Don’t panic: What have Covid and Brexit taught us about dealing with supply chain problems and shortages?

Richard Youle, local democracy reporter

Imagine reading a headline warning of bread shortages because of poor global harvests in a respected media outlet.

Thankfully, that situation has not arisen, but how would you react?

We’ve all had a taste of shortages since the Covid pandemic, and there is something about food, in particular, that seems to trigger deep-seated emotions and responses.

The rational answer to the fictional bread shortage might be to maintain your normal buying habits, partly to avoid what Swansea University psychology lecturer Simon Williams calls a “self-fulfilling prophecy” – in other words, people warned of a shortage stockpile and compound the problem.

The reaction to the fuel distribution bottlenecks early last autumn was a case in point. The driver shortage issue became a product problem as enough people filled their tanks to leave many petrol stations running dry. But, after a certain period, maybe people were just acting rationally?

Other shortages have pre-dated or punctuated the last two years, such as semi-conductors, dried goods – briefly – like pasta, the carbon dioxide needed in the food and drink industry, and building materials like timber.

Chris Yarsley, policy manager at trade body Logistics UK, said: “One of the biggest wins has been public recognition of what supply chains are.

“When you used to see lorries on the road you’d say, ‘Get out of my way.’ Now people genuinely understand why they are there.”

Covid spawned a series of experiments that could never be run in normal times: how to prioritise healthcare in the face of a new virus; how to keep the economy going when millions of people are unable to work; and how people react when shortages hit.

It’s not as if researchers could remove toilet rolls, rice and flour from supermarkets and observe what happened next.

Swansea University’s Dr Williams said he believed people will look beyond the toilet roll stockpiling of the early weeks of the pandemic when reflecting on Covid in the future.

“In those early months people were sharing goods or dropping stuff off on people’s doorsteps,” he said.

“I think there is a generational aspect to it. Older people who remember the Second World War or its aftermath, or previous discussions about epidemics, are given a sense of perspective.

“They think, ‘Let’s ration our goods instead of stockpiling’. I think a lot of people did that.”

He added: “I think there is a psychological fear of scarcity, even though we were never going to starve.”

An article published in the journal The Psychologist shortly after the pandemic hit argued that people generally didn’t act irrationally in crises.

It said: “While some may act selfishly, many people behave in an orderly and measured way that is structured by social norms. They help each other, wait for each other, and they don’t only help family and friends but strangers as well.”

But it added: “However, these tendencies are fragile and far from inevitable.”

Dr Williams said there was “good fortune” in being alive today in terms of the choice of products available. Maybe we all appreciate that now.

‘Cascade’

Some will argue that one aspect of the shortages since 2020 has been the role of the media.

There was criticism in some quarters, for example, of the extensive coverage of the petrol shortages, notwithstanding the fact that it was what everyone was talking about.

Asked if there was an argument for the media giving less attention to such cases, Dr Williams said: “The short answer is no. The media has a job to do.

“Maybe it’s about giving the media better information? Is this a real crisis?”

The article in The Psychologist said use of the word “panic” was harmful.

“Stories that employ the language of ‘panic’ help create the very phenomena that they are written to condemn,” it said. “They help create the selfishness and competitiveness which turns sensible preparations into dysfunctional stockpiling.”

It’s also a tough one for Governments.

“There can be a counter-productive effect in telling people to do something, or not do something,” said Dr Williams.

The UK Government seemed to loathe to say anything about the petrol problems before finally announcing that the Army would help drive the tankers.

A lack of drivers has been the main factor behind the shortages since early 2020, says Andrew Potter, professor of transport and logistics at Cardiff University, and Logistics UK’s Chris Yarsley.

“There is a single pool of drivers to draw from,” said Prof Potter. “As one industry recruits drivers from other industries, it creates a cascade effect.

“The numbers coming into the sector are starting to improve.”

He said the UK was short of thousands of lorry drivers prior to Brexit and Covid, but that this shortfall then rose to anywhere between 80,000 to 100,000.

“Now it’s back down to 60,000 to 80,000,” said Prof Potter. “It is beginning to ease. Wages have gone up.”

Another problem has been freight container shortages as the global economy woke up after a period of hibernation.

Empty containers were often in the wrong place, meaning there was less space for full ones to be unloaded at ports. Freight costs soared.

“Then you got queues of ships outside a port, or they’d go to other ports,” said Prof Potter.

‘Finite’

Logistics UK’s Chris Yarsely said the logistics sector was working with central Government to expand lorry driver testing capacity, improve roadside facilities, and develop driver apprenticeships.

“We need to change the image of the sector,” he said.

“The things being put in place to increase the number of drivers being recruited are starting to improve the situation.”

He added: “We are essentially an importing nation.”

He also said industry and the Government needed to be “nimble” in predicting future bottlenecks.

In October last year, former chief executive of Tesco, Sir David Lewis, was appointed as the UK Government’s supply chain adviser.

The short-term role involves identifying the causes of current blockages and pre-empting future ones.

Asked if shortages were part of the landscape now, Prof Potter said: “In the short term, I think they are. Over time I think we will find a balancing point.”

There is also the potential – maybe inevitability – for squeezes on the actual products we rely on, including food, in the years to come as the world’s population and its middle-class share continues to grow.

“Overall, across the world, wealth is going up but resources are finite,” said Prof Potter.

“You can get into quite a deep philosophical debate. Is it fair for us to tell middle classes in Africa that they can’t have what we’ve had?

“It is good for us to think a bit more about what we use.”