Shaky supply chains cause delays
Shortages hitting economy in sectors including grocery stores, car dealerships, contruction materials and more
Connecticut car dealers can’t get cars, builders wait months for construction materials and retailers worry about stocking everything from Halloween costumes to Christmas tree ornaments.
The supply chain troubles that meant shortage of Lysol wipes and Purell hand sanitizer in early 2020 are now hitting all sectors of the economy — often with no obvious reason or pattern.
At the same time, a few of the troubles that had eased in the past year show signs of resurfacing. Connecticut Costco stores two weeks ago imposed a one-per-customer limit on toilet paper and paper towels, which were abundant — though more expensive — for many months following the severe shortage early on in the pandemic.
Predicting just what products and supplies will abruptly vanish isn’t simple.
“Just when I think things are getting better, they’re not. You get a full order for one week, the next week there’s a shortage,” said John Salerno, owner of the Tops Marketplace supermarket in Southington.
“Apple juice and orange juice are hard to get now. Dairy is horrible — yogurt and cheese, you can’t keep that full,” Salerno said. “Paper is still a struggle, you get it in, it goes out. All summer long it was Gatorade — it was impossible to keep a full shelf, and I don’t know why.”
A similar pattern is hitting manufacturers, industrial supply houses and contractors; a few items that were once plentiful suddenly hit deep delivery delays and price swings.
Douglas Bromfield ordered about 170 windows to complete the 24-unit apartment building he’s restoring in New Britain; that was in April, and he’s still waiting.
“Some things everybody knows will have a long lead time — an elevator, you have to pre-order that early. But now it’s windows, electrical control panels, roofing, things you used to be able to get the next day,” Bromfield said.
Economic analysts point to a series of causes — many of them global. COVID-19 outbreaks continue to force periodic factory shutdowns, long-haul truck drivers — and more recently, even trucks — are in short supply, and the once-reliable transoceanic shipping industry is teetering on breakdown.
Reuters last week reported that Walmart, Costco and Target are chartering their own container ships to skirt the lengthy backlogs at West Coast ports, where scores of massive freighters are waiting to be unloaded. Shipping analyst Steve Ferreira of Ocean Audit describes record backlog as “containergeddon.”
Salerno sees a problem closer to home: A labor shortage in Connecticut. This summer, his suppliers started missing deliveries.
“They’ll call and say ‘we just can’t get a truck out to you.’ It’s loaded and sitting there, but they don’t have anyone to drive,” he said.
The ripples are slowly changing how many businesses operate, and it’s unclear whether things will go back as they were — or if this will be typical for the future.
The process of buying a new car, for instance, is very different than in 2019, said Mark Mitchell, general manager of Simsbury-based Mitchell Auto Group. His dealerships in Canton, Hartford, Windsor and Simsbury once had up to $50 million worth of vehicles on their lots; now inventory is about $10 million.
“The dealers don’t stock cars like we did. We’re taking them in at a much lower pace. Now when a car comes in, it goes out,” he said. “If we don’t have the inventory, we don’t see as many cars, but we’re probably more efficient.
“We’re working with fewer people these days. Mostly we see people by appointment. You can still walk into the showroom and if somebody is free they’ll talk with you, but most of it is by appointment now,” Mitchell said.
Car buyers are finding higher prices and less selection from virtually all manufacturers.
Globally, the automotive industry has been hammered by a shortage of semiconductors since the pandemic began. This year alone the industry will produce nearly 4 million fewer vehicles than it had planned, the consulting firm AlixPartners reported.
“The industry at large is highly susceptible not just to chip shortages but to future disruptions for many materials, from steel to packaging,” the company said in a July analysis.
Buyers who want a certain mix of options on a specific model in a specific color will face significantly longer delivery waits.
“If you’re flexible, you’re OK — and your used car is worth more. But buyers aren’t going to get the discount they used to,” he said.
When Salerno went car shopping, he saw that trend firsthand.
“First, there are no new cars, second you’re paying a ridiculous price. I said I’d just wait for the ‘22s, and one dealer told me they didn’t know what (models) they’d get in and that it would be $1,500 over MSRP,” Salerno said.
He ended up buying a 2021 from a different dealership at sticker price, but skipping his choice of color and other options.
“When I asked about a ‘22, he said ‘Maybe in December.’ That’s the way you do business today,” Salerno said.
To adjust to shortages, Bromfield is overhauling how he plans construction jobs.
“On one project we were going to do bar joists — we are doing it with I-beams instead,” he said. “We’ve become flexible to go with what’s available. My interior designer goes to a supply house to select what’s readily available instead of what’s her first choice.
“Floor tile, floor finishes — these things are usually (available) off the shelf, but now you’re going to three sources to get everything,” Bromfield said.
A few blocks from where Bromfield is restoring his building, Avner Krohn is constructing a 107-unit, $19 million apartment project. His architects changed a few design features of the New Britain project to omit hard-to-get materials, and for an even larger project in Bloomfield, Krohn is ordering wood for all four floors at once rather than as his crews need it.
“It takes a lot more planning. And then it’s all about pivoting,” Krohn said. “You may have to modify a roofline to go with what’s available. We’re all going through this.”