In a stark warning reminiscent of the supply chain disruptions that plagued global commerce in 2021-2022, Northwestern University professor Ben Golub predicts potential chaos as the United States braces for its largest shipping strike in decades.

What Happened: The economist’s analysis, shared on social media platform X, highlights the fragility of modern supply networks and the far-reaching consequences of localized disruptions.

“On Tuesday, 36 US ports will be shut down by the largest shipping strike in living memory,” Golub wrote. “This could recreate the chaotic supply chain crisis of 2021-2022.”

Golub, a professor of economics and computer science, emphasizes that supply chains are far more complex than their linear name suggests. “Supply networks are complex, interconnected webs of relationships,” he explains, citing Toyota’s post-2011 earthquake discovery of 400,000 distinct items across ten supplier tiers.

The economist identifies key vulnerabilities in these networks:

1. Concentrated dependence on specific suppliers or regions
2. The “diversification mirage,” where apparent multisourcing fails to protect against upstream crises
3. The “complexity trap,” where moderate disruptions across the network can cause systemic failure

Golub argues that market forces alone are insufficient to ensure supply network stability. “Unlike road systems, global supply networks operate without oversight,” he notes, adding that research shows market equilibria are not robust enough to prevent crises.

Golub also pointed out that the semiconductor industry, heavily reliant on Taiwan Semiconductor TSM, is particularly vulnerable. Any disruption in this sector could halt entire industries, as seen during the 2021-2022 semiconductor shortages.

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Why It Matters: The looming strike is not an isolated event but part of a broader context of potential disruptions. Costco Wholesale COST has already taken proactive measures to mitigate the impact. CEO Ron Vachris detailed contingency plans, including pre-shipping holiday goods and preparing to use alternative ports.

Additionally, transatlantic container shipping volumes have surged as U.S. retailers rush to replenish inventories ahead of the potential strike. Hapag-Lloyd CEO Rolf Habben Jansen noted the temptation among customers to bring in goods early.

Lastly, China’s exports are also at risk due to the anticipated U.S. port strikes, compounded by typhoons and the upcoming Golden Week holiday, which traditionally slows logistics activities in China.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote