Understanding the Great Supply Chain Disruption: Impact on North America
The supply chain disruption has affected every aspect of manufacturing and shipping in North America. Here’s what you need to know.
It’s no secret that the pandemic significantly disrupted the supply chain. While many experts thought this upheaval was a short-term problem, it’s become increasingly clear that North America will have to deal with supply chain issues for years to come. As the industry scrambles to adapt to a new normal, here’s what you need to know about the supply chain disruption.
How the pandemic created a supply chain issue
This crisis can easily be tied to the start of the pandemic, which led to worldwide lockdowns and economic slowdowns, along with mass layoffs in a variety of industries. It was at this point that many manufacturers and shipping companies committed a fatal mistake – they assumed demand would decrease for many products and proceeded to slow down production.
Instead, demand surged. While buying patterns definitely shifted, consumers were still interested in a variety of goods and services. Home gyms and work-from-home essentials became top of mind for many, for example. When companies realized their error, demand had surpassed supply to the point where they’re still working on catching up.
Who was affected?
The short answer: almost everyone. Here are a few high-profile examples:
⦁ Whirlpool. Customers were recently told that they would experience massive delays when buying washing machines, fridges and other appliances as the company continues to tackle supply chain problems.
⦁ Tesla. The company may have announced record profits due to overwhelming demand, but they admitted sales would suffer because of supply chain issues.
⦁ Car manufacturers. This industry is facing a chip shortage, which affected car production all over the world.
Understanding the great shipping container shortage
Even if manufacturers could keep up with demand, they face another problem – shipping containers are in short supply. Due to the supply chain disruption, containers started piling up in cargo ports, inland depots and vessels that have been held up.
This was particularly detrimental to Chinese factories, who struggled to ship their products worldwide.
Surging demand and labor shortages
As a perfect storm of high demand and low production brewed, demand rose even higher for durable goods like office furniture, electronics, and kitchen appliances. Online shopping also skyrocketed, leading to increased demand during a time when the supply chain was already strained.
The sheer amount of orders made it even more difficult to find shipping containers, which have become exponentially more expensive.
At the same time, businesses began to see labor shortages as companies couldn’t find workers – including truck drivers – needed to transport goods. This, combined with component shortages – like computer chips – strained an already crippled supply chain even further.
Navigating difficult times
As businesses attempt to adapt to a new normal in manufacturing and delivery, companies continue to struggle with supply chain issues – which are expected to last well into 2022. As a company with years of transporting experience, Ship North America understands the struggle many businesses are facing when trying to transport their products. We’re happy to help you navigate these turbulent times.