Extensive slowdowns all along the supply chain are keeping consumers from buying what they want when they want, suggesting broader problems across the economy.<\/b>
\n(CBS Baltimore) \u2014 Why are grocery store shelves always partly empty? Why do deliveries take so much longer than they used to? Why is everything more expensive? The short answer to all of these questions and others is supply chain issues. The long answer, explaining U.S. and global supply chain issues in 2021, is not that simple. It goes without saying that the once-in-a-lifetime COVID pandemic has exacerbated existing problems. That includes a shortage of workers along the path that products take from the factory to a consumer\u2019s doorstep, creating multiple bottlenecks in a system that depends on timeliness to function. And that\u2019s happened just as demand drastically increased for those products. Even this more complicated explanation doesn\u2019t fully spell out why consumers can\u2019t buy what they want when they want. That\u2019s because there are no easy answers and no easy fixes. The supply chain is the series of steps that brings a product to a customer. Martin Dresner, Professor and Chair of the Logistics, Business and Public Policy Department at the R.H. Smith School of Business at the University of Maryland, describes it as the \u201cnetwork of manufacturers, their suppliers, distributors, retailers that are responsible for getting products from point of origin to the final customer.\u201d The network for any given company can start with suppliers of raw materials and other inputs, and include shipping those supplies to a manufacturing facility. Once inputs are transformed into a finished product, it is moved to a warehouse or a store and then ultimately to the final customer. Various agents, brokers, vendors, transportation companies, and distribution centers can play key roles along the way in ensuring a product gets made and reaches its final destination. A supply chain for a large company can get very complicated very fast. Dresner describes just how complicated in an example of a typical packaged goods company: \u201cA packaged goods manufacturer has many suppliers, and those suppliers will be supplying raw materials for use in the production process. And that could be farmers, or farmers can sell through distributors. Or the product used by the manufacturer might be manufactured themselves, so they may have other components suppliers. \u201cWe think of the suppliers that sell directly to Procter & Gamble or Kellogg\u2019s as first-tier suppliers,\u201d he continues. \u201cBut then there are people who supply them, and we would call those second-tier suppliers. And there could be third-tier, fourth-tier suppliers as well, all the way back to where the components of the product originate. That manufacturer also may not do all the manufacturing themselves. They contract out some manufacturing. Those contract manufacturers are also suppliers to packaged good manufacturers. And they have their own supply chains.\u201d Once a product is produced, it must find its way to the consumer. \u201cManufacturers will often not sell directly to customers, but they will sell through distributors,\u201d Dresner further explains. \u201cDistributors may sell to retailers, and manufacturers may sell directly to retailers. There can be other companies involved in the sale and distribution of products. There can be agents or brokers, transporters. There are all sorts of companies that need to be involved in getting the product to their eventual end user. All these companies, they\u2019re a part of that focal firm, that packaged goods manufacturer\u2019s supply chain.\u201d So many steps along the way leave plenty of opportunities for slowdowns. And those slowdowns build upon each other to create growing delays for a company. Now imagine that every company that produces and\/or sells a physical product has its own unique supply chain. Some are more complicated, some are less complicated. But all of them have basic elements in common. And all leverage the same regional, national and global systems to (hopefully) deliver their products to their consumers in a timely manner. This broader global pipeline of goods is the \u201csupply chain\u201d that\u2019s garnering headlines for causing delays and inflating prices. Cargo ships carrying approximately half a million shipping containers filled with goods from various countries in Asia await offloading at the ports of Los Angeles and Long Beach. Once they are offloaded, a shortage of truck drivers prevents those containers from moving out of ports in a timely manner. Railroad terminals, where trucks deliver goods for the next leg of the journey, are backed up with containers awaiting further transport, which, in turn, also block inbound trains. Should those goods somehow make it to a warehouse, worker shortages are limiting their timely processing. (These various bottlenecks also create delays in the other direction, as empty containers or containers filled with domestically produced goods destined for Asia can\u2019t return across the Pacific.) And, as if all of this weren\u2019t enough, the United States Postal Service has recently slowed its delivery times. The COVID pandemic is certainly to blame for this cascading array of problems in the supply chain. But it isn\u2019t the only culprit. A global microchip shortage, exacerbated by Texas winter storms that affected domestic production, is slowing the production of cars and various electronic devices. China, where many consumer goods destined for America are produced, is suffering through an ongoing energy crisis that\u2019s curtailing manufacturing. And manufacturers in many other countries with lower rates of vaccination have endured shutdowns and worker shortages brought on by the spread of the Delta variant. The Unemployed Philosophers Guild (UPG) is one of the many companies navigating the supply chain issues affecting the entire marketplace. The Brooklyn-based gift company specializes in creating and selling smart and funny gifts for smart and funny people or, as their website puts it, \u201cfulfilling the people\u2019s needs for finger puppets, warm slippers, coffee cups, and cracking up at stuff.\u201d Finger puppets of famous people, known as magnetic personalities, are among its most popular gifts, according to UPG Director of Sales, Trudi Bartow. Current bestsellers include former Supreme Court Justice Ruth Bader Ginsberg, former painter and television host Bob Ross, and President Biden\u2019s Chief Medical Advisor, Anthony Fauci. \u201cWe partner with the manufacturer to physically make that product,\u201d according to Bartow. \u201cI would say that 65 percent of our products are made overseas, which is a little bit different than if they\u2019re made in the United States. Supply chain issues for the most part right now are overseas issues, so I\u2019ll focus on that. Once our manufacturer has made the product, then we load it onto a container, load that container onto a boat. We ship that boat to the U.S. It goes to a port. It gets taken off the boat. The container is put on a rail. The rail goes into our warehouse. Our warehouse takes the container and puts it all on the shelf and marks it all as in stock. And then we sell it to physical stores or to online stores, doesn\u2019t really matter. And that product is then taken out of the warehouse, put on a truck, shipped to the store, and then put on that store\u2019s shelves, either physically, so someone can walk in and remove it and purchase it, or in some online stores purchase it and then it is shipped to them.\u201d Those finger puppets, like many of UPG\u2019s other products and goods across the marketplace in general, are taking longer to get to market. \u201cWe are not unique, as is any gift manufacturer or any manufacturer of any product,\u201d says Bartow. \u201cThere are pretty much issues throughout the entire process, throughout the entire supply chain\u2026 There really are problems everywhere.\u201d The United States is the world\u2019s largest economy. Individual consumer purchases account for over two-thirds of economic activity. Some of those purchases are services, like dry-cleaning or a meal at a fancy restaurant. Some of those purchases are goods, which could be anything from an Anthony Fauci finger puppet to a $45,000 SUV. Many Americans, particularly those with more discretionary income, shifted their spending toward goods, when stuck at home during the pandemic. Stimulus checks gave them even more money to buy things. Spending habits have favored goods ever since, stressing a supply chain that was calibrated to a more even split. Around 90 percent of goods produced travel across an ocean to reach a consumer. For a magnetic finger puppet, destined for display on your neighbor\u2019s refrigerator, that trip begins at a manufacturing plant in China, alongside thousands of other little finger puppets. And that manufacturing plant is likely experiencing problems. According to Bartow, \u201cit can start at the factory overseas, rising costs of goods, an increase in electric fees on the Chinese power grid particularly, COVID cases shutting down warehouses, while they do cleanings. Keeping distance on the manufacturing floor has created delays there.\u201d Once that little Anthony Fauci is created, it must find its way to a port, where a boat can take it across the Pacific Ocean. \u201cThere\u2019s physically a lack of drivers everywhere, so getting containers to ports is tricky, because now there\u2019s a backlog,\u201d Bartow explains. \u201cThen things are sitting on ports for extra long time, because there\u2019s delays in seafarers and boats. So now instead of sitting there for a week or two, you could sit there for multiple weeks waiting to even get a booking. And once you get a booking, there\u2019s even more delays with dock workers getting your stuff onto boats.\u201d The time for that Anthony Fauci finger puppet to cross the ocean hasn\u2019t changed. But the time for him to connect to the next leg of the trip has. \u201cNow you\u2019ve arrived at, say, the Port of LA,\u201d Bartow continues. \u201cAnd instead of taking a week to clear and get off, it could be two, three weeks maybe even more, because there\u2019s a long queue in the Port of LA. Once again these are all restrictions on the supply chain. There\u2019s not enough dock workers. The dock workers that are there are under safety restrictions. There are shutdowns for COVID. There\u2019s increased or decreased hours depending on labor. So that adds delay.\u201d Eventually the Anthony Fauci finger puppet and all his finger puppet friends find their way into the Port of Los Angeles and off the boat. But the delays continue. \u201cThere\u2019s a shortage of drivers. There\u2019s a shortage of trucks. There\u2019s a shortage of physical containers to move things back and forth.\u201d After a long road trip from the port, the finger puppets arrive at the warehouse. \u201cThe warehouse is subject to the same hurdles as everywhere else,\u201d Bartow points out. \u201cThe shortage of labor causing a shortage in packing containers. Containers can sit outside a warehouse for one to three weeks.\u201d But the trip still isn\u2019t over. When an online or physical retailer places an order for 100 Anthony Fauci magnetic personalities, a box is sent to the store. Once there, a customer can buy the finger puppet in person or online. At that point, the U.S. mail system takes over. The U.S. Postal Service has started slowing deliveries in an effort to cut costs. The inevitable result for consumers will be more delays in the last leg of that finger puppet\u2019s journey. With problems all along the supply chain and no slack to absorb them, consumers are experiencing increasing shortages, higher prices, and delivery showdowns for a wide range of goods. That could mean wine from northern California, as producers try to procure bottles and the paper for labels. That could also mean food items at the local grocery store, as retailers struggle to stock shelves. It could even mean artificial Christmas trees and decorations, which are currently stuck in ports around the country. All the supply chain issues don\u2019t bode well for the upcoming holiday season. Expect extensive delays as potential gifts, move slowly across oceans, through ports, along highways and railroad tracks to warehouses and stores. So if you\u2019re expecting to give an Anthony Fauci finger puppet to remind friends and loved ones to wear a mask, ordering early is probably a good idea.<\/p>\n