Will the Supply Chain Disaster Affect Holiday Shopping?


Courtesy of CNBC

The COVID-19 pandemic has caused an increasing number of problems in the global supply chain.

Tiana Salisbury, Editor

The global supply chain is currently a disaster for people throughout the world. Consumers have to wait an extended period of time to receive the products they need because of product shortages, and suppliers are under stress from the rising demands of consumers.

These problems have been largely a result of the COVID-19 pandemic. In the beginning stages of the pandemic, many people became unemployed, and numerous factories were forced to close down or reduce production because of COVID-19 outbreaks. In response to this, many shipping companies anticipated a drop in demand for the transportation of goods and cut back on their services.

However, as the pandemic continued on, consumers began to purchase home appliances because of the increased number of lockdowns throughout the world. People began to use their homes as offices, gyms, and other facilities, which required certain equipment and furniture. Consequently, factories that produced these items suddenly had a spike in demand for their products. As these factories kept producing more products, the demand for components of the products, such as electronic parts and chemicals, also increased. As these components needed to be transported to factories, finished products also needed to be shipped off to consumers around the world. 

I remember seeing cargo ships backed up at Long Beach in August, and I find it crazy that these problems are still occurring.

— Juliana Neemeh (11)

Since shipping companies did not expect this intense demand for their services, there has been a lack of shipping containers and workers at ports and trucking facilities. Not only did this cause the price of shipping goods to skyrocket, but the time to unload cargo has also increased. The shortages of dockworkers and truck drivers have caused cargo ships to queue up by ports around the world. For example, the port of Long Beach has been congested with cargo ships due to the high demand to unload shipping containers off the ships. Juliana Neemeh (11) recalls seeing numerous cargo ships backed up in August and finds it “crazy that these problems are still occurring.”

As suppliers and retailers try to keep up with increased transportation costs and shipping delays, they are raising the prices of their products. According to the New York Times, consumers have had to pay 5.4% more for their products as compared to how much they have paid last year. Even though prices are rising, companies like P&G, Chipotle, and Nestlé have noted that consumers continue to buy their products. 

Numerous economists believe that the supply chain problem will likely continue for at least four to sixth more months, which means that the current issues will affect people’s holiday shopping. Considering that delivery times and product prices have sharply increased, people should begin shopping for the holiday season as soon as possible. There is no guarantee whether purchased gifts will arrive on time or not, especially gifts like electronics that are sure to be in high demand.