5 Ways The Broken Supply Chain Is Affecting Americans

ACROSS AMERICA — With Christmas just around the corner and Thanksgiving only weeks away, labor shortages and supply chain snags combined with a surge in consumer demand will likely cause a headache or two for Americans hoping to go all out this holiday season.

After cutting prices and laying off workers at the start of coronavirus pandemic, manufacturers, suppliers, and retailers are struggling to meet the rebounding demand for everything from cars to chicken wings to cleaning supplies.

Right now, it’s not one issue affecting the delivery and rising prices of goods. Rather, it’s an imperfect storm created by a number of things: closed factories in Asia, lack of supplies, labor shortfalls, driver shortages and bottlenecks at U.S. ports, where ships are waiting for days at a time to dock and unload goods.

And it’s all happening just as kids make their Christmas lists and parents decide how to spend trillions of dollars in federal coronavirus aid funneled into U.S. bank accounts this year.

While the bottleneck won’t last forever, it could take months to fix, depleting store shelves of popular gifts and other holiday must-haves.

In the end, the shortages, supply chain hiccups and transportation issues contribute to a common lament among consumers: higher prices. And while manufacturers will first absorb the costs, most of the pain will ultimately be passed on to consumers.

That means higher prices are likely to eat through paychecks just as Americans start to budget for the holidays.

On Wednesday, President Joe Biden reassured Americans fretting the space under the holiday tree will be bare that his administration is doing what it can to return the supply chain to good health.

“With holidays coming up, you might be wondering if the gifts you plan to buy will arrive on time,” Biden said in a White House news conference. “Today we have some good news: We’re going to help speed up the delivery of goods all across America.”

Until that happens, here are five ways the current supply chain issues could affect your life before the holidays:

Holiday Shopping

The consensus is clear. If you have a particular holiday gift in mind, start shopping now.

Supply chain issues and material shortages are prompting experts to urge Americans to shop for holiday gifts as early as possible this year. Toys, books, bicycles and clothes are just a few popular holiday gifts that have been subject to shortages and delays.

If you’re someone who opts for an artificial Christmas tree, you could be waiting or paying more for that as well.

Some U.S. retailers are raising Christmas tree prices by 20 to 25 percent in order to keep up with skyrocketing shipping costs, according to the Wall Street Journal. Retailers are also warning that certain trees could sell out early because many are delivered from overseas producers.

The CEO of Balsam Hill, a California company that sells artificial Christmas trees, told the Journal he also anticipates running low on many holiday items, such as ornaments, toppers and lights.

The good news is you can plan ahead. The U.S. Postal Service, FexEx and UPS have all released their holiday shipping schedules for 2021, which could help ensure gifts arrive on time.

Regardless, shoppers may need to be patient, the White House warns.

"There will be things that people can't get," a senior White House official told Reuters, when asked about holiday shopping.

"At the same time, a lot of these goods are hopefully substitutable by other things. ... I don't think there's any real reason to be panicked, but we all feel the frustration and there's a certain need for patience to help get through a relatively short period of time."

Holiday Travel

As Americans contemplate their holiday travel plans, gas prices have soared to a seven-year high.

As of Monday, the average price for a gallon of gasoline was $3.26 a gallon, up just over 6 cents from a week ago and $1.09 cents above the year-ago average, according to a Marketwatch report. Prices were at $3.26 last weekend, the highest since October 2014.

The rise in gas prices is tied to a surge in travel as the global economy recovers from the early months of the pandemic, Patrick De Haan, head of petroleum analysis for GasBuddy, told Marketwatch.

De Haan also told MarketWatch that gasoline prices are likely to rise during the last three months of 2021, which could also affect holiday spending.

“If Americans can’t slow their appetite for fuels, we’ve got no place for prices to go but up,” De Haan said.

Empty Store Shelves

With just over two months to go before Christmas, U.S. stores are struggling to keep shelves stocked with everyday goods ranging from toilet paper to televisions to chicken wings to cleaning supplies.

Shortages of virtually every type of product are apparent on U.S. shelves, according to Tao Lu, an assistant professor at the University of Connecticut who studies supply chain management and transportation logistics.

“Home furnishings, electronics, seasonal clothing, and toys are all on the grab-them-if-you-want-them list,” Lu told UConn Today. “The bottleneck across the board seems to be caused by goods being stuck in transit, especially due to congestion at ports and other delivery challenges.”

Shortages are also hitting the grocery store.

For the week ending Oct. 3, around 18 percent of beverages, 15 percent of frozen foods, 16 percent of snacks, 15 percent of candy, and 18 percent of bakery items were out of stock at stores, CNN Business reported, citing data from IRI, which tracks in-stock levels at U.S. grocery chains, big box stores, pharmacies, and wholesale clubs.

Items you may not find at stores include Rice Krispies Treats, Sour Patch Kids, some Ben & Jerry's ice cream flavors, McCormick gourmet spices, and Marie Callender's pot pies, according to CNN.

As a result, suppliers are asking some stores to limit holiday promotions to ensure the availability of products through the end of year, CNN reported.

Purchase Limits

As store shelves sit empty, some stores are bringing back purchase limits in hopes of staving off panic buying.

In September, Costco reinstated purchase limits on toilet paper, paper towels, bottled water and other high-demand cleaning products. Later, Sam’s Club also limited the number of toilet paper and paper towel products that a customer can purchase.

“A year ago there was a shortage of merchandise,” Costco Chief Financial Officer Richard Galanti told CNBC. “Now they’ve got plenty of merchandise but there’s two- or three-week delays on getting it delivered because there’s a limit on short-term changes to trucking and delivery needs of the suppliers, so it really is all over the board.”

In light of new purchasing limits, some experts are reminding consumers that while such measures might make it seem like the country is on the cusp of another bout of panic-buying, most shortages are only local, “small-scale disruptions.”

“Getting the merchandise to stores is taking longer, due to the supply-chain issues, and so this might cause some to wait. But the empty shelves will be short-term and temporary,” Lu told UConn today. “So there is no need to stockpile, and stockpiling only makes things harder to find for everyone else.”

Food Prices

Thanks to ongoing labor shortages and supply chain issues, food prices have also skyrocketed to their highest point in a decade, according to the Food and Agricultural Organization of the United Nations.

For example, the cost of meat, poultry, fish, and eggs are up 5.9 percent over last year, and up 15.7 percent from prices in August 2019, the Washington Post reported, citing U.S. Labor Department figures.

Meanwhile, there’s an extra pinch of bad news for holiday bakers — or if you just happen to have an insatiable sweet tooth.

The baking industry, which tracks prices of core ingredients like sweeteners and cocoa, is reporting price hikes in 49 of the top 50 baking ingredients, Robb MacKie, chief executive of the American Bakers Association, told the Post. The group says it expects prices of baked goods to rise another 5 to 10 percent in all categories between now and the end of the year.

The supply chain slowdown has some food manufacturers waiting anywhere from 8 to 12 weeks for the ingredients needed to make their products, the Post reported.

The hike in prices has a lot to do with food and grocery items not being able to get where they need to be. It’s also tied to an increase in cooking at home due to the pandemic.

“We went from an eating culture to a cooking culture at home,” said Heather Garlich, spokeswoman for The Food Industry Association, told the Pittsburgh Post-Gazette. “Demand doubled overnight. Demand has not abated.”

Can This Be Fixed?

The White House is responding to supply chain issues by finalizing an agreement for the Port of Los Angeles to become a 24-hour, seven-days-a-week operation. The hope is that nighttime operations will help to break the backlog and reduce shipping delays, The Associated Press reported.

Ports, however, are just one piece of the puzzle, Biden said during a news conference this week.

The president has used the supply chain issues as a selling point for his infrastructure plans. This week, he said the country needs more truck drivers as well as a supply chain that can less easily be disrupted by pandemics and extreme weather.

Many retailers are looking to summer 2022 for a full supply-chain recovery.

Meanwhile, at least six companies have made commitments to help ease the supply chain issue, according to a Newsweek report. Among them are Walmart, Target, Home Depot, FedEx, UPS and Samsung. The companies are doing so by implementing more off-peak and nighttime hours to increase output, White House Press Secretary Jen Psaki told reporters earlier this week.

These commitments will move goods faster and "strengthen the resiliency" of supply chains, the White House added.