Firms call supply chain crisis worse than COVID; separate survey finds only 45% feel ready for disruption

Remove 15% of the world's shipping capacity and leave the cargo where it was, and the ships still sailing carry about 18% more each: one divided by 0.85 ^[3]. The 15% is Flexport chief executive Ryan Petersen's estimate of what rerouting and conflict have taken out this year, and he said he has spent 25 years in logistics and has never seen conditions this severe ^[14]. The 2020 version looked different: container ships sat at ports for weeks and toilet paper and masks went missing from shelves ^[19]. Now shipping improves and then deteriorates again, and prices swing with it ^[20].

The Trump administration has called the war with Iran a temporary shock and says prices will settle quickly once the fighting ends ^[7]. That proposition has already been tested once. The United States and Iran signed a memorandum of understanding in June and the Strait of Hormuz briefly reopened; gasoline fell below $4 a gallon and international oil prices dropped below pre-war levels ^[9]. The trend has since reversed ^[9]. CNN reported that disruption and price pressure are unlikely to ease easily even after the war ends ^[8].

The comparison with the pandemic is self-reported, and it reaches a reader at two removes: ISM respondents to CNN, CNN to the English edition of the Seoul Economic Daily ^[3][22]. Individual accounts are more specific. Dilworth Coffee's Jeff Voita said his Raleigh distributor is dealing with unprecedented disruption as poor Brazilian harvests, tariffs, the war with Iran and abnormal weather hit at the same time ^[4]. Jack Buffington, who runs the University of Denver's supply chain program, called it a bigger problem than COVID-19 and an entirely different issue rooted in energy ^[5].

The July survey ISM ran with Amazon Business puts a number on the gap between priority and preparedness. 71% of companies call balancing cost and risk the core of procurement strategy; 45% say they are prepared for disruption, a difference of 26 points ^[2].

I would budget for diesel near double its March price through the next contract cycle ^[11]. Russian export restrictions are holding 12% of the world's seaborne diesel supply off the water ^[12], and core prices excluding energy and food rose last month at their fastest pace since April, with the increase reaching service prices, which rarely come back down once they climb ^[10]. The counter-thesis is that the 12% is a policy and policies reverse, and June showed how fast fuel can retrace when Hormuz clears. What would show the pressure is temporary is diesel drifting back toward its March level while core services decelerate at the same time. Shanghai, where successive typhoons disrupted operations for about two weeks and delays continue ^[15], is a separate queue, and an open strait leaves it standing.