SUPPLY CHAIN ISSUES: Misaligned, and unlikely to be fixed before Christmas

ELIZABETHTOWN — The supply chain disruption hitting companies around the world is causing retailers to sharply reduce store sales and the deep discounts that have become commonplace as we enter the holiday shopping season and edge closer to Black Friday.

Supply-chain experts are encouraging customers to get their holiday shopping done early this year to purchase in-demand items and avoid the peak seasonal Christmas crowd. The logistics nightmare threatens a plethora of other Christmas and Thanksgiving-related goods, from holiday turkeys to artificial Christmas trees, according to news accounts.

And that’s just one sweep of the business sector being impacted by supply chain issues.

Reduced inventory is discouraging stores from offering their typical holiday sales. Though the holiday shopping season traditionally heralds an abundance of discounts, sales may be few and far between this year as the supply chain crisis contributes to emptying store shelves.

Traffic jams at ports and severe labor shortages in the transportation industry are preventing retailers from getting products in time. The ports are backlogged with tons and tons of containers waiting to be shipped, experts say.

As a result, retailers often have fewer products in their inventories and face delays in products that should have arrived in time for the holidays. That is giving stores less incentive to offer deep discounts on items.

Lisa Anderson, the president of the LMA Consulting Group out of southern California, said the nation has not experienced anything close to this since the Great Depression. Robinson is an expert on anything related to supply chain disruptions and any manufacturing distribution logistics.

“It’s never happened before,” she said. “We have nothing to go on. People who are adapting and thinking ahead are going to go on.”

The supply chain got out of alignment, Anderson reasoned. “So, it’s misaligned. And that stems from the pandemic. … In essence, everything is in the wrong place. When we need a container, it’s in the wrong location. When we need a truck, it’s in a wrong location. So the supply chain got out of alignment with the pandemic. That’s one thing that’s caused it.”

The other thing that has created the disruptions, she said, was the freeze in Texas that caused further demand because, for example, people had to replace frozen pipes. Those needs created further demand for some product lines while also creating further disruptions. The ripple effect? The supply chain got further out of alignment, and some plants shut down along with the discontinuation of shipments from those distribution areas.

“There was a series of problems that got the supply chain further and further out of alignment,” Anderson said. “Now the biggest thing — the labor shortage is vast. Every single manufacturing plant has a problem with having enough people to produce the products they have to produce in order to meet their customer needs. There’s a significant truck driver shortage, moving products from manufacturers to consumers or from the ports to warehouses. For long-haul truck drivers — for every nine openings, there is only one qualified applicant. There’s also a shortage of people in warehousing. Even if you can get a truck there, getting someone to offload it can be another story. Basically, our warehouses are full.”

She likewise cited an equipment shortage, such as that needed to offload a container, and the cost of expensive transportation trucks themselves.

As for what industries have been affected the most during the supply chain disrutions, Anderson cited food and bakery shortages, computer chip shortages, hospitality services, commercial aerospace, and health-care products. Pharmaceutical and biotech needs are really in strong demand, she added, along with any building and construction supplies.

“Because demand is up across the board, and everyone is having labor shortages,” she said, “it’s affecting every industry that I work with right now. And even in the industries you don’t think are affected, like, have some sort of raw material or labor shortage. So, basically, every industry I can think of has issues …”

Tiffany Wright, spokeswoman for AAA – The Auto Club Group in the Carolinas, said in a news release, “Supply chain concerns that stem from the pandemic could be an issue as to why crude oil prices have elevated. But we’re still hopeful that there may be some relief on the horizon since OPEC might ramp up production increases a little faster than previously agreed.”

With the rollout and availability of coronavirus vaccines, the global economy is slowly starting to emerge from the pandemic. The rapid spread of the virus in 2020 prompted shutdowns of industries around the world. But COVID-19 has left one destructive economic issue in its wake — disruption to global supply chains.

While most people chose to or were made to hunker in lockdown, the result was less consumer demand and reduced industrial activity.

As lockdowns have lifted, demand has rumbled to a rocket pace.

Currently, supply chains disrupted during the global health crisis are still facing huge challenges. Some are struggling to bounce back to some level of normalcy.

“It started during the pandemic. It just carried on over,” said Mark Gillespie, who manages the Elizabethtown ABC package store. “There was so much demand for alcohol during the pandemic because everybody was drinking.”

“Everybody’s having supply issues,” he said. “If you go in a Walmart or go in any grocery store, you’ll see shelves that’s got holes. Empty spaces. Same thing we got here. They just can’t get the product.”

Gillespie cited several factors that have led to some alcoholic beverage shortages in his store.

“Our end is just the truck not being able to get to the warehouse in Raleigh,” he said. “A glass shortage to put alcohol in is what we’re being told. And a little bit of it is the new system we’ve got, but they’re working the kinks out of it. They’ve got a new ordering system that’s taking a little time that needs to be right. So we’ve got several factors there that’s dealing with it.”

He noted, “Our folks have been getting better over the last couple of months. For a while there, you’d order several hundred cases and you get cut 2(00) or 300 cases sometimes, just according to when you ordered. “

It’s not just one product. It varies. Some of the higher-end cognacs are hard to get right now, according to Gillespie. Some bourbons have been hard to acquire for restocking the shelves.

“It’s not just one particular brand; it could be one particular distillery,” he said. “Certain brands are just fine, but there are several different brands you have a hard time getting it. You order it, and it’s not there. It’s gone before it gets there.”

Though he’s still not getting everything he orders, he said, “You’re getting more than you were.”

Anthony Ameri, a manager at the Walmart in Elizabethtown, said the store has not experienced as many problems as some of the chain’s larger box stores. The Elizabethtown Walmart is one of the smallest in the vast retail chain.

That said, Ameri pointed out that there were ongoing supply issues with the availability of Halloween products and other seasonal merchandise. “But as far as our grocery — our in-stock is pretty well,” Ameri said. “I will say the toys — there’s not as many toys.”

While paper products, disinfectants and hand sanitizer are no longer scarce, he said, the face masks and gloves placed on the shelf to sell to customers have become difficult to obtain.

“We’re still having that now,” he said.

Don Beyer, the 65-year-old owner of the Bladen Hardware Company in Elizabethtown, said he often receives only about a third of a shipment he has ordered. Sometimes when he orders 300 items, he may get in 200 of them.

He has struggled to carry enough PVC, paint and electrical building copper wire, which has gone up about triple in price.

He regularly stocks ammo for weapons, but shortages have created a dilemma for him, too. He doesn’t even look at the catalogs anymore. “They don’t have anything in stock,” he said. “They call and say we’ve got two or three of these. We’ve got five of these if you want them.

“A roll of wire we bought about six months ago,” Beyer said, “we normally sell it for $65. And we’re charging about $150 for it now. It’s ridiculous. There’s nothing I can do. No matter where they go, it’s the same thing. Some of them don’t even got it. They don’t got the wire.”

He said he never before has experienced this sort of thing when it comes to ordering for his hardware store. The business has been open since 1990.

“It’s way out of whack,” Beyer said.

Anderson, the supply chain expert, said the lack of a labor force, the lack of equipment and the ongoing misalignments in the supply chain will definitely have an impact on retailers over the holiday shopping season.

“For sure, it’s going to affect retailers because we still have a bunch of containers at the ports, and they’re not able to offload them fast en0ugh,” she said. “And there are not people to offload them, not enough hours in the day to offload them. There aren’t truck drivers to drive them. You have to go to a warehouse to offload them. Then go to the stores. There are a lot of steps to that supply chain and lots of people involved in that supply chain. They’re going to do the best they can, but they’re going to have shortages, for sure.”