Skip to Content

The great logistics crunch

October 1, 2021 Article 1 min read
Authors:
Lou Longo

The recent logistics crisis has laid bare the need for companies to take a more strategic approach to foreign supply chains. In CFO, Lou Longo discusses how CFOs can reduce current risks and fortify against future shocks.

Business professionals holding a meeting in a conference room.Over the past 30 years, the winning formula for U.S. manufacturing firms has been simple: outsource as much production as possible to low-cost centers in Asia and ship the goods across the Pacific.

That model had a good run, but the unprecedented supply chain disruption affecting every corner of the economy is a glaring sign that manufacturers’ luck has finally run out.

A surge in shipping costs is hammering middle-market firms. It’s showing little sign of abating amid rebounding U.S. consumer demand and persistent supply disruptions abroad. It costs around $20,000 to send a 40-foot container from China to the United States, up around 500% from a year ago. Dozens of ships have to anchor for days or even weeks off of key U.S. ports like Long Beach that cannot cope with the swell in import demand.

Related Thinking

Delivery worker riding a bike while wearing a protective facemask.
December 9, 2020

E-commerce and supply chain logistics: Trends to watch

Article 4 min read
Business professional in manufacturing facility.
October 12, 2022

China tax policies update 2022 Q4

Article 2 min read
Business professional walking through an airport.
October 6, 2022

International tax news and other global updates for Q3 2022

Article 15 min read