The 27-year-old refrigerator/freezer in our garage started leaking. Given it’s an extra appliance we’re fortunate to have and we don’t want to fork over a lot of money to buy a new one, we called our repair man. He said it can be fixed. It needs freon which is a lot cheaper than buying a new refrigerator. Upon further inspection, he says it also needs new door hinges which is why the freezer door kept opening turning our frozen food into mush. The sticker price to fix this antique was getting higher and higher, so we decided to look for a new one.
Easier said than done. For starters, thanks to supply chain shortages, very little is available. Take your pick: Costco, Lowes, Home Depot, Walmart, Best Buy and private dealers are all out. Unless of course you want to spend a large mortgage payment. Those products seem to be more available.
When I finally did find a reasonably priced refrigerator that was actually in stock, it turns out it doesn’t come with handles. What? That’s what I exclaimed. We’re not talking about recessed handles. The manufacturer literally charges you extra for door handles. I wondered it if came with shelves. It did. But when you add the cost of handles, shipping, taxes and few other extras, you’d be better off to spend a mortgage payment and get one that comes with everything.
This supply chain mess is a real headache for consumers. Most of us have felt it one way or another. My girlfriend has been waiting nine months for a new dishwasher. In the heat of the summer when people’s air conditioners broke, they couldn’t find parts to repair them much less get new ones. The long-awaited new Apple I-phones are delayed thanks to a global chip shortage. Like when the pandemic started, my husband and I couldn’t find paper towels at the supermarket this week. Perhaps in some cases some luxuries can wait. But diapers, baby formula, medical supplies and lifesaving medications cannot.
An article in Economy reports sixty percent of U.S. adults say they haven’t been able to get a product they wanted in the past two months and nearly the same number of consumers say they’ve experienced significant delays in receiving products.
So, what’s going on? There have been endless stories explaining how the pandemic has impacted supply chains around the world. Some of these stories are very well done. Many however are overly complicated, diving into too much detail and industry jargon for the average person to fully understand. They use words like shifting bottlenecks, multi-tiered chains and scales and scopes.
As a former journalist who now helps companies and spokespeople make sense of information for others, I decided to give it a crack.
When COVID first forced us indoors, we had no idea how long we’d be stuck at home. Many of us panicked and stocked up on multiple supplies. Companies also stockpiled which depleted inventories and caused shortages. Now, nineteen months later, truckers, farmers and manufacturers are struggling to keep up with the demand. But it’s more complicated than that.
Think of it this way. If you order a new television, the parts to make that television may come from multiple countries. If the countries don’t have what they need to put those televisions together, production slows or even stops, and everything backs up. It’s like standing in line at the store. If you’re in line and three of five cashiers walk out, you’re going to be lined up much longer than you anticipated.
As explained in Forbes, sometimes it’s humans that are missing like I just described. Over four-million people reportedly walked off their jobs this past August. Other times, it’s a physical problem. Steve Wolf, a distribution consumer products expert told me it’s a domino effect involving multiple factors:
- A decrease in the supply of available cargo ships early on during the pandemic when consumer demand dropped caused shipping lines to cancel many of their routes between Asia and North America. That means goods weren’t being transported and empty containers weren’t being picked up.
- That led to a shortage of equipment, specifically shipping containers. Because these empty containers weren’t being picked up, they couldn’t be taken where needed to fill with products that have to be shipped. Compounding the problem is the price of a 40-foot container increased nearly sixfold.
- Covid and its effect on labor in China caused a shortage of truckers and trucks there as well. Additionally, when China started moving again, other countries still faced lockdowns and restrictions. This resulted in a backlog of vessels at American ports exacerbated by a shortage of port workers and truckers here.
Simply put, all of this has led to a shipping slowdown which has held up our appliances, electronics, raw materials and foods. Lumber needed to build houses is in short supply and wood used to make paper products like toilet paper and paper towels was scarce for a while prompting hoarding and price gauging. Because supply and demand are a bit out of whack, in some cases manufacturers are now paying higher prices to get what they need and they’re passing those costs onto us.
How long this crunch will last is uncertain. Some say we’ll be dealing with it for another six months. Steve Wolf doesn’t see a resolution for at least a year.
In a world that has become so politically divided where many of us can’t see eye-to-eye, one thing seems certain. From computer chips to coffee to cell phones to some of our basic everyday needs, we’ve all been cast in the same play. If one of us can’t perform, the play is in jeopardy. Yet, like cogs in a wheel when we communicate like a well-rehearsed troupe, we’re like a fine-tuned production that performs well together, and everything falls into place.