4 Reasons Americans Are Still Seeing Empty Shelves and Long Waits – With No End in Sight

Consumers still find bare store shelves.

Walk into any US store these days and you will likely see empty shelves.

Shortages of virtually every type of product are popping up across the country — from toilet paper and sneakers to pickups and chicken. Looking for a book, bicycle, baby cot or boat? You may have to wait weeks or months longer than usual to get your hands on it.

I recently visited my local ski shop and they barely had a boot, ski, goggles or pole to talk about – two full months before the ski season starts. The owner said it is normally almost full at this time of year.

This may seem a little strange to some Americans, as the US has been living with the COVID-19 pandemic for over 19 months. Shouldn’t the supply chains under pressure from the outbreak of the pandemic have solved their kinks by now?

As someone who researches and teaches global supply chain management, I believe there are four primary – and interrelated – reasons for the ongoing crisis. And unfortunately for many, they won’t be resolved before the holidays.

1. Consumer demand is rising

When the pandemic first hit U.S. shores in March 2020, companies were already preparing for a prolonged recession — and the typical slump in consumer demand.

Retailers and automakers, many of which had to close due to lockdowns, canceled orders from suppliers.

It made sense. In April, the unemployment rate reached 14.8%, the highest level since the Department of Labor began collecting this data in 1948. And consumer spending plummeted.

But towards the end of the summer of 2020, something strange happened. After the initial shock, consumer spending began to recover, reaching pre-pandemic levels in September, thanks in no small part to the trillions of dollars in aid Congress gave to the economy and people.

By March 2021, consumers were again spending record amounts on everything from new computers and chairs for home offices to bicycles and sports equipment, as people sought safer ways to get around and entertain themselves. The demand for consumer goods has only increased since then.

While that’s generally good for businesses and the U.S. economy, for most products the supply chain hasn’t been able to keep up — or even catch up.

2. Missing Employees

Even as consumer demand in the US and elsewhere rises, low vaccination rates at key points in the global supply chain are causing significant production delays.

Less than a third of the world’s population is fully vaccinated against COVID-19 — and nearly 98% of those people live in wealthier countries.

Low levels of vaccinated workers in key manufacturing centers such as Vietnam, Malaysia, India and Mexico have resulted in production delays or reduced capacity.

For example, Vietnam plays a key role in the apparel and footwear industry as the second largest supplier of footwear and apparel to the US after China. Less than 12% of the population is fully vaccinated and many factories are closed for long periods due to outbreaks and government-imposed lockdowns.

If more people in developing countries don’t get vaccinated faster, it will likely mean that labor shortages will continue to plague supply chains for many months to come.

3. Ship container shortage

Americans’ insatiable demand for more stuff has another consequence: Empty containers are piling up in all the wrong places.

Large steel shipping containers are critical to global supply chains. In 2020, the US imported more than $1 trillion worth of goods from Asian countries. And most of those consumer goods make their way to the US on container ships.

To get an idea of ​​the scale, a single container can hold 400 flat screen TVs or 2,400 boxes of sneakers.

But many of those containers that make their way to the US cannot return to Asia. The reasons are a lack of employees, complicated customs procedures and many other problems.

Due to the scarcity, container prices have quadrupled in the past year, which in turn contributes to higher consumer prices.

On October 10, 2021, NASA’s Advanced Spaceborne Thermal Emission and Reflection Radiometer (ASTER) instrument captured an image of more than 70 ships waiting to dock and unload in the ports of Los Angeles and Long Beach, due to a crisis in the ocean. supply chain. The image covers an area of ​​14 by 16 miles (23 by 25 kilometers). Credit: NASA/JPL-Caltech

4. Clogged Ports

All of these problems add to another challenge: U.S. ports have had a massive backup of ships waiting to unload their cargo.

A large ship can hold 14,000 to 24,000 containers. That means a ship waiting to make port could hold as many as 5.5 million televisions or 33.6 million sneakers.

Currently, more than 60 container ships are anchored in the ocean off the ports of Los Angeles and Long Beach, unable to unload their belongings. Ports are also hidden in New York, New Jersey and other locations worldwide.

Normally, these ships do not have to wait to dock and unload their cargo. But record import demand and shortages of truck drivers, containers and other equipment have caused significant delays.

No end in sight

Before COVID-19, global supply chains worked quite efficiently to move products around the world. Companies used a just-in-time philosophy that minimized waste, inventories and costs.

The price, of course, is that even minor problems like a hurricane or a factory fire can cause disruption. And the pandemic has caused a meltdown.

While I don’t expect a resolution to most of these issues until the pandemic is over, a few things can ease the pressure somewhat, such as a shift from consumer spending on goods to services and increased global vaccination rates.

But the difficult reality is that American consumers should expect bare shelves, delays and other problems well into 2022.

Written by Kevin Ketels, Lecturer, Global Supply Chain Management, Wayne State University.

This article was first published in The Conversation.