Supply and Demand
As we have learned in the last 2 years, there is nothing more frustrating than needing to buy an item that previously was always available. Only to find now that you cannot locate said item anywhere. It may have begun with toilet paper, but now the shortages are in everything, from parts for automobiles to name-brand corn chips. So how can these shortages affect our future, and what changes can we expect? Why are so many things out of stock now? Will a sense of “normal” ever return for the people of the world?
Why the Shortages
For most of us, the “why” of these shortages is a bit of a mystery to us. Businesses blame everything from shortages of raw materials to worker shortages, but the bottom line is the pandemic is the root cause. We are short on raw materials and people as a direct result of the pandemic and its deadly effect on the people. The people are divided on where they stand on this pandemic and virus. Some are terrified of it and follow every precaution and guideline they hear about. While others are not concerned at all and simply move ahead through life.
Production and People
As we all know the shortage of workers has affected a lot of production facilities. Workers who have gotten the COVID virus and those who are afraid of being exposed to it. Even some workers who have had the vaccine are a bit timid about moving about their lives as normal. The COVID virus has had such a larger effect than anyone thought would be possible at first. We all thought we would be back to our lives in just a few short weeks.
A trip to the grocery store now lets you see a cross-section of these many sides of this issue. Some masked up and avoiding getting close to others. While others go about their business as normal and do not let the virus affect their lives. And still others who are still getting groceries delivered because they are immune-compromised and don’t want to risk exposure. So the “people” factor is a large one, but what other factors are affecting our supply chains and causing us to miss items on our store shelves?
Some of the other reasons for shortages may not have occurred to many of us. Issues like constraints in international ocean and air freight capacity have had a large impact. At the height of the pandemic, almost everything around the globe came to a halt. Businesses and schools were closed, and employees and students were sent home to wait. Airlines stopped almost all international flights, which meant that cargo being shipped in the belly of those flights no longer had a ride.
Many shippers tried to change over to cargo ships for their shipping needs. However, the mishap in the Panama Canal that blocked those ships from passing through led to even longer delays. Once that log jam was finally cleared and shipping traffic began to flow again, the docks they landed at were low on the staff that is necessary to unload the cargo and send it on to its destination. It’s almost like a skit in a comedic movie that led to the shortages that we are experiencing today.
It seems there has been one thing after another that has affected shipping times and the goods and services that we all took for granted before. Other shortages, such as that of the semiconductors and even basic items such as toilet paper, have all had their demand skyrocket while the production levels cannot keep up. Every trip to the grocery stores shows new items that have become scarce or just not there at all.
In the technology world, items such as computers, NVR’s, cameras, and many other items rely on chips to function. Without them, the amount of stock has fallen dramatically while costs have risen just as dramatically. Many of the more reputable computer companies have seen their stocks dwindle with little to no idea when they can be replenished. We are beginning to see the light at the end of this dark tunnel. Supplies are still limited, but they are coming back some with rate increases. The sad fact is that many do not expect those rate increases to ever go back down to pre pandemic levels.
For many around the globe uncertain trade relations have caused leaders to question their trade practices and a fear of many is that countries will no longer be able to rely on other nations for the goods their people need. In the United States the lack of semiconductors has been considered an issue of national security. One that has many in powerful positions worried about the future. In the United States at least, we are looking to protect our future and bring more manufacturing and production jobs back to America.
This may take a few years to get facilities built and producing, but in the long run will allow Americans to rely on their own stockpiles instead of other nations around the globe. Keeping our production in country allows us to keep jobs here at home and allows us to feel a sense of security in knowing our supplies don’t have to come from halfway around the globe. Items such as semiconductors are a critical part of so many things we rely on in our daily lives. There are so few facilities that provide these products in America today.
As we have learned during this time of global crisis, supply and demand are crucial areas of concern. Without supplies and the ability to restock items that run out, we are left at a standstill. Can you imagine for a minute if the toilet paper stocks did not come back, or if the utilities were off because a crucial part was needed to fix something, and it was not available anymore?
These things may seem minor at first, and for a short time they can be, but for the long term, they can spell disaster for civilized society. The next time you see that grocery store shelf empty of a product you are missing or see the stock of one that has been missing return, remember that supplies are a precious commodity.