The pandemic threw the vital but usually humdrum world of logistics into a tailspin, creating shortages of masks and vaccine vials, semiconductors, plastic polymers and bicycles. The shipping system underpinning globalization — production on one side of the planet, connected to consumers on the other — proved too rigid to absorb the rolling tremors from Covid-19, or to recover quickly from the jolts to consumer demand and the labour force. That triggered supply-chain disruptions, idled factories and unleashed inflationary forces. The chief challenge was moving freight, and it started with a sudden shortage of shipping containers. 

1. Why do containers matter so much?
There are about 25 million standardized shipping containers plying the seas on about 6,000 ships in a fragile network designed to stay in sync with port capacity, railroad lines and trucking networks. It’s a system that has lifted millions of people out of poverty and created a generation of discount-minded shoppers. In normal times, it works so well that it has led to the widespread adoption of more efficient just-in-time inventory management. However, the Covid-19 crisis led to unpredictable demand for goods and on-again-off-again lockdowns that idled port terminals. The disruption left handlers of the ubiquitous 40-foot (12.2-meter) boxes struggling to manage traffic, causing shortages of containers where and when they were needed most. By October 2021, ocean cargo rates had spiked ten-fold from a year earlier, sparking worries about the year-end holiday shopping season and disruption stretching into 2022.

2. How did the system break down?
As the world emerged from the pandemic, China recovered faster than other countries, so more containers were raced there as manufacturers tried to catch up. But when they arrived in US ports such as Los Angeles, delays related to Covid-19 clogged one of trade’s main thoroughfares, just as stores tried to meet suddenly soaring demand. Backlogs at truck yards and railroad hubs were compounded by dockworkers calling in sick and shortages of truck drivers. By early 2021, the disruptions had spread to other regions, including Europe. The crisis was worsened by the freak grounding of a giant vessel in the Suez Canal in March, blocking the route in both directions for about a week. Delays are more than just a headache for importers waiting for their goods — they sap capacity from the system, which keeps rates elevated.

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