Supply chain disruptions plague several industries ahead of the holidays – Boston University News Service



By Stella Lorence
Boston University Statehouse Program

BOSTON – The ink Keith Beaudette uses to make personalized promotional items like t-shirts and water bottles uses the same resins that are used in plastic medical products, including syringes.

About four months ago, the companies supplying this ink put a quota on how much companies like Beaudette’s Marcott Designs could order per month, as they were also providing raw materials for COVID-19 vaccination efforts. .

In addition to the ink ration, Beaudette struggled to order enough shirts that he usually receives, which he says is “a little inexplicable”, at least compared to resin quotas.

“It’s random,” Beaudette said. “You will go one day and they will have stock, you will go the next day and they will not have any. “

Layering designs in Attleboro is just one victim of the supply chain disruptions that spill over into the economy locally and nationally, and not all companies have been as good as Beaudette’s at “taking over the business.” hits and survive ”.

Businesses that envision the approaching holiday season and the prospect of regaining some of the business lost from months of shutdowns are doing what they can to consolidate inventory now or explore new options with distributors and shipping.

“It has a ripple effect on the whole economy,” said Christopher Carlozzi, senior state director for the National Federation of Independent Business.

The shortages affect a range of businesses, from restaurants that can no longer obtain certain ingredients they previously had no problem obtaining, to manufacturers competing for the same raw materials.

September report of NFIB members found that 35% of business owners reported a “significant impact” on their business due to supply chain disruptions.

“The impacts can vary, but overall they can be hit and miss in terms of product availability,” said Bill Rennie, vice president of the Massachusetts Retailers Association. “And if you see empty shelves in stores today, that is exactly what it is.”

Severe weather – like the month of February cold wave in Texas – and the obstruction the Suez Canal have also contributed to supply chain disruptions.

But many experts agree that the COVID-19 pandemic is the main culprit, both of supply chain disruptions and the resulting labor shortage.

“The pandemic has changed all kinds of things and all kinds of assumptions about things,” said Phineas Baxandall, senior policy analyst at Massachusetts Center for Budget and Policy, a left-wing think tank.

Baxandall explained that people buy more goods than services and that for many people the pandemic has been a wake-up call for the low wages they are receiving.

“People have in mind a concept of what is reasonable in terms of benefits, job flexibility and wages,” Baxandall said, noting that job flexibility is also linked to child care. ‘children for many – an industry that has also been disrupted by the pandemic and the lack of vaccines for young children.

For the shipping industry, labor shortages and supply chain disruptions are more closely related. The lack of truck drivers and port workers has resulted in delays in the unloading and delivery of goods to ports around the world.

“The supply chain will become more and more of a public issue for customers as the holidays approach,” said Rennie.

Rennie explained that the holiday season didn’t have the same problem last year as most of the products shipped to online shoppers were already in the supply chain.

Some retailers may find a way around shortages this year by paying for more expensive shipping methods to meet demand (and potentially passing the cost on to customers), or by using connections with another supplier, a Rennie said.

But the labor shortage remains a problem for many companies.

“The staff shortage is very well known and is sort of a constant concern,” said Rennie. “What we’re seeing is some people are saying, ‘I can figure this out, I can make it work, and I’m not going to go back to the schedule I had before. “”

Some believe that labor shortages may be attributed in part to the relatively generous unemployment benefits offered by the federal and state governments throughout the pandemic, with which companies have had to “compete” to bring back the benefits. people in the workforce. Massachusetts Basic Unemployment Insurance benefits have a maximum amount of $ 974 per week.

Carlozzi’s survey of NFIB members found that just over half of homeowners surveyed currently have positions they are unable to fill.

But Baxandall said unemployment insurance benefits are only part of the equation.

“Maybe these are people’s perceptions, and there might be individual workers that are the case, but the data clearly contradicts that,” he said.

If unemployment insurance benefits were the only reason for the labor shortage, Baxandall explained, then the state would have seen an “avalanche” of new workers when federal unemployment insurance benefits expired. last month. On the contrary, the state unemployment rate increase from 5% to 5.2% in September.

The Retailers Association of Massachusetts has been working on the “public policy side of things” to deal with labor shortages, Rennie said. They are waiting for the state to step in with tax revenues or federal funds from the American Rescue Plan Act to replenish the state’s trust fund for unemployment benefits. The trust fund’s closing balance was in the red at the end of May, according to the most recent monthly report of the Office of Labor and Workforce Development.

Nationally, the Biden administration has been working to address supply chain disruptions. President Joe Biden announced the creation of a Supply Chain Disruption Task Force in June and more recently reached a agreement with the Port of Los Angeles to begin 24/7 operations, doubling the number of port hours per week.

The Port of Long Beach had entered into a similar agreement a few weeks earlier. Together, the two ports see 40% of shipping containers that pass through the United States

“The commitments made today are a sign of major progress in moving goods from manufacturers to a store or to your front door,” Biden said in his announcement of the deal. “However, we need to take a longer-term view and invest in building greater resilience to withstand the kinds of shocks we’ve seen time and time again, year after year. “

There have been no announcements of similar plans to extend Boston Harbor hours of operation. The Massachusetts Port Authority did not respond to requests for comment.

Even with the efforts of the Biden administration, it’s unclear how long the disruption will last.

Jean-Sylvia from Bridgewater Trophy, which provides personalized rewards, said he buys what he can when he begins to notice that certain items or materials are running out in the country. He has yet to lose business due to the disruption, but said he is wary of still being able to do so.

“Until next summer, at least, I’ll be ready for this,” Sylvia said. “I think it’s going to last a while.”

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