One stuck box of fertiliser shows the global supply chain crisis
From the US to Sudan to China, container boxes have been lying at ports, railyards and in warehouses as the pandemic rages on
Somewhere in the world’s busiest port of Shanghai, a container of fertilizer sits among tens of thousands of boxes, waiting for a ride to the US It’s been on the dock for months, trapped by typhoons and Covid outbreaks that have worsened major congestion in the global supply-chain network.
While the fertilizer has been stranded there since May, the port is just one stop on the long journey from central China to the U.S. Midwest. Delays have stretched a delivery that ordinarily would take weeks to more than half a year. And that time frame will keep expanding, as the goods have barely started the roughly 15,000 kilometer (9,300 mile) trek.
This is the tale of one humble shipment and its arduous journey across the world. While some of the barriers keeping it from its final destination may be specific to this particular case, the journey is emblematic of the inertia that has gripped global trade during the pandemic.
From the US to Sudan to China, container boxes have been lying at ports, railyards and in warehouses as the pandemic rages on. In an industry with 25 million containers and some 6,000 ships hauling them, it’s easy to see disruptions as one big headache confined to the shipping world. But each container that’s delayed is economic activity that’s restrained, heaping costs one box at a time on consumers and making it more challenging to put corn on consumers’ tables or deliver presents for the holidays.
It’s also a lesson in the ripple effects across global supply chains, showing the limits of diversification as all networks are still closely connected with China. “All roads lead back to China, and that has a major effect across the entire supply chain,” said Dawn Tiura, head of Us-based Sourcing Industry Group. “Congestion at one port or factory has far-reaching implications for neighboring facilities, which trickles out
across the world.”
The factory
The journey for our particular box of sandy-looking ammonium phosphate began in February. That’s when, deep in
the agricultural heartland of the US Midwest, a supplier for farmers in Illinois placed an order for eight container boxes filled with fertilizer from factories in central China.
Before the pandemic, a batch like this would typically arrive in Chicago in April, just in time for growers to use during planting season, said Steve Kranig, director of logistics at IM-EX Global, which is in charge of coordinating transport for the fertilizer cargo.
But by May some of the fertilizer was still sitting in Chongqing, 2,400 kilometers west of Shanghai, where it was manufactured. The culprit: a shortage of empty containers for transport. The crucial return of these steel boxes from trips to the US and Europe has been delayed by everything from understaffing to a lack of trucking equipment to move goods out of ports. It took Kranig months to secure boxes and spots on several ships that would leave from Shanghai. The fertilizer was loaded into the containers, and they were driven to barge vessels on the Yangtze River.
The river
The trip down China’s busiest inland waterway took eight days. This container was lucky as it was shipped ahead of typhoon season. Others recently haven’t been so fortunate.
Traffic on the Yangtze, which saw a record 2.93 billion tons of cargo pass through in 2019, has been battered as waves of extreme weather swept across China this summer. Authorities have had to close the river during storms, creating severe backlogs at Chinese ports as ships wait days for passage to resume.
While the shipment avoided any flooding disasters, it couldn’t escape high transit costs, as freight rates have skyrocketed on international routes as well as along the Yangtze. In addition to high demand for goods as China’s economy rebounds, the scarcity of vessels is pushing prices higher. Shipping lines are pulling smaller coastal vessels away to use on long-haul routes like the lucrative Trans-pacific from China to the US
“There is already a limited amount of containers that run the Yangtze River lane, and some companies are paying top dollar to take any available containers so they don’t have to try to move their stuff to Shanghai via non-water routes,” said Kranig.