Supply Chain Chaos


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Curious why your packages have been taking a long time to be delivered to you? This has to do with issues regarding the supply chain. Due to the coronavirus pandemic, the supply chain has experienced many disruptions throughout the country and has caused the prices of goods to rise. A supply chain is defined as a network between a company and its suppliers to produce and distribute a specific product or service. It is used for product development, marketing, operations, distribution, finance, and customer service. The supply chain on a global level involves the distribution of goods and services throughout the global network of a trans-national company to maximize profit and minimize waste.

Due to the many COVID-19 mitigation measures, there was a huge reduction in produced goods nationwide. Chief U.S. economist at Mizuho Services, Steve Ricchituo says, “The result of that imbalance between supply and demand eliminated all the inventory and eliminated all the grease that allows the wheels of commerce to work smoothly.” There have been shortages in many products which will have detrimental effects on this year’s Christmas season. As the coronavirus pandemic grows longer, the supply chain issues are only expected to get worse.

The United States is currently suffering from a high inflation rate. Inflation is the rate at which the value of currency is failing. This can lead to the price for goods and services to rise. It is said that inflation will cause this year to be the most expensive Thanksgiving in history.

In order to keep up with the rising prices, most large retail employers are increasing wages. The rate surged to 6.2% in October 2021 which is the highest US rate since November 1990. These high prices will likely last beyond next year. Workers are getting paid more money, but it still is not enough to keep up with the rising prices.

When lockdowns were put in place back in early 2020, the demand from consumers went down causing the amount of goods being produced to go down as well. Now that lockdowns have been lifted, the demand for goods has seen an increase. CNBC says, “Power shortages in China have affected production in recent months, while in the U.K., Brexit has been a big factor around a shortage of truck drivers. The U.S. is also battling a shortage of truck drivers.

Lack of produced goods are not the only shortages being faced in the global supply chain. Worker shortages have been at an all time high as well. Many people who worked as truck drivers quit their jobs causing hundreds of thousands of job opportunities to open up. According to ABC news, companies such as Amazon, Target, and Walmart are doing everything possible to get people to work in warehouses by providing them with benefits like free college tuition. The global supply chain issues are important to take into account before making a decision. It would be wise to do holiday shopping early this year.