That last one is no surprise. Cycling boomed during lockdown. In Britain, America and other countries retailers have reported unprecedented demand.  

It underlines the fact that the global supply-chain crisis is misleadingly named. The problem is much more about too much demand than not enough supply. 

A report for Bloomberg — headlined “supply squeeze” — focuses on the problems at ports around the world. This includes US ports which “have some of the highest congestion rates in the world.” 

One might think that the whole system is breaking down, greatly restricting the supply of imported goods. But that’s not the case. In fact, goods are flooding into America — as the following chart shows: 

Imports aren’t just high compared to deep lockdown last year, but also compared to the years immediately preceding the pandemic. 

Of course, the pandemic has had some direct impact on supply. Covid outbreaks have disrupted factories and ports; key workers have been displaced. However this was also the case in 2020 and the first half of 2021. What’s different now is that demand has rebounded — in fact, it’s overshot the levels that have been expected and planned for. 

Excess demand does what it says on the tin — it exceeds supply. But, in addition, the knock-on effects can actively disrupt supply thus making the problem worse. For instance, while demand for shipping is up across the board, it is much higher on some routes than others — like the China-to-America route. To make as many of these highly profitable runs as possible, ships aren’t hanging around to load up with American exports, but heading back empty to Asia. As a result, the distribution of shipping containers is becoming lopsided as they pile up on the American side of the Pacific. 

In a way, this is reassuring. The system isn’t fundamentally broken, it’s just overstretched and unbalanced. The various backlogs will be cleared and other adjustments made — because that is what the global logistics industry does for a living. 

What’s more, the surge in demand is temporary — driven by stimulus spending and media scare stories. Instead of panicking about supply, it might be more useful to worry about what happens to the economy when the money runs out.