Supply Chain Issues, How Long Can They Last?

  • Supply chain issues are now bringing new focus to trucking, ports, and retail.
  • Worker shortages are affecting more than restaurants and front of house operations.
  • Are customers or retailers putting more pressure on supply chains?
Supply Chain Issues, How Long Can this Last? Private-sector problems have turned into worldwide headlines as bottlenecks continue to build up with overseas manufacturers, American ports, and retail stores. Pent up consumer demand related to the pandemic and government stimulus checks are taking its toll on outdated systems, regulatory issues, and labor shortages. Officials from both parties have been outspoken on what they believe needs to happen for turning this around, including focusing on:
  • Trucking
  • Ports
  • Retail
We look at the current supply chain issues much like a boa constrictor that has just eaten a large dinner, this was going to inevitably happen coming out of the pandemic and now it will take time to process this before we reset back to normal. A recent study found here, done by First Insight, Inc[1] and the Baker Retailing Center at The Wharton School of the University of Pennsylvania surveyed 51 retail senior-level business executives and  found that more than 97% of them believe supply chain issues will continue to impact the retail sector through 2022. The question then becomes, which of the many pain points in today’s supply chain issues will be the first to get resolved. Trucker Shortages In California, home of the Port of Los Angeles and Port of Long Beach, the head of a major trucking association pleaded with officials to declare a state of emergency. According to the American Trucking Association, we as a country are lacking 80,000 truck drivers and no where is that being felt more than Southern California. The biggest concern is that the holiday season is right around the corner and consumer spending will not be slowing down, only to intensify further bottlenecks. A large part of the trucking community has been outspoken in opposing the vaccination mandate, stating their independent working conditions pose little risk to others. Port Disruptions As the world’s number one consumer, the United States imports more than $2 trillion a year in goods. In an effort to play catch-up, President Biden is pushing for 24/7 operations to begin working through the record long backup. There are reportedly more than 100 vessels waiting off the California coast outside of Los Angeles and Long Beach ports to dock and unload. To put that number into perspective, 17 vessels had been the previous record number of ships waiting to dock before the pandemic according to head of the Marine Exchange, Kip Louttit. Retail Consumers are being told that if they have any holiday shopping plans, they should have been working on those for some time now. Deloitte believes holiday sales will increase seven to nine percent from 2020. Retailers trying to keep up with these demands are now overordering and putting in orders that are far ahead of what their normal schedule looks like. Retail giants like Amazon and Walmart are able to flex their muscles in times like these while small businesses continue to lose out and watch their market share shrink smaller and smaller. Clothing giant American Eagle has purchased two third-party logistics companies this year as they look to control their own supply chain to the extent it is possible. For small businesses it will become more and more difficult to keep up with giant retailers, competing on prices, shipping, and turnaround times. Big businesses are taking matters into their own hands be gaining control of manufacturing, shipping and retail ensuring they can control their own destiny. For now, there is no clear path to getting more truckers on the road, but it is a matter of time before transportation solutions come around and begin to alleviate port disruptions up and down the coasts. [1] https://www.firstinsight.com/press-releases/retailers-expect-holiday-shopping-shortages-higher-prices  
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