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Global Supply Chain Breakdown: What is the Cause and When Will it End?

The Effects on Businesses Across All Industries

At this stage of the pandemic, we have all become accustomed to “covid delays” and shortages of basic supplies like toilet paper and cleaning products. What few of us anticipated in those early lockdown days was how quickly our global supply chain could come to a screeching halt and that it would stay that way for 18 months with no end in sight. 

Before global supply chain breakdowns and shortages swept the world, buying the parts and pieces needed to create products was as easy as clicking a button and waiting for delivery. Those days are gone.

Glass Shortage

As you likely are aware, glass is becoming harder to find and more expensive to purchase. Why? To make glass, there needs to be a wide inventory of raw materials available. One of the key raw materials used to make glass, which is sand, is facing a huge shortage. Many glass manufactures were also hit hard with closures that slowed glass production to a snail’s pace. Lastly, over the shut-down period, many homeowners were also investing both time and money to remodel their homes, creating an increased need for supplies. The government stimulus money created consumers who were flush with cash but constricted on their ability to spend it on things like vacations and entertainment. Those consumers began investing in their homes and purchasing goods to make the lockdowns more bearable.

Increased demand + limited production= recipe for frustration

Resin Shortages

Resin is a versatile substance that can be used in many ways. It is commonly used for making castings, flooring, countertops, and as the base ingredient for many types of plastic.  February 2021 saw the largest increase in resin prices on record in a single month and March was close behind.

“A slowdown in international imports throughout 2020 led to a reliance on U.S. manufacturers that typically sell 40% of production into the export market. While this increased domestic sales, the demand for resin still outstrips the supply by a significant margin,” according to Plastics Today.

If Covid wasn’t enough, recent weather disruptions hit U.S. oil refineries and threaten supplies of plastics and other basic materials. Texas experienced an unprecedented winter storm in February 2021 that knocked out power to the entire state for several days and quite literally froze production at several resin plants. Along with that winter storm and power outages came frozen pipes, damaged homes, and significant damage to the facilities and equipment used to produce resin. In 2020-21, several hurricanes also hit the Gulf coast causing flooding, damaged factories, and even more delays.

Ariel view of the port at Long Beach and Los Angeles California on September 20, 2021. Image by Mario Tama, Getty Images

Global Shipping Crisis
Compounding the current increased demand for products are clogged supply lines. With so many manufacturers rushing to build supplies at the same time, the containers, ships, and trucks needed to move the goods often aren’t available. That has resulted in rising prices and enormous delays at ports and logistics hubs, severely damaging supply chains around the world.

A shortage of labor, such as truck and port workers, have further exacerbated the situation forcing some ports and warehouses to have to refuse delivery due to a lack of space until backlogs could be cleared. Various ports in both the U.S. and China have had to temporarily shut down or reduce services because of COVID-19 outbreaks among the staffers who load and unload shipping containers.

The Future

At Wakefield, we custom build our racks, dollies and other glass handling equipment. Many use custom sized PVC pipes, specialty casters and high-density polyethylene. Like our customers, we too have faced supply shortages, shipping delays and increasing costs for what we once considered basic supplies. While we cannot control product availability or shipping timelines, we will always strive to provide our customers with the best customer service possible. Our goal is to meet your goals and we will work together to get through this challenging time,

There does not appear to be an easy solution to this global supply chain breakdown and experts don’t expect any relief any time soon for any of the issues listed above.

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