So what’s behind this global product movement meltdown?
Pandemic restrictions and related labor shortages coupled with an unprecedented spike in demand have whipped up the perfect storm in terms of supply chain issues and delayed distribution.
From manufacturing plants shutting down in the Far East due to Covid infections to lorry driver shortages in Europe to cargo ships backed up in US ports, it’s a truly international problem with no quick fix in sight.
And there’s more…China’s zero-tolerance to Covid leading to port shutdowns that impactedshipping worldwide; staffing deficits in the logistics industry; an inadequate number of shipping containers; panic buying driving artificial shortages. The list of contributing factors goes on, one impacting on the next.
The ‘lean’ principles inherent in the pre-pandemic system, from staffing levels to ware house stock to delivery capacity, were designed for stable, predictable trade conditions - a Jenga towerin peril from the lightest touch let alone the sledgehammer blow dealt by Covid-19.
There’s also been a sudden post pandemic surge in consumer spending due to renewed confidence in economic recovery. Spending in the US has seen a 6 percent year-over-year growth versus pre-Covid growth trajectory - the hike thanks mainly to higher income and younger consumers splashing out after more than a year of enforced isolation.
And now the US, UK and a growing number of other nations are reporting a new phenomenon complicating matters further: ‘The Great Resignation’. People are quitting their jobs in droves - 4million in the US in July 2021 alone - in large part resulting from a lockdown-induced reevaluation of work-life priorities.
As Jonathan Gold, vice president of supply chain policy at the National Retail Federation, toldBusinessInsider.com, "At this point, shortages are guaranteed... We've been warning consumers to manage their expectations for the holiday shopping season for months now. The fact of the matter is the supply chain is stretched to its limit from end-to-end."
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