Now, with the holiday shopping season fast approaching, supply chain chaos could spell even more trouble for consumers.
“Supply chain management people have always been the heroes of the holiday fulfillment periods,” industry analyst Bob Ferrari told Insider. “They’ve come through in extraordinary ways with how they’ve moved freight at the last minute, how they got materials aligned, how they’ve been able to air freight materials to where they need to be at the last minute. Now, all of those options are off the table. All of the disruptions that we have right now are going to limit the ability of supply chain management teams to deal with this.”
Given all the uncertainty, here are some of Ferrari’s tips to make your holiday shopping go as smoothly as possible this year:
Get it done before Black Friday: Start as soon as possible. “The Black Friday holiday weekend is traditionally where a lot of consumers have done the bulk of their shopping,” Ferrari said. “If an item is going to be in short supply, by the time the Black Friday holiday weekend comes along, the inventory of that particular item will probably be depleted at that point.”
Consider holiday shipping deadlines from FedEx, UPS, and USPS: “Keep in mind that there’s probably going to be a carrier suspension of movement during the holiday period, depending on what the volume situation is,” Ferrari said. “Don’t wait too long because the ability to actually get to you may be in jeopardy at that point.”
Be selective about where you shop: “At this point, everything is so constrained that it’s scale and influence that sort of win out here,” Ferrari said. For this reason, Ferrari notes that big names like Amazon and Walmart may be safer bets if you’re looking to buy from larger companies since they charter their own container ships, for example.
Buy domestic: “If a product is primarily within the United States and you are a US consumer, chances are you might be able to get your hands on that,” Ferrari said. “If the item on the other hand reflects a global-based supply chain, then you have to deal with that reality, too.” He suggests buying gifts like specialty foods or food assortment baskets, for example, since a lot of food items are often sourced domestically.
Shop local: “I would look to the local areas where people are residing,” Ferrari said.
Prepare to pay more: Ferrari cautions that the steeper discounts typical of the holidays may not arrive this year because of extra costs from combatting supply chain disruptions, product shortages, and more. “If you really want a particular item, you may need to be prepared to pay more for it,” he said.
Do your research: “You’ve got to do your homework,” Ferrari said. “You’ve got to really understand what items are probably likely to be available in terms of where are they coming from and where are they in the pipeline at this point.” He suggests looking at the manufacturer’s website for a product to see if they have information about inventory availability.
Set realistic expectations: “Depending on what you’re looking for, what you’re seeking to buy and where it’s coming from in the global supply chain, there’s got to be some realism here that, in some cases, it may not be there for the holiday,” Ferrari said. “But it will eventually be there.”
The UK economy barely grew between June and July, as rising coronavirus cases and supply-chain issues knocked the country’s coronavirus recovery into a lower gear, the Office for National Statistics said Friday.
July’s 0.1% expansion in gross domestic product was well below the 0.6% economists polled by Reuters had been expecting and the 1% expansion in June.
The all-important services sector, which makes up about 80% of the economy, registered zero growth. Large falls in output in retail and law firms offset growth in outdoor events as the economy continued to reopen.
The “measly” increase in GDP “shows that amid rising COVID-19 cases and broadening product/labor shortages, the economic recovery has stalled,” Paul Dales, chief UK economist at consultancy Capital Economics, said.
Dales said the 1.6% fall in output in the construction was “surely due to shortages” in the sector.
The pound last was up 0.22% against the dollar at $1.387, while the UK’s FTSE 100 stock index was 0.34% higher.
Hussain Mehdi, macro and investment strategist at HSBC Asset Management, also flagged coronavirus and supply-chain issues as key problems for the UK economy.
“A combination of challenges from rising covid case numbers, staff shortages and supply disruptions weighed on GDP growth in the month,” he said.
Supply chain issues are plaguing the golf industry at a time when the sport is surging in popularity.
Golf clubs – including irons, drivers, and putters – as well as items like grips are in increasingly short supply as supply chain holdups around the world continue to make it challenging to source new products, Bloomberg’s Michael Croley reports.
Custom-fit clubs are taking upwards of 12 weeks to arrive rather than 10 days. Titleist’s parent company Acushnet has warned of ongoing supply chain disruptions. And golf equipment maker Mizuno told Bloomberg it went from expecting to have a surplus of leftover inventory to “practically having no inventory at all.”
Of course, the golf world isn’t the only industry severely impacted by issues with the global supply chain, which was completely upended by the coronavirus pandemic. Between work stoppages, labor shortages, shipping backlogs, soaring demand, and catastrophic weather events, many industries have been struggling to get their hands on the products, and even the raw materials, they need to keep running.
But the golf industry is in the especially challenging position of having recently experienced an explosion in popularity.
There were 24.8 million golfers in the US in 2020, an increase of 2% from 2019, making it the biggest net increase in 17 years, Golf Digest reported earlier this year, citing data from the National Golf Foundation. NGF counted 6.2 million new players – either novices or those returning to the sport – which was a new record, according to Golf Digest.
“There hasn’t been this much optimism and new activity in the golf business since the turn of the century,” Joe Beditz, president and CEO of NGF, wrote on the organization’s blog earlier this year.
As of July 2021, combined sales of golf clubs and golf balls were up 77% from last year and 35% from 2019, NGF reported.
Ports in southeastern New England have been shut down by the US Coast Guard ahead of the pummeling winds and heavy rain that will slam the region as Tropical Storm Henri moves through on Sunday.
The ports of Narragansett Bay, Mount Hope Bay, Buzzards Bay, Cape Cod Bay, Vineyard Sound, and Nantucket Sound are currently at hurricane condition ZULU, meaning the ports are closed due to gale force winds and no ships are allowed in or out, the Coast Guard said in a statement late Saturday.
Previously, the ports were at condition YANKEE, meaning a tropical or hurricane-force storm is predicted to make landfall at the port within 24 hours.
Henri, and its subsequent port closures, come at a time where a recent surge in shipping costs is slowing down the global supply chain and causing mass shortages of goods.
One major shipping alliance made cutbacks of up to 22% on trips between Asia and Europe during the spring of 2020, Insider reported. Between Asia and North America, carriers slashed some 20% of capacity.
In 2012, after hurricane Sandy hit the east coast, the US Coastguard reported $70 billion in damages to over 180 ports in the region. It months to recover from.
The price of crude oil fell as much as 4% on Monday after pessimistic industrial and retail data out of China signaled an economic growth slowdown.
Chinese retail sales, industrial production, fixed-asset investment, and unemployment all came in below expectations, according to official data released Monday.
Last week, the International Energy Agency said that the resurgent Delta variant posed a significant risk to rising oil demand, especially in Asia, and slashed projections for the second half of the year.
The price of crude oil fell as much as 4% on Monday after pessimistic industrial and retail data out of China highlighted signaled a Delta variant-driven slowdown in economic activity.
July economic data released by China’s statistics bureau on Monday revealed misses across the board. Retail sales, industrial production, fixed-asset investment, and unemployment all came in below expectations, underscoring the costs of China’s tough “zero COVID” approach to new waves of infection.
“July’s data suggest the economy is losing steam very fast,” Raymond Yeung, chief China economist at ANZ, told Bloomberg. “The resurgence of Delta also adds extra risk to August’s activities.”
Delta has spelled complications for supply chains running through China. Last week, the country partially shut down the Ningbo-Zhoushan port in eastern Zhejiang province, one of the world’s busiest, after a few workers contracted COVID. Freight rates have surged and shipping reliability has cratered as pandemic bottlenecks throttle global commerce.
Last week, the International Energy Agency said that the resurgent Delta variant posed a significant risk to rising oil demand, especially in Asia, and slashed projections for the second half of the year. The IEA now expects 500,000 barrels per day lower production, driven by lower demand.
“We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant undermined deliveries in China, Indonesia, and other parts of Asia,” the agency said.
An ongoing computer-chip shortage has affected cars, iPads, and dog-washing technology alike. Chipmakers like Intel had already seen production issues pre-pandemic, but as with many industries, COVID-19 brought a variety of new supply-chain issues. The chip shortage is a problem for consumers wanting basically anything with a computerized component, which is much of the economy. Take cars as an example.
The semiconductor shortage has hit automakers the hardest. In January, the consulting firm Alix Partners estimated the automotive industry would lose $61 billion in revenue from the shortage this year. As Insider’s Katie Canales reported, demand for chips has gone up as consumers scrambled to buy cars and other technologies that use them.
But as more cars went into production, chip competition went up. Since then, many carmakers have been forced to shut down plants and prioritize which models they produce, while car prices at dealerships have continued to go up.
Buyers are still looking for vehicles, creating a competitive used-car market. As USA Today reported, used-car prices are on the rise as the aforementioned chip shortages affect new-car production, and buyers have turned to older ones instead, while Axios reported the average price of a used car has hit $17,609.
A UBS note estimated that in April, used cars saw their largest monthly price increase in 68 years of tracking, with prices rising between 8.2% and 9.3%.
If you’re looking to rent, you might also be out of luck: Insider’s Brittany Chang reported on the “perfect storm” hitting rental cars right now, with prices surging and demand increasing. Americans are itching to go on vacation this summer, as more people are vaccinated and some restrictions loosen. That’s leading to far more demand — but rental-car companies had sold off parts of their fleets early into the pandemic, leaving fewer cars to go around.
It’s not all bad news for used-car lovers, though: As USA Today reports, the trade-in market is hot, too, meaning your old car could be worth more right now.
Gas prices have skyrocketed in recent months, jumping 22.5% in March from the previous year, according to the US Bureau of Labor Statistics’ Consumer Price Index. Much of the surge in gas prices started with the extreme Texas freeze, which halted a fifth of the country’s oil-refining capacity in its tracks for weeks at a time.
Plastics and palm oil
The devastating winter storms in Texas also left their mark on the plastics industry. As Insider’s Natasha Dailey reported, the state is a key plastics exporter — and the storms made many plants, which are difficult to reactivate, press pause.
According to the Financial Times, rising plastic prices have led to an increase in packaging costs. Citing data from Mintec, the Financial Times reported that those costs have increased by nearly 40% from the start of 2020, marking “historic highs.”
Palm oil, which is in a majority of those packaged products, also saw its prices climb, according to the Financial Times. That’s due to yet another labor shortage; the industry had already been contending with finding more sustainable production methods.
In September, Insider’s Rachel Premack reported that pay for truck drivers was on the rise, coming in at “record-smashing levels.” But the pay hike — and increased demand — comes after an exodus of drivers in 2019; Premack reported at the time on what some called a “trucking bloodbath,” as trucking companies saw profits fall, with some even going bankrupt.
Now demand is surging, according to The Journal, and if everything continues as is, that gap could deepen.
Homes and vacation houses
The US was facing a shortage of 3.8 million homes as of April, according to Freddie Mac. Home builders have been struggling to keep up with demand as remote work fuels interest in spacious housing, with house prices rising at their fastest pace in 15 years, The Wall Street Journal reported. Lumber prices are also driving the cost of new homes even higher.
Even vacation-home rentals are at an all-time high. A house in the Hamptons rented for $2 million this summer, and 85% of vacation rentals in popular destinations like Cape Cod, the Outer Banks, and the Jersey Shore are booked through August, according to the rental site VRBO.
If you’re wondering why the houses around you are getting more expensive, look to their component parts. No, seriously: Lumber prices have soared, and, as Insider’s Ayelet Sheffey and Libertina Brandt reported, builders are even increasing house prices in an attempt to offset demand.
It’s due to another pandemic disruption, as lumber mills were forced to temporarily close for safety concerns. When they reopened, they couldn’t keep up with a scorching-hot housing market, goosed by a work-from-home economy, record low mortgage rates, and the need for personal space during the pandemic.
According to an April analysis from the National Association of Home Builders, soaring lumber prices added $36,000 to the cost of a new home. Lumber prices “remain stubbornly high,” according to the report, due to mills shutting down, unexpected demand from big-box retail and DIY-ers, and tariffs imposed on Canadian lumber.
Household products like toilet paper and tampons
Many household goods including toilet paper, diapers, and tampons are also facing supply problems.
One of the biggest producers of the pulp used to create toilet paper told Bloomberg that port delays and high shipping costs are causing companies to push delivery dates back months.
The work-from-home lifestyle helped the furniture industry boom but to such an extent that customers are seeing delivery dates that are months out.
In February, La-Z-Boy executives said customers could expect delivery dates that are five to nine months out from their order dates. Other furniture companies like Kasala, a Seattle-based chain, said they don’t expect to get furniture parts until at least December.
The furniture shortage has been exacerbated by a spike in homeownership, as the number of available and unsold homes sits at record lows. In other words, a lot of new homeowners are waiting a long time for their new living-room sets.
Bacon and hot dogs will likely be in short supply this summer.
The pig shortage dates back to the onset of COVID-19 and outbreaks in at least 167 meat-processing plants forcing almost 40 plants to close as of June 2020. As vaccination rates pick up and people prepare for summer vacations and cookouts, analysts told Insider’s Natasha Dailey demand will outstrip supply.
With pork companies still struggling to overcome lower production rates in 2020, the matter only intensified when high instances of disease hit the hog population this past winter.
Some companies are already seeing the impact on their shelves. In March, Costco said its supplies of cheese, seafood, and olive oil were running low.
General Mills said it has been forced to raise prices due to the delays increased shipping costs. Coca-Cola also raised prices to combat the supply-chain crunch. Neither company specified which products would be affected.
Coffee has also been hit by delays, Bloomberg reported in March. Peet’s and JM Smucker, the brands behind Folgers and Dunkin’ coffee, have said they’re facing rising costs. Reuters reported that in February, port delays pushed coffee prices to their highest point in more than a year.
This summer pool owners will see the worst chlorine shortage in US history, according to CNBC.
Supplies of the chemical have been strained since a fire at the chlorine manufacturer BioLab in Louisiana in September. The price for chlorine used in pools has nearly doubled this past year and is expected to rise even more to meet demand this summer.
Corn is a key crop for many products, including fuel and different foods. As supply concerns loom, corn prices are popping off, according to Axios.
There’s a few reasons that demand is so high: After an outbreak of swine fever in China, pig herds were “decimated,” according to Axios, leading to huge corn demand in China. That spike in demand is coupled with corn crops in Brazil and Argentina experiencing both bad weather and pandemic-related labor shortages.
Now corn prices are on a record-setting clip, rising by 16% in April alone.
And, as Fortune reported, there could be a domestic supply issue too. Droughts and a rough winter are both concerning — and if American crops can’t fill in the gaps, prices could rise even more.
Finally, a commodity unlike all the others is in surprisingly short supply: workers.
Major labor shortages are hitting businesses across America. As Insider’s Kate Taylor reported, chains like Dunkin’ and Starbucks are struggling to find workers — leading to reduced hours and hesitance on opening indoor dining back up.
There’s a few possible reasons that unemployed workers are opting not to return, according to Insider’s Ayelet Sheffey. They include workers making more on unemployment benefits than in their prior work as well as continued concerns over COVID-19 and the need to provide childcare at home.
Factories can’t keep up with the reopening of the American economy.
Popular metrics tracking the US manufacturing industry indicated strong growth in April. The Institute for Supply Management’s purchasing managers’ index dipped 4 points to 60.7, while IHS Markit’s own gauge rose to a record high of 60.5. Readings below 50 indicate industry contraction, while those above the level signal growth.
The April reports further support the industry’s resilience throughout the pandemic, but underlying trends point to growing risks at American factories. Supply-chain disruptions and raw-material shortages plagued manufacturers throughout the month as the broader economy rebounded. New orders accelerated even further amid stronger client demand, leading backlogs to climb at their second-fastest rate since IHS Markit began collecting data.
“In 35 years of purchasing, I’ve never seen anything like these in terms of extended lead times and rising prices,” one business in the plastics and rubber sector told ISM. Another remarked that they’re “worried about getting the materials to support” such strong sales.
At the same time, gauges of manufacturing-industry employment slowed last month, leaving firms to address burgeoning order books with inadequate headcounts. The hiring woes, coupled with historic supply chain pressures, dragged IHS Markit’s measure of business confidence to a three-month low.
The labor-force shortfall mirrors dynamics seen throughout the service industry as well. Businesses from restaurants to rideshare companies have reported difficulty in hiring as the economic recovery ramps up. Payroll growth is expected to near 1 million new jobs in April, but worker shortages could curb the labor market’s rebound sooner than economists expected.
The growing backlogs and rising material costs are likely to augment the sharp rise in inflation that the Federal Reserve has been warning of for months. Officials have said that reopening and stimulus would boost price growth in the near term before this “transitory” surge fades away.
Manufacturers reported passing down higher input costs to their clients, adding to the inflationary dynamics seen elsewhere in the economy. The rate of sector-specific inflation cooled slightly from March, but still registered at its second fastest on record, according to IHS Markit.
Still, experts see most of the industry pressures easing as the economy settles into a new normal. The continued rollback of economic restrictions will help firms more effectively address issues curbing production, Oren Klachkin, lead US economist at Oxford Economics, said.
“Supply-chain stress will hinder, but not derail, manufacturing’s expansion,” he added. “Bottlenecks will gradually open up as the global economy returns to full health.”