UAB professor and supply chain expert explains how COVID-19 has disrupted the economy’s supply chain and what that means for holiday shopping. Throughout the ongoing global pandemic, there have been disruptions in supply chain management due to lack of employees, resources and supplies to build and deliver products.
“Many items are taking longer than expected for delivery, and shortages are underway for several food and beverage products,” said University of Alabama at Birmingham’s supply chain expert, Thomas DeCarlo, Ph.D., Ben S. Weil Endowed Chair of Industrial Distribution in the Collat School of Business. “This year, the supply chain is going to heavily impact the upcoming holiday shopping craze.”
A vicious cycle of need
“Fundamentally, COVID issues are the primary cause for the lack of employees and supply chain disruptions,” DeCarlo said. “The supply chain issues being experienced start with the docks in California, which accounts for 40 percent of all U.S. imports, then carry over to issues in the warehouse and with transportation. It’s a vicious cycle.”
DeCarlo explains that COVID-related issues are contributing to the backlog of unloading products off ships due to a lack of dock and warehouse workers and truck drivers. In addition, cargo containers from ships are being held up because of a shortage of truck chassis that hold the container and transport the container to a warehouse.
Warehouses are full due to worker shortage and the lack of truck chassis to move the product from the warehouses. Thus, the full containers are kept on the chassis for storage, resulting in a lack of chassis needed to unload the ships.
Several factors affect some products differently than others. For example, there has been a shortage of computer chips from China due to a variety of reasons, such as COVID’s limiting the number of workers and a lack of electricity to power the manufacturing plants, both of which have contributed to lower productivity and output. The lack of computer chips has caused a slowdown of auto manufacturing in the United States and is predicted to reduce the availability of electronic devices. Other products from China, such as patio furniture, are also facing the same problems along with reduced output.
Supplying the suppliers
DeCarlo says, in the United States, we are facing a manufacturing slowdown due to a lack of product availability from suppliers for manufacturers, as well as a shortage of truck drivers, both of which have contributed to empty shelves.
As an example, DeCarlo highlights the supply chain issues we are experiencing in U.S. bourbon distilleries, which are having a difficult time getting enough glass bottles to fill and sell their products.
“The lack of supplies and resources will likely alter the brands available in the stores soon,” DeCarlo said. “Distilleries will have to make strategic decisions as to which type of bourbon to bottle, which will likely increase prices.”
Thomas DeCarlo, Ph.D.
Photography: Steve WoodWhen to buy
According to DeCarlo, the best time to holiday shop will most likely depend on the types of products consumers are interested in purchasing.
Consider purchasing technology-related products — laptops, iPhones, etc. — as soon as possible.
“There was a recent shut down of Chinese manufacturer iPhone suppliers, which will likely affect product availability in the near future,” DeCarlo said.
DeCarlo recommends researching the availability and cost of the specific product line consumers are interested in purchasing for Christmas.
“Take a look at online or brick-and-mortar stores to know what is available and price points so you aren’t caught off guard when the product doesn’t arrive during Christmas or costs an exorbitant amount of money,” DeCarlo said.