Pearl River     A change in the configuration of the supply chain means different things to different countries.  The pandemic lessons and its shortages are often touted as potentially bringing manufacturing and production closer to markets rather than depending as heavily on China and other southeast Asian countries.  Domestic production and Mexico could benefit, if that’s the case.

Big box retailers have also been whipsawed according to business reports.  Walmart, Target, Gap and other big names reacted to the supply chain disruption by ordering early and often to have goods that they believed people wanted in time for school openings, Black Friday, and Christmas.  The press of inflation and a tightening economy means that they are not even taking delivery on some of their purchases, but offloading them to discounters even before they hit their own warehouses, much less stores.  Target has advised investors that is going to take a loss of billions on such aggressive ordering.

I would bet that Amazon is also feeling the pain and might be caught a bit over the line after having had such an explosive pandemic, when people went with e-commerce, unable to visit physical locations.  Their expansion was huge.  Their employment soared to 1.6 million workers.  They now are facing over capacity.  The opening of a new warehouse in Slidell, Louisiana, across Lake Ponchartrain from New Orleans that was scheduled for 2022, has now been postponed to maybe some undefined time in 2023.  According to the Economist, sales still grew in the USA by 8%, but shrank globally by 6%.

In Europe recently, I listened to an interesting economic development debate about the pros and cons of opening a new Amazon facility in Germany near the Netherlands border, where both sides of the boundary are desperate for new jobs in a post-coal, post-industrial business environment.  Amazon’s treatment of workers is an issue worldwide and especially pronounced in Germany where there have been eight straight years of strikes for their failure to abide by sectoral agreements.  On the other hand, jobs are jobs is the argument, and Amazon jobs are definitely better than fast food and hospitality when you open the pay envelope.  Unions in Germany tamp down the demand for such warehouse jobs citing Amazon’s claims to be moving more and more to an automated workforce, but some unions in Netherlands privately believe that will take much longer than the company claims and might not be as cost-saving as predicted.

All of that assumes that Amazon remains the powerhouse that it has been in recent years, but late-stage capitalism offers no guarantees to any of us, and that might include big winners today that could be losers tomorrow.  Watching the world’s richest, Elon Musk, eat his tweets largely in my view because his Tesla stock has diminished in value and no longer enabling spur of the moment purchases like Twitter.  Even Amazon’s Jeff Bezos has a problem getting his new yacht out to sea given the Rotterdam council’s opposition.  The old saying that “hubris comes before the fall” may be as true for high flying companies as it is for their billionaire founders and promoters.