If you are just now hearing of supply chain bottlenecks then perhaps you were on a longer flight to outer space than the one that Jeff Bezos provided to Star Trek actor William Shatner.
With the upcoming winter holidays, gift givers are being advised to order, and shop, early so as not to disappoint their recipients; but, while Christmas and Hanukkah are fast approaching, the culprit is not Scrooge, but the closures of factories abroad, especially those in Asia, and Europe, all due to the Covid pandemic that forced them.
While John and Jane Q. Public often identifies Chinese imports with the local dollar store, the reality is far more complex with everything from computer chips to sneakers being imported from destinations as far flung as Bombay to Hong Kong.
Another unknown is that many well known products are either partially or completely made of foreign parts, or designed here, and made in those distant locales.
Adding to the mix is that during the mandated lockdowns, and store closures, many Americans turned on their laptops, smartphones, and desktops to order a myriad of things from breadmakers to home improvement items, and all manner of gizmos and gadgets, with the firm expectation that they would be delivered within two days.
What that increased demand did was to create pressure to deliver, and the resulting bottleneck has created a myriad or problems, many that seem insurmountable, and have created shortages key areas, new cars especially, since they contain those microchips that tell us not only how to get to our destinations, but also to avoid hitting our children’s tricycles inconveniently parked behind our minivans.
Getting goods from point to point has been complicated by the lack of truckers, especially long haulers to get the goods from the port, or warehouse, to our homes. This dearth of truckers has been keenly felt by our British cousins whose trucks have almost ground to a halt.
Labor, therefore, is vital to push ahead, but many experienced workers have retired, or feel the desire to do less punishing hours, and workloads; now almost doubled in some key areas.
There are now 4.3 million less workers than there were in February of 2020; and, the workforce shrank in September from 63.3 to 61.6. Luring them back is part and parcel of any increase in working hours, say many economists.
Transportation problems here have grown so bad that according to The New York TImes, “Home Depot, Costco, and Walmart have taken to chartering their own ships to move products across the Pacific Ocean.”
While that might seem to be good enough, waiting times at ports can exceed 10 days,, in some cases, to have enough workers to move the goods. And, this has extended to the same patterns of delays and closures, across the US, in warehouses, and railroad yards.
The twinned problems for consumers are not merely shortages of goods, but higher prices threatening to drain those Covid inspired cash reserves, and last week, “Consumer prices rose 0.4 percent in September and 5.4 percent in the 12 months leading into it,” reported The Hill, citing figures from the Labor Department.
Riding on the heels of the increase was the effect on tightly budgeted household incomes in key areas, such as food, energy and housing costs. That lump of coal for naughty children’s Christmas stockings, might be needed to heat the humble hearth.
While President Biden “met with leaders from corporations, labor unions and trade associations,” on Wednesday, according to The Hill, and announced 24 hour operations for FedEx, UPS and Walmart, seven days a week, including the Port of Los Angeles, the factor of time will be the primary factor of change.
Joe Brusuelas, chief economist at the audit and tax firm, RSM, said in his interview, “At this point there’s not much that the federal government can do to what can accurately be described as a behavioral shock.”
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