UAB professor and supply chain expert explains how COVID-19 has disrupted the economy’s supply chain and what it means for Christmas shopping.
During the ongoing global pandemic, there were disruptions in supply chain management due to the lack of people, resources and supplies to manufacture and deliver products.
“Many items are taking longer than expected to ship and several food and beverage products are experiencing bottlenecks,” said Thomas DeCarlo, Ph.D., Ben S. Well Endowed Chair of Industrial Distribution, supply chain expert at the University of Alabama in Birmingham at the Collat School of Business. “This year, the supply chain will have a major impact on the upcoming Christmas shopping frenzy.”
A vicious circle of need
“Basically, COVID issues are the main cause of staff shortages and supply chain disruptions,” DeCarlo said. “The supply chain problems start at the California docks, which make up 40 percent of all US imports, and then spread to problems in storage and transportation. It is a doom-loop.”
DeCarlo explains that COVID-related issues due to the lack of dock and warehouse workers and truck drivers are contributing to the backlog in unloading products from ships. In addition, cargo containers are held up by ships due to a lack of truck chassis to pick up the container and move the container to a warehouse.
The warehouses are full due to labor shortages and the lack of truck chassis to move the products out of the warehouses. Thus, the full containers are kept on the chassis for storage, which leads to the lack of chassis for unloading the ships.
Several factors affect some products differently than others. For example, there has been a shortage of computer chips from China for various reasons, such as COVID limiting the number of workers and a lack of electricity to power the factories, both of which have contributed to lower productivity and performance. The shortage of computer chips has slowed automobile production in the United States and is expected to reduce the availability of electronic devices. Other products from China, such as patio furniture, are also struggling with the same problems and reduced production.
Deliveries to suppliers
DeCarlo says we are facing a production slowdown in the United States due to a lack of product availability from suppliers to manufacturers as well as a shortage of truck drivers, both of which have contributed to empty shelves.
As an example, DeCarlo highlights the supply chain problems we have in U.S. bourbon distilleries struggling to get enough glass bottles to fill and sell their products.
“The shortage of supplies and resources will likely soon change the brands available in stores,” DeCarlo said. “Distillers have to make strategic decisions about what type of bourbon to bottle, which is likely to raise prices.”
When to buy
According to DeCarlo, the best time to go Christmas shopping most likely depends on the types of products consumers are looking to buy.
Consider buying technology-related products – laptops, iPhones, etc. – ASAP.
“Recently there was a shutdown of iPhone suppliers from Chinese manufacturers, which is likely to affect product availability in the near future,” said DeCarlo.
DeCarlo recommends researching the availability and cost of each line of products that consumers are looking to purchase this Christmas.
“Check out online or brick-and-mortar stores to see what’s available and what the prices are so you won’t be surprised if the product doesn’t arrive for Christmas or if it costs an exorbitant amount of money,” said DeCarlo.