CUYAHOGA FALLS, Ohio—If you're in the latex industry, Tom Marsh is betting you've been asking yourself the same question since the first quarter of 2020.
"How the hell did we get here?" he said. "How did what I'm calling the ripple of news—the rumors, the concerns, the things we heard out of China in late 2019, sort of the calm before the storm if you will—how did that build and turn into this tsunami of delays and price hikes and shortages that we face daily now?"
To borrow a phrase from Ernest Hemingway: "gradually, then suddenly."
Marsh, the managing director of global latex operations at Pioneer Worldwide, spoke about the pandemic's wide-ranging effects in his presentation, "Supply Chain Disruption: Ripple … Tidal Wave … Tsunami …" during the final day of the virtual International Latex Conference, presented by Rubber & Plastics News.
Marsh has more than 40 years of experience in the rubber and latex industry, working for companies such as Abbott Laboratories, Ansell Healthcare, The Ore & Chemical Company, Centrotrade Rubber USA Inc. and Halcyon Agri/Corrie MacColl. Consequently, he's seen all sides of the industry.
Here are four takeaways from his 60-minute presentation:
1. There were pre-pandemic problems
Pandemics aren't new—Marsh pointed to the 1918 Spanish Flu, the 1957 Asian Flu, the 1968 Hong Kong Flu, SARS in 2002 and Swine Flu in 2009—and the World Health Organization warned as recently as 2018 that a critical flu pandemic would result in massive death rates and have a severe effect on the world economy.
In 2019, the Global Health Security Index assessed 195 countries and concluded, "No country is fully prepared for epidemics or pandemics, and every country has important gaps to address." One of the GHS' recommendations was to stockpile medical gloves and medical devices.
"Suffice it to say," Marsh said, "the warnings were not heeded."
As recently as 1985, the U.S. and Europe were mostly self-reliant when it came to glove production, but the mid-1990s saw a mass exodus to southeast Asia, where most gloves are now produced. The U.S. went from strategic stockpiling to a "just-in-time" mentality, even though supply chains were getting longer. Meanwhile, the number of vessels were decreasing and the vessel sizes got bigger, slowing down the loading and unloading process.
"National latex volumes, especially here in North America, declined dramatically," he said. "Natural latex prices tumbled … to 30-, 40-year lows.
"That should have been a sign that this is not sustainable."
Consequently, when COVID-19 hit, the global supply chain wasn't prepared.
"The signs were there," Marsh said. "Just like a storm rolling in, I think we all were worried about it, but we thought the government or someone had it under control."