How shortages are snowballing through industries we rely on & what we can expect for the year ahead

The global supply chain has yet to recover completely from the shutdowns that have been a fact of life since 2019. Now, however, COVID19 is just one of several factors that are leading to supply shortages across multiple industries.

One too many businesses and industries are starting to feel the strain due to matieral shortage, rising costs and a on-going growing demand, which to no one's suprising, is having serious consequences on many the items consumers want to purchase. From everyday essentials to more luxurious items, the supply-chains are impacted across the board.

To investigate further, Lucinda Thorpe of Newgate who specialise in secured access solutions, share their insight into the chain effect that is the supply-chain.

Supply-chain issues that need to be resolved

Bringing something to a halt may be difficult but it can still be a whole lot easier than getting it restarted. As governments across the world look to reboot their economies, here are the main issues they need to resolve.

COVID-19

Overall, life is now much closer to normal than it used to be. With that said, most, if not all countries still have some form of COVID19-related restrictions in place. The only question is how severe they are. This means that there is inevitably going to be some kind of impact on the global supply chain.

Hopefully, a combination of vaccines, treatments and more severe variants giving way to milder ones will finally bring the pandemic to a close. This will finally give the global supply chain a solid basis on which to rebuild.

Environmental issues

COVID19 has coincided with major environmental issues. These have included heavy rains (and hence floods), high winds and extreme cold. Even countries that generally escape the worst environmental disasters have experienced particularly severe weather. For example, the UK has only just emerged from Storm Arwen.

In the long term, these issues may prove to be a blessing in disguise. Specifically, they may focus attention on the environment in general and climate change in particular. In the short term, however, they are compounding the issues created by COVID19.

Labour issues

Some labour issues are a direct result of COVID19. The infamous “pingdemic” is probably the most obvious example of this. Many labour issues, however, are, at most, indirect results of the pandemic. The pandemic may be exacerbating them but it is not the direct cause of them.

Possibly the most obvious example of this is the shortage of HGV drivers. This has been building up for years. What’s more, the industry repeatedly made the government aware of the issue and asked for help. COVID19 and Brexit have both exacerbated the problem but neither of them was the cause of it.

On a similar note, it’s debatable whether or not the pandemic can really be held to be the cause of the “great resignation”. It may well have speeded up the changes that led to it but that is different.

Stockpiling

At the start of the first lockdown, media headlines were full of panicked shoppers rushing to fill their trolleys with vital supplies. Although it didn’t make the news, many businesses have been doing the same, at least periodically.

Depending on the supplies they were stockpiling this might or might not have been enough to create a shortage. Any increase in demand is, however, likely to trigger a price rise. This can be enough to make it harder for some businesses (and some companies) to buy the stock they need.

Brexit

It’s hard to say what issues are being caused/exacerbated by Brexit as opposed to other factors. It is, however, hard to dispute that Brexit is at least contributing to delays at customs. While the effect of this is likely to be felt mostly in the UK, it will be causing some level of pain for other countries too.

How these issues are impacting businesses and consumers

Supply-chain issues are raising costs and creating delays. Currently, businesses are absorbing most of the initial impact of this situation. Ultimately, however, at least some of the cost will be passed on to the consumer/taxpayer.

Supply-chain issues are, for example, a major contributor to the UK’s rising inflation. As such, they have to be a major concern for the government.