How Supply Chain Issues Impact Everyone (1)

How Supply Chain Issues Impact Everyone

How supply chain issues impact everyone. People are asking why there are so many shortages happening while numerous fully loaded cargo ships are idling off the coast of California. There are reasons they are sitting there, and many experts are predicting that the supply chain problems the world is now experiencing may be just the tip of the iceberg. Several issues, including a lack of raw materials and labor shortages, have warned many experts that these problems will continue to worsen in the upcoming months.

Over eighteen months ago, as the COVID-19 pandemic began to spread and intensify globally, many manufacturers and distributors of raw goods were forced to shut down operations. As health and safety concerns took a front-row seat, companies were forced to lay off an overwhelming number of laborers as they tried to adapt to ever-changing government restrictions. The unforeseen problem is that the world is seeing unprecedented labor shortages in almost every industry almost two years later.

 

How Supply Chain Issues Impact Everyone

 

So why are all those cargo ships full of goods and raw materials still sitting off the coast of California?

How Supply Chain Issues Impact Everyone

The answer is simple. There are not enough personnel to unload them. Many of those laid off at the height of the pandemic has not returned to work. Even as smaller crews work around the clock to unload as many ships as possible, another problem arises in the supply chain: ground transportation. There is not enough truck drivers to move the shipments to their final destination. While railroads are trying to alleviate the problem, they do not deliver the goods to their ultimate destination, so truck drivers are still needed, yet they are in short supply.

As everyone saw with the toilet paper shortages in 2020, when supply chain problems and panic buying combine, not only do shortages occur, but prices increase drastically. The cost of a shipping container being loaded and transferred from China to the U.S. has risen from approximately $2200 pre-pandemic to over $20,000 in September 2021. And that does not include the cost of ground transportation. And just like when people start panic buying, thanks to shortages in everything from copper to wood to the materials needed to make smart chips, many corporations are also beginning to stockpile goods.

 

Logistics and transportation of Container

How Supply Chain Issues Impact Everyone?

 

All of these factors occurring right now are causing the price of everything to increase. From groceries to electronics, toys to a gallon of gas, everything you need to buy will go up in price continually. The real problem is that almost no economic expert is offering any solutions to the issues, so there is really no end in sight till at least the middle of 2022.

The impact of all these supply chains and labor issues will likely be felt the hardest during the 2021 holiday season. Christmas trees and toys for the little ones will be in short supply and therefore much more expensive than ever before. The cost of holiday travel is already skyrocketing as many who could not travel last year want to spend time with family and friends during this holiday season. With travel restrictions beginning to ease worldwide, flights are being booked at a premium, and a lack of car rental availability is driving prices sky-high.

Most retail experts advise consumers to decide what they want to purchase and buy it now before supplies are gone. With shipping times already averaging ten to twelve weeks, expect anything purchased after the first week of November to not arrive at your doorstep until after the holidays. Now is an excellent time to stock up on other essential items such as medicines, personal hygiene items, and pantry staples, as no one can predict where the next significant shortages will arise.

 

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