KINGSTON, R.I. – Nov. 1, 2021 – This holiday season, consumers will again face product shortages and shipping delays as they try to stock their cupboards for Thanksgiving and fill their closets with holiday gifts, say three supply chain management professors in the University of Rhode Island’s College of Business.
While this is the second holiday season since the start of the COVID-19 pandemic, reports of empty store shelves may be even worse than last year.
“We will see massive product shortages and delays with the approaching holiday season due to supply chain disruption and the backlog linked to the pandemic,” said Mahtab Kouhizadeh, assistant professor of supply chain management.
Kouhizadeh was joined by Associate Professor Yuwen Chen and Professor Doug Hales recently in discussing supply chain problems that are affecting the marketplace this holiday season.
Adding to this season’s problems are continuing labor and equipment shortages at all levels of the supply chain – from ports to warehouses and from transportation to the marketplace – coupled with a huge spike in demand by consumers. Suppliers and manufacturers are still experiencing capacity restrictions, logistics problems, transportation bottlenecks, and labor shortages that are preventing them from returning to pre-pandemic levels of operations.
One big bottleneck is the Los Angeles and Long Beach ports in California, which sees about 40% of all ocean-going cargo to the U.S., especially from Asia, Hales said. Port-side cranes are not offloading cargo fast enough for long-haul trucks taking goods to distributors and retailers. Truckers, already facing heavy and negative state laws affecting their ability to drive across state lines, are complaining of the intentional work slowdown by crane operators at the ports.
“Even goods offloaded last week will unlikely reach the market before Christmas,” Hales said.
Even though President Joe Biden put both ports on 24/7 operation, said Chen, slowdowns still exist at nearby warehouses that are not working around the clock.
Compounding the issue for the holidays is the fact many consumers, now vaccinated against COVID-19, are looking to lessen their pandemic restrictions – creating higher demand, Kouhizadeh said.
“I think the problems will be worse this year,” she said. “Due to the easing of pandemic restrictions, there will be higher demand for holiday essentials. This creates a huge gap between supply and demand. With widespread global supply chain disruptions, there will be more delays and product shortages.”
Hales said problems are also exacerbated this year because of the timing of pandemic shutdowns. Last season, products for the holidays were already in the supply chain pipeline because the goods had been produced by the time manufacturers in Asia were disrupted by the pandemic.
“But this year as production facilities came back online, they overwhelmed the logistics system, which was also trying to recover from having capacity reduced by COVID-19,” he said. “Plus, the demand is greater than last year because the COVID-19 stimulus money has prompted people to buy more.”
For Thanksgiving, consumers will see shortages of many high-demand products, limited product availability in markets and price increases in food and fresh produce.
“There will be a lot of shortages of many items that are needed for our holiday gatherings, from turkey and cranberry jelly, to green beans and disposable plates,” said Chen. “The delays are caused by problems at various levels of the supply chain that can be caused by shortages of raw ingredients, congestion in the warehouse, labor shortages or by third-party logistics.”
“There will be sufficient supply of the basics like turkey and ham, but consumers may not find them in the brand they want,” said Hales. “In my weekly shopping, I am already seeing new brands of meats and canned goods that aren’t normally seen in New England, but stores don’t want to lose sales and are making a greater number of generic and off-brand Thanksgiving meats and staples available to consumers.”
Chen suggested that consumers shop early and stock up on canned or frozen items with a plan of looking to replace them by buying fresh substitutes closer to Thanksgiving. But, he added, “if everybody does this, shortages will be worse because the supply chain is not designed for such double-stocking in mass.”
For gift shopping this season, consumers will see similar problems – higher prices, inventory shortages, shipping delays – in all areas, from gifts to holiday menu items. Also, with labor shortages at the wholesale and retail levels, consumers may see shorter open-hours for stores.
Hales suggested: “Buy now. Buy domestics. It may be too late for lower value items like toys from Asia to make it by Christmas, but high value items ordered now will likely by shipped by air and make it in time.”
“Any real gift that needs inventory stock and delivery are subject to shortage or delay.” Chen said.
“I think all gift areas will be impacted by supply chain shortages and bottlenecks,” Kouhizadeh said. “Consumers are likely to see higher impacts of inventory shortages, higher prices, and delays in high demand gift items, especially toys and electronics.”
Added Chen: “Don’t be upset when this holiday season is not like our traditional ones. We are in a tough time of extensive supply chain disruption.”
Hales, who has a Ph.D. from Clemson University, is a researcher on global supply chain management and Lean Six Sigma.
Kouhizadeh, who holds a Ph.D. in operations management from Worcester Polytechnic Institute, is a researcher of supply chain management, blockchain technology, network optimization, and sustainability.
Chen, who has a Ph.D. in operations management from the University of Florida, explores research interests in supply chain management, operations management, transportation and logistics, and outsourcing.
The URI College of Business serves 2,100 undergraduates and almost 300 graduate students. It is AACSB accredited, the global gold standard of academic business school accreditation, and offers 10 undergraduate majors, seven graduate programs, and three Ph.D. specializations.