These days, everything from the seemingly random shortages of items in the grocery store to the small-print warnings that your online purchases could experience shipping delays can all be traced back to a woefully out-of-whack supply chain.
The everyday items and services we’ve all come to take for granted — buying half-and-half, getting the kitchen repainted, buying a new couch — have been disrupted by the Covid-19 pandemic, and more specifically, the unpredictable delta variant. As we’ve all been forced to acknowledge over the past 18 months, when one point in the supply chain gets disrupted or delayed, the reverberations are felt down the line. More than 70 container ships unable to unload goods at ports in Los Angeles and Long Beach isn’t just a nightly news story. It’s the reason why the patio furniture you ordered in June still hasn’t arrived.
Fixing what ails the supply chain won’t be easy or quick, experts say. At its core, the problems plaguing nearly every disruption along this globally interconnected network is a lack of labor. The container ships off the coast of California don’t have the longshoreman to unload them. A shortage of truck drivers — a problem that existed pre-pandemic, but one that has only worsened since — means goods can’t get from the ports to warehouses to then find their way to retailers and consumers.
Tony Costa, chief information officer at Bumble Bee Seafood says the pandemic has been a bit of a “double-edged sword” for his company. In 2020, demand for Bumble Bee’s products soared, with 6 million new customers trying the company’s shelf-stable offerings as the pandemic unfolded.
However, a spike in the delta variant in some of the countries where it sources goods is now forcing Bumble Bee to look for different suppliers. “We have all this renewed interest in our products, but we have all this disruption in the supply chain,” he says. “It’s so integrated globally that any one issue has an impact on everything downstream.”
As companies like Bumble Bee experience increases in demand, they’re also having to contend with rising transportation costs and longer delivery times because of labor shortages. Costa says he’s seen four- and five-fold increases in shipping costs. “Our typical truck shipment was between $4,000 and $5,000 before the pandemic,” he says. “Now we’re seeing upwards of $19,000.” He also says the transit of goods is taking three- to four-times longer than usual.
Labor shortages at every part of the supply chain are having an impact on companies of all stripes. It’s also affecting economic growth. A survey of local chamber of commerce leaders by the U.S. Chamber reveals that 90% of these leaders say that labor shortages are limiting economic growth in local areas.