Reports indicate that sales of kosher foods during this past Yom Tov were at record levels but at the same time retailers faced some unprecedented challenges of keeping their shelves stocked. There were shortages of snack items, beverages, and even meat. The calendar no doubt contributed to both the soaring sales and the shortages since there were a string of back-to-back Yomim Tovim and Shabbos. Retailers said that they were simply unable to restock their shelves fast enough. A growing community stocked up for the long Yom Tov and surprisingly bought far more than in a typical year (more stayed close to home since Israel was closed to tourists), but they also blamed the ongoing crisis of the supply chain in the US.
One retailer that exhorted a national beverage brand to restock depleted shelves was told: “If you have qualified drivers, we’ll give you the trucks and fill them with the product you need.” This was, of course, not a problem reserved only for those observing the Yomim Tovim; it was a national problem that seems to be getting worse. The kosher stores were able to replace brands and somehow manage to get products to the kitchens of families observing Yom Tov. National chains and others were not so lucky.
Covid has definitely played a role in the supply chain crisis, By the middle of September there were more than 1,000 cargo ships off the coast of California that were not allowed to dock or unload. A record 62 cargo ships were waiting to dock at the ports of Los Angeles and Long Beach, and were stuck floating off the coast amid a serious supply chain crunch that could mean fewer toys for the upcoming December holiday season. This comes at a time of a sharp increase in the demand for cargo ships, a manpower shortage and Covid-19 safety measures that further slow the unloading process.
Several industry groups representing 65 million transport workers warned that the situation is getting progressively worse. The groups called for world leaders to give transport workers more mobility and access to the COVID-19 vaccine. The shortage is also exacerbating efforts to control inflation as prices soar due to shortages. The pandemic-related product shortages from computer chips to construction materials were supposed to be resolved by now but instead are only gaining in intensity.
Americans who were used to having products on demand are suddenly finding that items they covet are in short supply. The most recent victim is lumber where shortages resurfaced after it was thought that they had ebbed. Buying a new car is not as easy as showing up in a showroom as car dealers face significant shortages. The shortages have caused prices to spike for new cars, leased cars and even the increased demand for used cars. Toyota announced last month that it would slash its global production of cars by 40 percent. Said the New York Times: “Factories around the world are limiting operations — despite powerful demand for their wares — because they cannot buy metal parts, plastics and raw materials. Construction companies are paying more for paint, lumber and hardware, while waiting weeks and sometimes months to receive what they need.”
The shortages are now worldwide. A recent survey by the Confederation of British Industry found the worst shortages of parts in the history of the index, which started in 1977. Economists fear that a prolonged supply chain crisis will have a devastating impact on world economies. It would trigger higher prices and send the fear of uncontrolled inflation into the veins of bankers in many countries who may in turn raise interest rates. There is still hope that Covid-19 will subside ending the labor shortages and restarting the supply chain. But if it persists and indeed gets dragged into 2022, the crisis will become more endemic than just a hiccup in an otherwise thriving economic environment.
Cars are not the only items that are much more costly. The cost of construction, for example, has risen as companies are paying more for lumber and hardware, while waiting weeks and sometimes months to receive what they need. Some companies have responded by cutting back on production. The curtailment of the supply chain is being felt nationwide. The New York Times put it this way: “A shipping container that cannot be unloaded in Los Angeles because too many dockworkers are in quarantine is a container that cannot be loaded with soybeans in Iowa, leaving buyers in Indonesia waiting, and potentially triggering a shortage of animal feed in Southeast Asia.”
“There is no end in sight,” said Alan Holland, chief executive of Keelvar, a company based in Cork, Ireland, that makes software used to manage supply chains. “Everybody should be assuming we are going to have an extended period of disruptions.” One economist said that this year saw “a crazy chain of events” that included a container shortage, followed by delays in unloading cargo at American ports, because workers stayed home to slow the pandemic’s spread. In late March came the incident in the Suez Canal, where a stuck ship blocked hundreds of other ships. In May, China shut down a huge container port near Shenzhen — one of the nation’s leading industrial cities — after a small outbreak of a coronavirus variant. In the middle of August, Chinese authorities shut down a container terminal near the city of Ningbo after one employee tested positive. And so it went, leading to the unprecedented supply chain crisis.
For the first time Americans could no longer take for granted that the products they routinely buy will be on the shelf. They learned that even toilet paper and tissues could be scarce. They may still get the shock of their lives when they see that Black Friday will showcase prices that are way higher than they ever were. The icing on the cake will be a severe shortage of items during the upcoming December holidays.
One report showed that shipping a 40-foot container of games from Shanghai to Michigan before the pandemic cost $6,000 to $7,000. Now it will cost at least $26,000 and will most likely rise to $35,000, because of rail and trucking difficulties in the US.
A good friend of mine who has been an importer from China for many years told me that he was shifting his business to another Asian country because labor is not as cheap or good as it was in China and sea transport from there was no longer reliable. The price of moving goods to the US from Asia is up as much as tenfold since the beginning of the pandemic. The big question is when will the supply chain go back to normal? So much depends on the answer to that question.