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Supply Chain Tangles and Holiday Woes

We’re finally well into the time of the year that we have all been looking forward to - Thanksgiving and Christmas.

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Amidst the medley of supply chain woes, the question arises - will the festivities be affected? Having experienced a year of recurring disruptions, are we better prepared this time around?

In general, consumer buying in the US has increased tenfold during the pandemic. Comprising mainly of imports, the Port of Los Angeles saw a 30% year-on-year increase in shipment volumes compared to last year.

Without an increase in port capacity, combined with a nationwide labor and resource shortage, the supply chain looks tangled in knots. 

 

Our most expensive Thanksgiving dinner yet?

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With more intimate gatherings and fewer people going on travels, demand for smaller birds has shot up - leaving a surplus of giant turkeys.

Coupled with labor shortages at meatpacking plants, turkey suppliers have extended the birds’ lifetimes by delaying their slaughter. In other words - this means more meals with turkey leftovers!

The classic selection of sides that we expect to see plated on the Thanksgiving table might also take a twist this year.

The array of cranberry sauce tins that used to line up shelves in the grocery store might be a rarity - all due to a tin can shortage. Ocean Spray’s CEO, Tom Hayes, shared how using different cans contributed to a shortage of cranberries in some parts of the US. 

Another staple - sweet potatoes - is also facing the effects of food inflation. The labor shortage of truck drivers means not enough people to transport the supplies to stores and ports. With upward pressure on wages, the rising costs are likely to be passed onto the consumers.

With these well-loved treats in short demand, it might be worth looking for substitutes or to start purchasing early.

 

Hope for a crisis-free new year

It would be prudent to expect that the shortage of seasonal items may last through to Christmas, so it’s worthwhile to start planning ahead. 

As illustrated above, we’re seeing a perfect storm of microeconomic demand and supply issues - rising demand for goods, shortage of labor, limited spare capacity, and changing consumer tastes and preferences. 

But not all is dark and gloomy - there are signs of recovery that could see us into the new year. 

port congestion

For one, major US retailers have attuned themselves to consumer demand signals and have started to stock up inventory ahead of the holiday season - this includes giants like Target, Home Depot, and Walmart. 

Furthermore, there’s been a bit of progress around the port congestion at Long Beach and Los Angeles.

Moving to a 24/7 operation has brought about signs of promise, where the number of containers sitting idle has fallen over 20% (according to port data). 

As a shipper or freight forwarder, it may be worthwhile exploring how you can mitigate being at the heart of these issues. Visibility technology is one helpful way to enhance your market adaptability, keeping you informed with critical data to make important decisions in real-time. This might make the difference in helping you optimize your expenditures and keep your operations flowing as smoothly as possible.

It’s more of an all-hands-on-deck approach - with government bodies, port authorities, retailers, and logistics service providers trying to fix the broken links in their supply chain perspective. Nonetheless, with the initial signs of recovery that we are already seeing, it’s comforting to have hope for a more promising outlook in the new year.

See other blog posts by me