SAN DIEGO — For anyone who has noticed lower supplies of certain things at local stores, there’s a reason for it, as supply chain issues are still having an impact amidst the pandemic.
The slow recovery of the global supply chain that started with the pandemic is having a major impact on local economies. It can be seen inside grocery and convenience stores, from empty shelves to low supply.
Joel Sutherland is a professor in practice at the University Of San Diego School of Business. He uses the upcoming holidays as an example.
“We’ve got issues of backed up container traffic in the ports of L.A., Long Beach as well as around the world,” Sutherland said. “Backed up at plants that are making key parts or components or products, so you think of all of those companies that are operating that are backed up in the global supply chain that are getting geared up for Christmas.”
Things like wood, paper, car components, toys and bathroom fixtures are produced on one side of the planet and need to get to the other, but first, all the parts need to be manufactured.
“All it takes is one part to be delayed that goes into the assembly of a car and that’s true for all kinds of equipment,” Sutherland said. “You can’t complete the assembly or the production and that’s true for all kinds of equipment.”
Another part of the equation is a major labor shortage and workers not indicating they are rejoining the workforce any time soon.
“Well, it was $12 an hour,” Sutherland said. “Now we’re gonna pay $15 dollars an hour, now we’re gonna pay $18 an hour. Amazon is developing distribution centers around the country and around the world that are smaller footprints closer to the customer. They can’t find the labor force and so when that crush comes for Christmas and you can’t get the labor, guess what, you’re either going to get it late.”