Global supply chain delays, shortages could hike prices, limit options on shelves

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Supply chain shortages
Global supply chains continue to deal with interruptions and the trucking industry is feeling the squeeze which could lead to ripple effects on consumers down the road – Sep 28, 2021

Global supply chains continue to deal with interruptions 18 months into the pandemic, with some retail markets experiencing product delays and shortages along with rising prices, as consumers adjust their spending habits and COVID-19 waves rock different parts of the world at different times.

One expert says the pandemic is clogging supply chains much like a car accident jams up a highway.

“It resolves itself, but in the short term, there’s a fair bit of challenge for consumers and retailers alike,” Michael LeBlanc with the Retail Council of Canada told CJOB on Tuesday.

Supply chain problems are affecting a range of products because parts are often sourced overseas, he said, adding that retailers will face the ongoing question of trying to figure out the difference between temporary and permanent consumer trends amidst the pandemic.

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Integral players along the chain like Manitoba’s trucking industry are feeling the squeeze, effects that could ripple down to consumers, executive director of the Manitoba Trucking Association told CJOB on Tuesday.

“Within our industry, due to the semiconductor shortage and some other kind of manufacturing component shortages, we have heard that purchase times for trucks and especially trailers are very extended, and costs because of that are rising as well,” Shaw said.

“We had a member tell us last week they placed an order for 10 new trucks. The delivery date on those trucks is going to be 2023.”

Click to play video: 'Supply chain delays threaten Christmas shopping'
Supply chain delays threaten Christmas shopping

Order delays of this magnitude are beginning to present challenges and throw off budgeting, financing and procurement schedules, Shaw said.

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“All of those impact your pricing out to your customers in the market,” he said. “We’re OK now, but it’s some interesting times.”

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Delays aren’t the only battles on their plate, he said, as the industry faces a labour crunch and rising prices for everyday items like tires, which cost eight per cent more so far this year.

“For an industry that utilizes a lot of tires, that’s not an insignificant number. So, even the equipment we can get our hands on, in some instances, the prices are going up on those items,” Shaw said.

“I think it’ll impact — and I think we’re already seeing the impacts of it — in the supply chain through, you know, higher commodity costs and higher grocery costs.”

Sylvain Charlebois with Dalhousie University’s Agri-Food Analytics Lab echoed these sentiments, telling CJOB that labour and transportation pinches could hike food prices and make it less affordable.

“Before (the) pandemic, the market was pretty predictable. Not anymore, on a variety of issues, just because we’ve actually changed our behaviours,” Charlebois said.

“I suspect that most Canadians may underappreciate how difficult things have become across the supply chains.”

Meanwhile, LeBlanc says retailers are trying to adjust along with consumers as economies fluctuate and vaccination rates increase.

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“(Retailers are) looking hard at, ‘Should we make decisions differently around the supply chain? Should we get more vendors? Should we consolidate our vendors? … or do you diversify?'”

“It’s probably the case for many items that your choice will be more limited than it was in the before time, but you’ll still be able to buy products…. Maybe you don’t get the brand of tire that you were looking for, but you can still get the tire.”

Click to play video: 'Consumer Matters: Retail warning to do your Christmas shopping now'
Consumer Matters: Retail warning to do your Christmas shopping now

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