by Scott Ronalds
Looking to upgrade that weary La-Z-Boy? You’ll be lucky if you can get a new one by Christmas. A spike in demand coupled with ruptured supply chains has resulted in massive delays and shortages for everything from furniture to frappuccinos. I can attest. We’ve been shopping for a new sofa and have been told to expect to wait 6-7 months for delivery.
We all experienced first-hand the shipping delays at Amazon early in the pandemic. And you may have heard about the hiccups Peloton and Apple have had in getting their products into homes (spin bikes and iPads have been among the pandemic’s biggest winners). Outdoor toys such as paddleboards, kayaks, and camping gear were also notoriously hard to come by last year. But manufacturing and shipping delays have become even more far-reaching.
Starbucks has run out of flavourings, breakfast items, cups, straws, and yes, even cake pops at many locations. Ketchup packets and gardening seeds have become currency thanks to their scarcity. Pet food, chlorine (for pools and spas), and aluminum cans are apparently in short supply. Need a new chair for the home office? Good luck with that. And bikes, boats and cars are backed up, the latter thanks to a global shortage of semiconductor chips.
It’s been a perfect supply chain storm. Factories have been intermittently shut down because of Covid outbreaks, dockworkers and truckers have been impeded by the virus, there’s a shortage of shipping containers in Asia, and 401-like maritime traffic has piled up at west coast ports. Throw in a blockage of the Suez Canal thanks to a wedged tanker, and you’ve got the ultimate logistics headache. All the while, demand for goods has surged as consumers are flush with government stimulus cheques and have had a big dip in their dining out and entertainment expenses (until recently, at least).
A direct impact of these supply-and-demand imbalances is rising prices (inflation). We’ve seen it loud and clear in the commodity space. Oil, lumber, copper, steel and many key industrial metals have risen substantially. Furniture, appliances, and clothing prices, too. In fact, U.S. consumer prices overall increased at the fastest annual rate last month since 2008.
These issues will eventually work themselves out. Suppliers will get more creative in ramping up production, factories will suffer fewer Covid-shutdowns as vaccines roll out, shipping bottlenecks will abate, and corporate purchasers will diversify their sourcing. In the interim, consumers will have to accept some inflation. This isn’t such a bad thing, as it means that demand for goods & services is robust and the economy is recovering nicely. Plus, corporate earnings have been strong, which has helped buoy the stock market (in particular, the economically-sensitive companies of late).
Similar to vaccine hunters, I expect we’ll start to see services emerge that will source some of these hard-to-find items quicker. Meanwhile, if you’ve got a line on Adirondack chairs, hit me up.
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