How Will Supply Chain Issues Affect the Holiday Season?

by Sachin

Inevitably the COVID-19 pandemic would affect supply chains, but most of us weren’t expecting it to have this many effects, particularly nearly two years out. 

We’re now seeing perhaps a culmination from a slow decline in supply chain productivity, and officials are warning it may impact the holiday season. Many shoppers in stores across the country already see bare shelves, which we’re not accustomed to. 

Some of the things happening with the supply chain are due to production issues overseas, but there are also problems at ports, particularly on the West Coast. 

The trucking industry is also plagued with problems, including shortages of workers in this demanding and often high-risk field. 

The following are some more specific things to know about the current issues and how they might affect the holidays. 

What’s the Problem?

If you’re skimming the headlines, you might realize there are issues but not understand precisely what they are. Overall, there are a lot of problems. 

Every component of transportation remains affected by the COVID-19 pandemic, primarily due to the Delta outbreak. There have been ongoing outbreaks that have led to workers missing shifts, and these outbreaks are closing port terminals. Truckers are having to stay home due to illness, and cross-border movement is slow because of restrictions. 

Employers are having a tough time filling open positions, and cargo ships are stuck at sea because there’s no one to unload them. On October 13, the Biden administration said it would start working more closely with the private sector to solve some of the bottlenecks and incentivize companies to increase trucking, dock and warehouse hours so things can move through faster. 

Analysts and supply chain experts say it’s not just a problem with the products themselves but the logistics needed to get the products into customers’ hands. 

What’s Most Affected?

Currently, things like bikes, toys, clothes and technology, and electronics are facing backorders, shortages and delays. The tech industry is particularly hard hit because of a computer chip shortage. 

Computer chips are known as semiconductors, and more products than most of us realize rely on them. Cars, washing machines, and smartphones are a few examples. The tech industry has already been dealing with a shortage of chips for more than a year, and it’s likely to continue into next year.

Sadly, you might even have to work hard to find a Christmas tree. Droughts, wildfires, and heatwaves have destroyed many tree crops. 

Price Increases

Along with product shortages, you can expect that prices are going to go up. You’re likely to see less of those impressive Black Friday deals.

Truck Driving Shortages

The shortage of truck drivers isn’t a new one, but it’s adding further challenges and complexity to already tricky supply chain issues. Along with not having enough workers to unload cargo ships at docks, there aren’t enough drivers, leading to pileups of products. 

The truck driver shortage isn’t new, but COVID directly affected the industry. First, there’s a national test the Department of Transportation requires for new drivers that have to be done by medical examiners. You also have to get a permit to get your license, and the facilities needed to fulfill those requirements were often closed because of COVID. 

The pay for truck drivers has gone up significantly as a result, and the average salary for new drivers can be around $60,000. For drivers who work for big companies, the benefits can also be impressive. 

Trucking companies are trying to get the word out that the industry is not what it used to be, and it’s also a good opportunity for younger drivers and females, who traditionally don’t get into trucking. The trucks are equipped with many safety features, and the schedules tend to be less grueling, rather than having to be on the road for two or three weeks at a time. 

Retailer Challenges

Retailers face significant headwinds not only because they can’t get what they need, but they also have a hard time finding their own employees. 

Plus, fulfillment of e-commerce orders has become increasingly more expensive and less reliable. There are bottlenecks as items are going through parcel shipping, processing and delivery. It’s taking longer to get things to customers, and it’s more challenging to estimate arrival dates. 

It’s unclear how significant the impact of these factors will be this holiday season, but it is something to be mindful of, and perhaps it should encourage you to do your shopping a little early. 

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