What a CATASTROPHIC Supply Chain Breakdown Will Look Like

August 16, 2021
Blog,

“…there were also times when they had the illusion not only of safety but of permanence.” – George Orwell.

When a society falls apart, it’s hard to know exactly how it will all fracture and break apart.  We can tell a little bit of our course by the challenges we face as a community, a nation, a world of countries.  When war is at your door, you can predict what things you won’t have: electricity, water, gas, safety, and so forth.  When a natural disaster strikes, you can also bet on the same services falling apart, and, given the length of the disaster, maybe social order too.  Some disasters have a local or regional zone and impacted radius.  Some are larger in scope and suck in other stable areas like a spiraling vortex.

How does it fall apart, though?  What can you expect from a complete supply chain failure?  How can that spiral out of control and pull you and your safe zone in like a vortex?  In this posting, I want to take you through some of the significant failures that can occur in the supply chain and how they can place pressure on and potentially cause other systems to fail.  Our world is a network of systems.  As one system fails, it can burden different systems and may cause their failure as well.  Understanding these connections, their push and pull, their cause and effect helps us understand and even predict the sequence of any disaster.  It helps us know what will play out next.  So, let’s jump in…

TINY TREMORS LEAD TO MAJOR EARTHQUAKES

When one system fails, it puts pressure on other systems.  Just as a tiny tremor and movement of the Earth along a fault line can put additional pressure further down the fault line, one small event or failure can result in more significant events and failures further along.

We have seen this in minor ways this year.  The Colonial Pipeline ransomware attack lasted just six days from May 7th to May 12th, but it impacted several other systems we relied upon and had a more lasting impact.  On May 7, 2021, Colonial Pipeline, an American oil pipeline system that originates in Houston, Texas, and carries gasoline and jet fuel mainly to the Southeastern United States, suffered a ransomware cyberattack that impacted computerized equipment managing the pipeline.  Though fuel levels at major airports were sufficient, air travel and cargo would have been halted had the attack lasted longer.  The attack led to panic buying of gas.  That and the insecurity of the future supply drove spikes in the price and shortages at the pump.  That led to even more frantic buying, but not just of gas.  People, recognizing potential other shortages that would occur if fuel stopped flowing, started to panic buy additional items.  Had the hijacked line remained shut down long enough, you would have seen large-scale panic buying of staples in the stores, depleting the inventories and with no future deliveries to replenish them.

If the hijacked line remained down, you would have also seen those shelves empty for a long, indefinite period.  No distribution or shipping company will send their trucks, trains, or planes into an area where they can’t refuel.  In fact, businesses throughout the region are forced to shut down.  There are no more deliveries from Amazon and no more East Coast offices talking to the West Coast office.  Eventually, people’s limited resources on hand are exhausted.  It’s important to note that 81% of the United States’ total energy comes from oil, coal, and natural gas.  If any of those delivery systems fail, energy production and distribution can also be impacted.  Electricity, water pumping, and even some natural gas lines would cease to deliver.  Though natural gas pumping stations often rely upon the burning of natural gas to meet their electricity generation needs, systems and safety measures along the whole line rely upon electricity not generated at the pumping station.  That could knock these systems offline as well.

So with no fuel, no food, no safe drinking water, and no electricity, the region descends into darkness.  When the desperation and hunger are met with the concealment of darkness, the looting begins.  As the police struggle to keep order, opportunistic crimes and theft beyond simply raiding grocery stores occurs.  If it continues, curfews are established.  At some point, the National Guard might roll onto the streets to keep the peace.  People make a mass exodus out of the conflicted zone during the day, impacting a much larger region than the initial disaster zone.  This puts pressure and competition for resources on other regions.  Businesses outside the initial area are overwhelmed and then overrun.

Fortunately, the pipeline was up and running before any of these atrocities manifested.  What if the very localized disaster of the shutdown were greater or compounded by a natural disaster like a hurricane also hitting the eastern seaboard?  It’s not out of the realm of possibility that one tragedy can spiral into additional disasters.  It’s not unreasonable to assume that a series of attacks and disasters could be sufficient enough to destabilize an entire state, region, or country.  An CME or solar flare isn’t out of the realm of possibility any more than a pandemic causing a lockdown.  Two years ago, you probably never thought that could happen, though this channel and others were alerting you to the possibility and threat.

THE SUPPLY CHAIN’S FRAGILITY

Most people fail to understand precisely how interconnected the supply chain is.  We have become lulled into thinking that it is a miracle of efficiency and stability when we click a few keys and receive the delivery at our doors the next day.  When you pull back the curtain and scrutinize the parts, however, you will see that the just-in-time, anticipated orders, limited manufacturing to meet projected sales models are super fragile.  When one tanker ship was stuck in the Suez canal, manufacturers worldwide had to completely stop their factories because there weren’t any free cargo containers to load up with their product.  They didn’t necessarily slow or halt production because that container ship contained their raw materials.  In some cases, nothing they needed was on any of those ships forced to set anchor.  Still, lacking any containers, they couldn’t ship their products.

It used to be that when consumers demanded a product from Beanie Babies to Avocados, orders rose, and prices increased based on demand and scarcity.  Some people may be old enough to remember Dunkin Donuts’ famous commercial where they simply slow-panned over steaming coffee and an array of donuts.  It was so popular that they needed to let their franchises know the airing schedule so they could make the donuts to meet the demand.  That’s the old supply and demand equation.  Much has happened since.

As a streamlined global distribution system sprang up, products started arriving to you from further than the manufacturing plant the next town or state over.  Your range of choices increased.  The multitude of small providers was forced out of business by the high-volume, low-cost manufacturers. Now, you just had one source for your product instead of many.  Bigger corporate pharmacies replaced your many independent pharmacies.  Massive warehouse stores replaced your many small-town hardware stores.  Your small grocer who kept local agriculture producers in business by buying their product was replaced by large chains who sourced their lower-priced produce and products from corporate farms around the world.  It may seem fine and seamless to the consumer because they get a broader array of products at a lower cost, but so much of it is single-sourced now.  Instead of multiple growers, you have just a few corporate farms.  Instead of grapes during the grape season, you get them year-round from warmer climates.  Asparagus from China or Peru.  Avocados from Mexico.  Meat raised in one country, slaughtered in another, packaged, and processed in yet another country.  It’s a very efficient system that can effectively generate vast amounts of products and profits when it works.

When meatpackers get sick and force one of the largest meatpacking plants offline, the frozen inventory is used up. Then the futures price goes up. Then the prices go up for the everyday consumer.  When the flow of raw materials is halted because of a ship stuck in a canal, the cost of everything ticks up a bit.  The coffee prices go up in Europe because Vietnamese coffee is no longer getting there.  Furniture manufacturers aren’t getting what they need, which backorders that bedroom set you were trying to purchase at your local furniture store in your hometown USA.  When Active Pharmaceutical Ingredients made in China or India don’t get to the pharmaceutical plants in other countries, inventories on hand can be depleted, and shortages can occur.  The list goes on and on, and with each shortage or threat of dwindling inventories and scarcity, the instances of panic buying and hoarding activities increases.  This causes both price increases in similar products and a scarcity of products that were well-stocked before.

In reality, the just-in-time manufacturing, distribution, and delivery system are deceptively more interlaced and fragile than we see when we click a mouse and receive an order the next day.  It’s a house of cards that is standing against a growing breeze.  When one part of it breaks or malfunctions, it can grind the cogs of the whole system to a shuddering halt.  It can result in significant economic instability, and economies can come crashing down.  That ripples out across the entire infrastructure system, and shortages and outages can become the norm.

ADDING PEOPLE TO THE EQUATION

When we factor in the manufacturing slowdown because of the pandemic raging in India or China or the flow of immigrants to chicken processing plants or fields in the United States to work jobs, most Americans won’t. We see more wrenches being thrown into this fragile system.  When we undergo significant political strife and cannot resolve conflicts and find a compromise, we only manage to prolong and amplify the impact of small supply chain failures.  Inflation drives further price increases and fuels more panic buying and more discontent.

Most people can’t simply turn their back on it all and become instantly self-sufficient and self-sustaining.  They are tied to where the work is, so they can’t just walk off into the wilderness and start an off-grid homestead.  However, they can begin to prep in small ways and lessen their dependence on a system subject to repeated and large-scale failure.  Out of 100 people living in the same area, however, you may be the only one choosing to prep.  When one of these failures or disasters is significant enough in magnitude to lead to other failures for an extended period, those other 99 people will become increasingly more desperate.

When you add people to the equation, a supply chain failure can swiftly amplify itself into chaos.  A prolonged outage, as I said, could lead to looting.  Looting can lead to other crimes, curfews, or even martial law.  Many laws are being written in many states that allow the government to come in and seize your preps in the event of an emergency under the guise of serving the greater good.  This could manifest slowly at first, with forces coming to your door requesting or demanding at least one contributed item.  If the disaster doesn’t look to be one that will pass and is large enough in scope, it could quickly become a total seizure of all your canned goods and dry goods.  They aren’t likely to take your homemade canned or pickled purslane or green beans or forage in your yard, but your store-bought labeled food is for sure subject to confiscation.

People add an X factor and unpredictability to how large-scale disasters will play out.  A panicked person with short-term vision who never took the time to prepare and didn’t see the disaster they are embroiled in ever coming to an end will be entirely driven by their survival instincts.  Laws, order, and morals don’t exist in a mob.  If the police or government ever lose control of an area and armed citizens or militias take up their own defenses, you’re no longer subject to the laws and rules of the land. You are subject to whatever leader is in charge of the local forces.

WHAT CAN YOU DO?

The best thing you can do is to prep for the worst to happen.  Creating your stable supply of food and water that can sustain you for several weeks is the cornerstone of your preps.  You can’t alter the course of the supply chain.  It’s running independently of you.  However, it is so finely tuned to a stable world that when one thing goes wrong with that stable world, things could rapidly spin out of control.  We don’t live in a stable world right now.

Your goal should be to establish your place outside of being at the complete mercy of the supply chain.  If you can no longer buy meat at your grocery store, what will you pivot to for protein?  What will you turn to in your inventory?  If the power, water, and fuel stops flowing, what is your plan to survive the night, the week, or the month?  When you have a plan and set aside the resources you need, you will have successfully reduced your dependence upon a system that will continue to fail in grander and more dramatic ways.  Natural disasters will still occur.  Ransomware attacks will continue to happen.  Political and social conflict will continue to plague us all.  What you should be doing is to prep yourself to step out of it all when you must and sustain yourself until the order is reestablished and the supply chain is corrected or to survive an ongoing systemic failure.

CONCLUSION

Though we often think of the swiftness of delivery and the variety of products available to us as emblematic of a robust system, it is an illusion.  As we have witnessed just this last year, the supply chain is intricately woven throughout multiple systems and across numerous food, infrastructure, services, and products.  The failure of one part of it can ripple into seemingly unrelated areas.  The failure of multiple pieces of it can lead to an outright collapse.  We’ve been lucky that it has been contained so far, but we should view this as the crossing rails coming down on the train tracks.  The train is coming.  Those crossing rails and lights are your warning– the cracks in the system we have seen today.  You can either get off the tracks, maybe even the road, or you’re at risk of getting run over.

What do you think?  What two or more events do you think would need to occur before we saw a more significant system-wide failure?  If a cargo ship getting stuck, a pipeline getting hijacked, or a sickness slowing manufacturing can cause such dramatic and lasting effects, what do you think could be the final blow that brings the house of cards tumbling?  

As always, please stay safe out there.

5 2 votes
Article Rating
Subscribe
Notify of
guest
1 Comment
Inline Feedbacks
View all comments
WhereEaglesDare
WhereEaglesDare
1 month ago

My gut is telling me, we’re heading for some hard times. I had a military buddy tell me, if you think things are bad. Get ready, it’s the behind the scene stuff that’s even worse. Another words the things that we’re seeing is minor to the stuff we can’t see.

Related Posts

Menu
1
0
Would love your thoughts, please comment.x
()
x