Date: Monday, September 28, 2020
Source: The Atlantic
All summer, I tried to buy things, and mostly I failed. I signed up for two separate wait lists for out-of-stock black spandex bike shorts, which I needed for the Peloton I had bought, itself back-ordered for two months. I also added my email address to a wait list for curtain rods, remembering how the shifting fall sun broils the kitchen table that’s now my office. When word from Bed Bath & Beyond came weeks later to let me know they were back on sale, I was too slow on the draw—they sold out about as swiftly as hand sanitizer did in March. Over the weekend, I believed I had acquired replacements for my worn-out bed linens, but my email receipt contained a confession: The sheets would arrive, at best, around Halloween.
When I asked Steve Rowen, a managing partner at the retail-analytics firm Retail Systems Research, if these inventory problems were as widespread as my personal frustrations suggested, he had to stifle a laugh before answering me: “Absolutely.” Similar problems currently dog all kinds of retailers, and they have for months. At the beginning of the pandemic, when most people assumed that things would be back to normal in weeks or months, retailers and manufacturers “weren’t really in a hurry to shift gears and make a lot of expensive decisions,” Rowen said. “I don’t think anyone really had any indication as to how long this pandemic and its effects were going to be felt.”
Before March, online shopping had precisely the opposite problem. The internet is full of a near-infinite overabundance of stuff, all available at a moment’s notice. More than 150 million Americans have access to Amazon Prime, which promises a two-day turnaround on millions of items that can be dispatched to your home with literally one click. Sorting through the immense milieu of online retail has become a business unto itself, with popular websites such as Wirecutter and The Strategist offering tried-and-tested recommendations to combat the dysphoria that typing “bath towels” into a search box would otherwise summon.
In just a few months, the pandemic has turned the all-encompassing, carefully constructed institution of American consumerism on its head. Supplies of basic household goods such as paper towels and all-purpose flour have only partially recovered, and mundane, seemingly random items join the list of shortages constantly—inflatable kayaks, kettlebells, ceramic tile, seeds, foot peels, many things sold in aluminum cans. The problem of pandemic commerce doesn’t lie simply with low supply or high demand. Instead, the coronavirus has eaten away at the entire system by which things are bought and sold in America, and few signs of improvement are on the horizon.
Since millions of Americans started spending a lot more time at home, many of them have been making very similar decisions about how to do so comfortably. According to Rowen, that has helped create supply issues in all sorts of categories: food, cleaning products, medication, exercise equipment, outdoor gear, furniture and home decor, renovation supplies, home electronics, office supplies, loungewear, and beyond. At the start of the year, no one could know that standing desks and kiddie pools would become hot commodities. But this far into the pandemic, shortages aren’t persisting only because of what’s suddenly trendy.
To understand why you still can’t find your preferred migraine medication or your usual brand of dog food, you have to start with where those products begin: manufacturing. Long before most Americans had a hint of the disaster to come, the inventory of many products began to thin behind the scenes. The United States imported more than half a trillion dollars’ worth of products from China in 2018, about 20 percent of the country’s total annual imports. When China went into lockdown in late January to stanch the spread of the coronavirus, the country’s enormous manufacturing sector screeched to a halt. That paralyzed the flow of all kinds of things into the United States—strollers, gym clothes, Nintendo Switch consoles, and crucial components for products assembled in other countries, such as textiles for clothing and parts for cellphones and computers. When those components disappeared, some assembly lines in countries such as Vietnam and South Korea went idle, compounding the crisis in the U.S.
Brands and retailers that relied on imports from China or elsewhere in Asia began considering suppliers in Latin America, Europe, or the U.S. to pick up the slack. But as those searches got under way, the coronavirus spread to more countries, shutting down many manufacturing facilities around the world, at least temporarily.
Then, having controlled the coronavirus, Chinese manufacturing rebounded. “As soon as China was up and running, and the United States’ manufacturing facilities weren’t, we started importing more goods from China than ever before,” Rowen said. But an elevated reliance on things produced half a world away comes with some risks. Goods make their way from Asia to the U.S. on massive cargo ships, and the shipping industry is barrelling toward a labor crisis: Hundreds of thousands of workers are currently stranded at sea because their home countries’ pandemic travel restrictions prevent them from coming ashore. Abandoning them on ships threatens to collapse global shipping by exhausting and abusing workers currently at sea while driving those waiting for work to other industries. Meanwhile, the rest of the world—which supplies the remaining 80 percent of imported goods sold in the U.S.—has yet to return to full manufacturing capacity.
No matter where a product is made, it has to be packaged before it can be shipped or stocked on a shelf, creating yet another obstacle. Plastic bottles and pouches, cardboard boxes, and aluminum cans all have to be manufactured too, and often with expensive machinery that can make only a very specific type of bag or bottle. It doesn’t matter how much hand sanitizer you make if you don’t have the right thing to put it in. The consumer supply of flour is still recovering, in part because mills spent months fighting over a finite supply of the small paper sacks it’s packaged in. There was always plenty of flour, but someone baking sourdough for the first time doesn’t want one of the giant bags that typically get sent to restaurants.
Once products are manufactured, packaged, and imported, they still have to be distributed to warehouses and stores, which has become its own bottleneck. The pandemic has made long-haul trucking more dangerous and difficult—in the spring, truckers lacked protective gear and sanitizing equipment, and many of the places where they’d normally get a night’s rest or a hot meal had closed due to lockdowns. Since then, demand for truckers’ services has surged along with demand for certain types of products, and some trucking companies have capitalized on it by switching on short notice to routes that pay better, adding even more chaos to the scramble to get sought-after products onto shelves. Even when items make it onto a truck, more slowdowns await: More trucks are arriving than warehouses and stores usually deal with, and they have only so many loading docks and so many hours in a day.
If you do manage to buy a product right now, it might be a while before you see it. Many brick-and-mortar stores were shut down for months, pushing more shoppers online and putting enormous pressure on shippers in the process. In late July, UPS reported a 65 percent jump in shipments to homes over the previous quarter. Like with commercial shipping, there are only so many trucks and so many people to do the backbreaking work of loading, driving, and unloading them. At the same time, policy changes have made the country’s largest package carrier, the United States Postal Service, slower and less reliable. Packages languish in distribution centers for days or weeks, and some truckers drive their routes with no mail onboard because of new rules stipulating that they must leave on time. Food spoils, live animals die, some packages disappear entirely.
As is the case with America’s larger pandemic failures, the consumer system had begun to rot long before the coronavirus made its brittleness obvious. American corporations have spent decades squeezing every last dollar out of the market, largely at the expense of its flexibility and resilience. The worst of it started 30 years ago, Rowen said, when Walmart crushed local competition across the country and popularized the “just in time” inventory model. Costs are kept low by keeping very little on hand, and shelves are restocked with freshly delivered products; there are no paper towels or sweatpants waiting to be called into duty. In a crisis, this means that store shelves empty quickly. People panic and start hoarding or hunting for things online, depleting those supplies as well. “Efficiency is great if there’s no interruption of any sort and if things go exactly as planned,” Rowen said. “Unfortunately, at least for the foreseeable future, there is really no ‘according to plan.’” It’s not just a pandemic that can cause this kind of logistical chaos. Hurricanes, wildfires, and major civil unrest can all tank the best-laid plans of executives trying to wring profit out of a business through “efficiency.” The United States is currently undergoing all four crises at once.
This would all be much less important if everyone trying to order things online were as lucky as those of us searching for cute workout clothes or new bedding. But America’s consumer system isn’t just a repository for people’s disposable income. Upper-class pleasures jockey for space on a truck alongside vital medications and the basic necessities of everyday life for the homebound or those in underserved communities. The market responds to incentives that often don’t serve the interests of the people for whom it is supposed to be a lifeline—earlier this summer, some postal workers accused the USPS of prioritizing Amazon packages over other, more vital types of mail because of the mega-retailer’s lucrative contract with the agency. (The Postal Service neither confirmed nor denied the move, but said it was “flexing resources daily,” depending on demand.) Manpower, packaging, and space on trucks aren’t meted out according to need, but on corporations’ and consumers’ ability and willingness to pay. The desires of the wealthiest Americans are always going to come first, even as shortages endure.
And shortages will endure. The United States’ disastrous coronavirus response means the supply chain has scant opportunity to regain its pre-pandemic stability, let alone anticipate and prepare for new changes in a consumer market unique the world over for its enormous per-capita scale and its reliance on cheap foreign labor. There’s no quick fix. Retailers don’t want to stockpile the supplies consumers need, because it’s expensive and they don’t want to be caught on the hook if demand evaporates. Sending the bulk of America’s manufacturing capacity overseas took decades, Rowen said, and bringing a meaningful portion of it back to help shorten shipping times and make the market more flexible would take just as long. In the meantime, he suggested, try to imagine what you might need or want ahead of time. Get those orders in while you can.