It takes a special kind of crisis to make both chocolate milk and roofing shingles hard to find.
The global supply chain has a knot in it. It’s a bigger issue than a cargo ship stuck in a canal or, for that matter, hundreds of cargo ships waiting off the California coast to dock and be unloaded.
From school lunches in Lafayette to herbicides on central Indiana farms, the global shortage hits close to home.
Christmas trees, sweaters, gifts in shipping mess:
How supply chain issues will affect holiday shopping
It’s a confluence of events that includes not just a worker shortage – affecting not only production of hot dogs but delivery of said hot dogs to your grocery store shelves – but production of materials for new houses, motor vehicles, computers, books – virtually everything necessary or desirable in our lives.
The supply chain problem is why hospitals like IU Health Ball Memorial are keeping a watchful eye on their supplies of plastic necessities, like IV tubing and syringes, and why your homebuilder is cautioning you that shortages of lumber and shortfalls of appliances could delay completion of your building project or boost the cost.
Like seemingly everything else we’re dealing with in the past couple of years, it’s tied to the COVID-19 pandemic and changes in the workforce, but the supply chain is also its own separate problem.
“I’ve been in construction for over 30 years,” Terry Robinson, owner of Richmond-based Trademark Construction, said. “It’s like we’re upside down. The tables are on the ceiling, and nothing is what you think.”
‘They couldn’t even tell me when in 2022 they would be available’
We’re familiar with how a global shortage of computer chips made it harder to buy a new car or truck and how spasms in the workforce meant that your favorite restaurants cut back on their hours due to lack of employees.
But the supply chain problem affects even those who aren’t in the market for a vehicle or planning to dine in or carry out at random eateries. Unless you grow all your own food and make your own clothing or never have a need to fix your leaky roof or need hospitalization, you’re affected by the supply chain.
School lunches in the Tippecanoe School Corporation were adapted to reflect supply chain issues, with common items possibly missing from the menu. Lori Shofroth, the district posted in a note to parents earlier in the year.
“School corporations and store shelves alike are facing unprecedented issues with the supply chain,” according to the announcement. “This will cause the Nutrition Services Department to alter our posted menus with little to no notice. We are working closely with our distributors and manufacturers to secure both the food and supply items needed to support our program.”
Bill Johnson, Purdue professor of weed science and Purdue Extension weed specialist, said in a university release that producers should plan to minimize the impact on corn and soybean production in the Midwest.
“Plan your upcoming weed control strategies to accommodate for limited availability because of supply or price of these two active ingredients,” Johnson said. “Even if there isn’t a widespread shortage, farmers will likely encounter higher chemical prices resulting in major challenges for corn and soybean production.”
“I had roof damage from the storm that hit Fishers back in June, and I’m still trying to get a roof because of the delay in shingles,” Mary Townsend said in an interview. “You walk into Lowes or Home Depot and everything is on back order.”
Townsend called the manufacturer of the shingles she wanted. “They couldn’t even tell me when in 2022 they would be available.” Townsend hopes her second choice in shingles will work.
So what’s the problem? “Supply chain concerns are a result of ‘record-level congestion at the Port of Los Angeles/Long Beach that has spread to the East Coast, the widespread power outages across China, shortages of truck drivers and service workers, and COVID-19-fueled infections and restrictions,” Tinglong Dai, a business professor at Johns Hopkins University, told USA TODAY for a recent article.
Since the 1970s, U.S. manufacturers have outsourced the production of many everyday products and components to other countries around the world, The Los Angeles Times reported in mid-October. The Times cited the American University Auto Index in noting that about half the parts of each Dodge Ram 1500 truck assembled in the United States last year came from outside the U.S. and Canada. Plants in China and other countries were shut down by COVID outbreaks, the Times reported.
But demand for everything from new automobiles to new appliances for kitchen makeovers ramped up after a short COVID slowdown in 2020. Manufacturers and supply chains – already hit by shutdowns, missing workers and shortages in warehouse workers and truck drivers, for example – fell even further behind.
In recent weeks, hundreds of container ships waited outside California ports for a chance to dock and be unloaded. The Biden administration announced in mid-October that the Port of Los Angeles should operate around-the-clock to try to alleviate the backlog, but work schedules and contracts at the ports have to be amended.
Even when container ships can be unloaded, the cost of shipping a container is more than 10 times what it was before the pandemic, the Times reported.
Some of those costs are passed along to consumers, even if reluctantly on the part of businesses. In some cases, homebuilders have tried to avoid passing along the cost.
The new normal?
“We were absorbing those costs,” homebuilder Terry Robinson said. He cited OSBs, Oriented Strand Boards, which are plywood-like wood panels commonly used in four-feet-by-eight-feet sheets in construction. “We had to buy up a considerable amount of it because we were aware that we were not going to be able to get any. We purchased it at a pretty exorbitant price.”
Robinson also bought drywall in large quantities and “five houses worth of appliances” to try to keep his construction projects going. “Cabinets went from three weeks to six weeks to nine weeks,” he said. “We used to get a house framed up and then we would order the kitchen. We don’t have that luxury anymore. We have to order the cabinets before the house is started.”
Despite the supply chain issues – or in addition to them — the nation is in a building boom, fueled in part by low interest rates. “We have 18 customers we’re talking to about building a house,” Robinson said. “That’s about three times normal.”
For every $1,000 increase in the price of a home, about 4,000 Hoosiers are priced out of the market, said Rick Wadja, chief executive officer of the Indiana Builders Association. Homebuilders are keeping close watch on prices, he said.
Wadja said there’s no quick end in sight for the supply chain problems.
“None of those solutions will come overnight,” he said. “Depending on who you ask … this is the new normal or not.”
Shortages can also potentially complicate life-and-death matters, like surgeries and healthcare treatments.
Healthcare working around supply chain issues
Doctors in Lafayette recently noted that supply chain problems are a very real concern for the healthcare industry.
In Lafayette, the supply-chain bottleneck means a shortage of baby bottles, nipples and formula, Daniel Wickert, vice president of medical affairs for Franciscan Health Lafayette, said. Certain tubing used in medical procedures, including epidurals, has also been in short supply.
“We are seeing things very similar in the East Central region,” said Jeff Henderson, regional director of supply chain operations for IU Health East Central Region, including Ball Memorial Hospital in Muncie.
“Plastic seems to be the issue,” Henderson said in an interview. “Anything made with plastic. Tubing, syringes, those sorts of things are on back order or allocated. It might be a couple of weeks instead of a couple of days.”
There’s no effect on patient care because IU Health’s systemwide distribution process has the “buying power” to ensure hospitals are well-stocked with tubes for IVs and suction, as well as other plastic items, including baby bottles.
As for a return to normal, Henderson said supply chain projections don’t go much beyond the end of the year.
Dreaming of a different Christmas?
From chocolate milk to some types of lunchmeats to soda in plastic or glass bottles to canned goods and flashlights, shelves are bare at some stores. And people have noticed.
“People are hoarding in Lafayette,” Larry Broadwater said in response to a question posed on Facebook for this article. “Sam’s Club and Meijer were packed, and people were carrying out tons of stuff.”
Executives at Kroger, one of the nation’s largest grocery retailers whose stores include Pay Less and Ruler Foods, acknowledged the supply chain problems in a September call with investment analysts.
“Consistent with many retailers we experienced supply chain constraints and increased warehouse and transportation costs during the quarter,” said Gary Millerchip, Kroger chief financial officer. “We are actively managing this risk … by securing increased capacity and augmenting associate retention programs within our own facilities. We expect supply chain costs to remain elevated in the second half of the year.”
Kroger chairman and chief executive officer Rodney McMullen said the supply chain issues might be “transitory, but you still have to manage through it.”
A few weeks ago, people started wondering what effect supply chain issues might have on the most buying-focused period of the year.
The kink in the supply chain prompted USA TODAY to note, in mid-October, that people might want to start their Christmas shopping sooner rather than later. “It’s only October, but it’s already time to start your holiday shopping in earnest. For years, Thanksgiving and Black Friday have marked the official kickoff to the holiday shopping season and the time of year when shoppers get focused on holiday spending. Last year, retailers pushed a longer shopping season with more online sales amid the pandemic. This year, the third week of November is too late to get started.”
There’s a remedy for some Christmas concerns, Mary Spears Fitzgerald said.
“I haven’t experienced a shortness on things I’m wanting for Christmas, but I’ve been shopping local or my favorite artists.” Fitzgerald, whose background is in retail in the Muncie area as well as in the New York area, added, “I do foresee issues. There are shortages everywhere.”
Deanna Watson of the Journal & Courier also contributed to this article.