We are hoping the supply chain keeps up this go around.
More than 84,000 people in China have died of Covid, that vast majority of those in the past couple months after the lifting of extreme zero-Covid quarantine regulations that had the population on the verge of revolution. By contrast, in the U.S., there have been 1.1 million Covid-related deaths since the virus emerged around this time in 2020. Worldwide 6.8 million people have died, so confidence in China’s official numbers remains tenuous at best. Global industry is hoping they have a handle now on how China’s virus experiences impact supply chains but time will tell.
There was a kink in the chain before people at the Wuhan meat market started dropping dead in late 2019, but every supply chain weakness was exasperated by lockdowns in Chinese factories as the virus went wild, backing up the world, stranding cargo ships off California ports unable to offload, creating shortages in 2020 and 2021, most especially of vital computer chips.
The LPGA has announced this week they are cancelling a tournament in China because of Covid for a fourth year in a row so the waters are not entirely calm yet.
China’s latest wave has probably peaked, public health modeling suggests, but China’s continuing policy of holding back data means no one really knows.
What everyone fears is the emergence of another variant from China. The Delta variant came from India and showed up in U.S. cities in the summer of 2021, and Omicron came from South Africa in November of ‘21. The sucker keeps mutating. The current Kracken variant of the Omicron family is capable of evading even the fifth Covid vaccine’s protections, and three years into this we didn’t expect to still be treading water behind the 8 ball. Newly emerging Orthus C.H. 1.1. is taking shape in Cincinnati in the U.S. is troubling, and being watched closely by the CDC as a newly emerging variant coming out of the Omicron lineage, a possibly susceptible to the offered by the bivalent #5 shot, that couldn't stand up to Kracken. So far CH.1.1 comprises 2% of the cases in the U.S., The world’s supply chain leaders think they have it figured out, and all indications are they have. China’s economy is expanding for the first time in four months, fueling optimism. The risk of putting all eggs in one basket is axiomatic, the vulnerability of too much reliance on China to keep trade in motion prompting supply chain expansion in India, Vietnam, Thailand, Malaysia and Bangladesh.
We think we’ve got this thing figured out and under control, but every time we’ve done that in the past three years we get blindsided. On a completely different note, it was January of 1985 when Michael Jackson and Lionel Ritchie wrote “We Are the World.” That song was about famine but it’s a reminder of how interdependent the globe’s participants are in each other’s long term well-being, and the global supply chain is at the center of that.
photo: Getty Images