What Happens *After* All the Supply Chain Issues?

Aubrie Pagano
Alpaca VC
Published in
5 min readJan 5, 2022

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It doesn’t seem like there is an end in sight for the great supply chain disruption; what are the implications?

It’s now January 2022. We are living through what some call the great supply chain disruption. As a commerce investor, seeing the supply chain in memes, the ultimate sign of cool, is truly a Revenge of the Nerds moment. It does, though, pose questions about where this all heads.

First, though, let’s set the stage for #supplychainissues. It all started in the beginning of the pandemic. China has quarantined 50M people in Wuhan to stop the spread of the virus. It also just so happens China is the center of global manufacturing. So, in essence, the government choked off trade to stop the spread of the pandemic.

How Bad Did it Get?

NYT reporter Peter Goodman laid the situation out better than I could. To essentially paraphrase him:

As a result of quarantine, factories as well as retailers cut capacity. Shipping companies assumed there would be a shipping downturn, so they waylaid ships to side line productive capacity, “which turned out to be a tremendous mistake.”

Life didn’t stop in pandemic. We outfit homes into offices; entertained children at home for the first time; outfit basements into gyms; which produced a surge of orders for factory goods, most of which are made in China.

The issue compounded because there were not enough shipping containers in the right ports to carry these goods from Chinese industrial cities to ports in the United States. During the pandemic, Chinese shipping lines were re-routed everywhere, full of PPE to places that don’t have lots of goods to ship back (to LatAm, Africa, etc.). So shipping containers sat empty at exotic ports instead of going back to China for more re-filling. This created delays in arrivals of all sorts of goods. Not just finished goods, but also components and ingredients.

As a result, shipping prices have sky rocketed, by at least 10x. Shipping…

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Aubrie Pagano
Alpaca VC

Thinking about the future of commerce. General Partner @alpacavc, Co-founder @bowanddrape, BK based