s enough to halt production.

Congestion at U.S. ports is also wreaking havoc on exports, especially farm crops. Because it’s taking weeks instead of days to unload products that ships are bringing into the U.S., many shipping companies don’t want to waste additional time waiting to load up agricultural products they’d normally take back to Asia. The resulting delays can cause perishable products to spoil and cost farmers millions of dollars.

Congestion at U.S. ports is also wreaking havoc on exports, especially farm crops. It’s taking weeks instead of days to unload products that ships are bringing into the country. As a result, many shipping companies don’t want to waste more time waiting to load up agricultural products they’d normally take back to Asia. The resulting delays can cause perishable products to spoil and cost farmers millions of dollars.

The pandemic has certainly made supply and demand extremely volatile. But that came on top of decades of companies intentionally keeping very small inventories to limit their costs. A dollar that a car company spends to warehouse computer chips as a hedge against supply chain troubles is a dollar that it can’t use on something else.

The pandemic has certainly made supply and demand unpredictable. But that came on top of decades of companies intentionally keeping very small inventories to limit their costs. A dollar that a company spends on potential supply chain troubles is a dollar that it can’t use on something else.

The result is rising prices. It’s classic supply-and-demand economics: When the supply of products is reduced, prices go up because there’s more competition to buy what’s available. When prices continue to rise, economists call that inflation.

The result is rising prices. It’s classic supply-and-demand economics. When the supply of products is reduced, prices go up. That happens because there’s more competition to buy what’s available. When prices continue to rise, economists call that inflation.

No one really knows, but economists think it’ll take well into 2022 and maybe longer. It depends on when the pandemic disruptions wind down.

No one really knows, but economists think it’ll take well into 2022 and maybe longer. It depends on when the pandemic disruptions wind down.

Peter S. Goodman is the global economics correspondent for The New York Times.

Peter S. Goodman is the global economics correspondent for The New York Times.