Breaks in supply lines causing headaches
If you thought life was finally getting back to normal, or at least entered a post-pandemic phase, a simple trip to the grocery store serves as a stark reminder that COVID-19 is still very much with us.
While nowhere near as prevalent as during the early months of the pandemic, when the arrival of the coronavirus fueled panic buying and wrought havoc on transportation services, isolated product shortages continue to crop up.
Shoppers report items such as a premium brand of meats, yogurts and select varieties of pet foods are hard to find in the region.
And what’s missing from store shelves isn’t necessarily the same from one visit to the next.
“We continue to see challenges in supply, however, the items vary, there is no set industry that is singularly affected,” Berks Countybased Redner’s Markets said in an emailed statement.
Not only is no one industry or specific commodity impacted, but there’s no one reason behind all the shortages, either, while some of the issues at work may be behind rising prices at the register as well.
Whether the result of production downturns, labor scarcity or maxedout transit networks, however, product shortages largely point back to supply chains struggling to keep up with consumer demand.
Consumer preferences
In June, Penske Logistics sponsored the Council of Supply Chain Management Professionals’ annual State of Logistics report, which was titled Change of Plans.
The report states supply chains are still in the process of adapting to new consumer spending habits brought about by the pandemic — less concentrated on restaurants and hospitality businesses, and increasingly geared toward grocery, home improvement and e-commerce.
E-commerce purchases alone grew by 33%, according to the report, driving tightened cargo capacity and rising rates whether transporting by land, air or sea.
“Resiliency, innovation, technology, and close collaboration with shippers have all been essential to weathering the rapidly changing market demands up and down the supply chain,” Andy Moses, senior vice president of sales and solutions for Penske Logistics, said of the report’s findings.
“We see this continuing as supply chains reset and adjust to a new normal as consumer preferences and expectations have reshaped the future of the supply chain during the pandemic,” Moses said.
Just last week, the National Retail Federation doubled down on worries over tightening capacity, reporting retail cargo flowing through U.S. ports is expected to set a record in August as businesses stock up on back-to-school supplies and prepare for the holiday season.
While you may be wondering what imported school supplies and Christmas decorations have to do with your milk and bread, any influx of goods that require transportation has a trickledown effect on shipping across the nation right now.
“Strong consumer demand has outpaced supply chain operations since late last year and could remain a challenge as the holidays approach,” Jonathan Gold, federation vice president for supply chain and customs policy, said of the report.
“The continuing lack of labor, equipment and capacity has highlighted systemic issues and the need to create a truly 21st century supply chain to ensure resiliency against the next major disruption,” Gold said.
Manpower issues
A lack of manpower might be at the forefront of supply chain issues, and not simply due to the increase in consumer reliance on e-commerce or general shift in spending habits.
The truck driving profession has been battling a shortage of its own for years in the U.S., with the industry currently experiencing a shortfall of an estimated 61,000 drivers, according to the American Trucking Associations.
Meanwhile, the trucking industry is responsible for moving 72% of the nation’s freight tonnage, the trade group said.
The driver shortage doesn’t strictly impact goods reaching store shelves, either, as delays in shipments of raw materials can slow or halt production of some items.
And labor scarcity is impacting just about every corner of the economy, which also impedes production — especially when facilities face temporary shutdowns for COVID cases.
“Though we have longterm pricing or supply agreements with our partners, each day we are receiving notices about a myriad of challenges that temporarily affect supply or pricing,” Redner’s said in its statement.
“We are on allocation of shipment by some manufacturers due to a downturn in production, which is relative to the current labor shortage in all aspects of the manufacturing process,” the statement said.
Often, there’s no telling precisely where the breakdown is in the supply chain.
Even extenuating circumstances and factors wholly unrelated to labor or transportation may apply.
For example, climate negatively impacting a crop such as horseradish; fewer hatchings resulting in less available poultry; or fears that a ransomware attack could lead to a meat shortage, albeit the latter never materialized.
Prices going up
Local grocery store chains were quick to acknowledge the sporadic and isolated shortage of certain items is very real.
“This is something many in the industry are facing,” a spokesperson for Giant Food Stores said in a statement. “Our supplier and manufacturing partners have advised us of supply, production and/ or sourcing challenges they are facing, which impacts what is available in our stores for purchase.”
Availability is not the only issue stores are dealing with, since certain products may be subject to price changes as well.
“Some items are seeing prices affected due to an increase in transportation costs or raw material increases,” Redner’s said. “Other items, such as paper products, are in full supply as opposed to last year, however the pricing is fluctuating as is the rest of wood: treated lumber, newsprint etc.
“The notices are changing on a daily basis with no rhyme or reason to them. We will continue to use our long-term, established partnerships to keep product flowing to our stores and our retails low based on the relationships we have built.”
Where availability is the problem, stores might seek out other options to replace missing items from their shelves.
But in the case of a popular brand name item such as Boar’s Head lunch meats carried at Giant — a victim of “significant strains on supply chains,” according to the delicatessen’s Facebook page — all a store can do is wait for the situation to resolve itself.
“We continue to remain in close contact with our suppliers and are working to bring in alternate products, but it is possible customers may find a particular brand or variety is unavailable due to these challenges,” Giant said.