Supply Chain Shipping Woes

While the stock market continues to show growth, there is clearly a major threat to economic recovery around the world…the supply chain shipping.  Have you noticed at your home or at your business?  Well apparently NPR has noticed. Last week the organization wrote a scathing newsletter, “How ‘Chaos’ In The Shipping Industry Is Choking The Economy.” That’s pretty direct and the article was eye-opening. 

Econ was not my favorite class in grad school, but I do remember that housing and auto sales are a good indicator of movement in the economy.  There have been numerous reports about chip shortages keeping automobile companies from finishing new vehicles. The price of lumber has skyrocketed and so the housing market is due to take a hit.  And you see it at retail everywhere.  Again, while there are plenty of goods, the out of stocks on certain products is still frustrating. 

So what can be done?  One company, Home Depot has actually contracted its own container ship in an attempt to avoid delays. Their delays are definitely real. Have you tried to buy an appliance lately? 

Amazon seems to be doing better than it was in the early pandemic days, but its delivery estimates are often not accurate: either too early or too late. No one will complain about goods arriving early, but late is a problem especially since more and more people are returning to the office. 

That is only part of the problem. What we can’t see, and what was highlighted in the NPR article, is that in the rush to meet pent-up demand in this country, containers are being rushed, ‘dead-headed’ back to the Far East to insure we can get more goods here for the holiday season. The problem with that is, of course, we do export items from the U.S. Our exports don’t make it onto those containers, disrupting our already tilted balance of trade even further. 

The end result of this is a disruption of our economy.  It really does no good to point fingers and blame one group or another, but the reality is Home Depot shouldn’t have to contract its own ships. New cars don’t have to sit idle at dealerships waiting for parts. The pandemic still is active in many countries, but it is waning in others. 

Technology can help mitigate some of the problems…that is, the technology is available, but manufacturers, retailers and others will have to make the investments to put it into place and help the entire consumer ecosystem become more responsive.  Will this supply chain shipping issue end soon?  Probably not, but by making more aware of the issues, hopefully we will not be impacted by this for an extended time.