The Good and the Bad of Omicron on Shipping and other Sectors due Quarantine Requirements

Not that any virus is a good thing, but there are some good and bad features of Omicron that make it something to watch, but perhaps not something that forces us into long-term changes in strategy or planning.

The ports of New York / New Jersey are giving us an interesting perspective on the risks of Omicron, and the upside. Two of the busiest ports in the country managed to weather last year’s maritime backlog nightmare that hit many other ports. The West Coast saw a hundred ships or more anchored for weeks before it was able to start getting freight processed. But fortunately for the northeast, the ports in and around New York managed to get through the period without too much delay. But that is changing.

Omicron is spreading so fast and people with vaccines are coming down with it – even if they aren’t sick. But the quarantine orders pull them out of operations for at least 5 days (under new CDC guidelines), and that’s creating a problem. A backlog of ships is starting to back up off the coast of New York. Part of this is due to a strong inbound wave of freight headed to the country, but it is primarily the result of absenteeism at the hands of Omicron. Just like we see across the health care and airline sector (only because they are most publicized), shortages of workers are starting to create a material impact on throughput.

The bad news is that Omicron is now taking a toll on businesses and causing disruptions. And the ability to predict when, where, and how deeply Omicron will strike an area is very difficult. That’s the downside.

The upside is that these disruptions seem to be short-lived. We could be seeing a peak in the United States this week or next, and this could be one of the final stages that help lead the country into more of a herd immunity situation. But for now, if you are running a supply chain, this is just one more disruption that you will need to work your way through. –