A global disruption in the supply chain not only continues to impact businesses and retail outlets, but could also have further impact on consumers already paying higher prices as the holiday season approaches.
This week, there was a backlog of 72 container ships waiting to unload at the Port of Long Beach.
Brian Young says inventory for his year-round Christmas and collectibles shop in Bay Park is likely stuck on one of those ships.
“We’re in a position where we’re stuck and we have to go along with whatever we can grab. Everything is coming in very slowly,” Young said.
Young, who has owned City Light Collectables for 32 years, is like virtually every other business owner caught in the middle of a major disruption in the global supply chain.
He said he’s having to pay import and shipping charges on items from China that in some case have tripled. Those extra costs will have to be passed on to consumers.
“In some cases, the cost of shipping from China to Long Beach has gone up tenfold in a year and a half, so that has to be passed on,” said Simon Croon, a professor of supply chain management at the University of San Diego.
Croon says supply chains are struggling on a number of fronts.
Among the factors contributing to the disruption: the pandemic, a massive labor shortage for truck drivers, difficulties with shipping, restrictions on travel and border crossings, as well as trade agreements.
So how did we get here?
“The pandemic was a big factor because it caused a major disruption, everybody was clamoring for paper products, water, even cans of tuna. Then there were shutdowns and the pandemic affected labor. Fundamentally, we didn’t know how to cope from a supply change issue,” Croon explained.
Meanwhile, Young considers himself fortunate because he has an enormous inventory to cover customer demand.
But inventory he should have received in July is only arriving now.
It’s forced him to hire extra workers to fill shipping orders that should have been sent out months ago. The majority of his sales are online, and customers are growing weary of delays.
“They know they’ve placed their order, they’re asking where is the merchandise and we’ve got our customer service ladies apologizing all day long. Not good for our image, but totally beyond our control,” Young said.
For now, he’s waiting for more inventory believed to be stuck on a cargo ship in Long Beach, hoping it arrives before the peak holiday season in a few weeks.
“Not happy. Not happy at all. Not happy at the whole situation. Back to square one, can’t change it. Live with it,” Young said.
Croon acknowledges the tremendous pressure on struggling businesses.
“You kind of just have to be prepared to change your way of thinking and fundamentally get close to the customer, and help the customer understand that this is the new world that we’re in,” said Croon.
He also expects the disruption to take at least two years to correct itself.
“It’s really difficult to forecast because we don’t know what’s around the corner. The variants going to have a profound effect again on the economy,” said Croon.