Americans are no stranger to shortages. During WWII, coffee, butter, and canned milk were in short supply. In the 70s, it was gasoline. And during the COVID-19 pandemic, we all faced a shortage of toilet paper.
Now, as life is slowly getting back to normal, we still face a few post-pandemic-related shortages. As if COVID-19 wasn’t bad enough, computer hackings and deep freezes hampered a rebound in the supply chain.
This summer, consumers can expect to pay more for gas, chicken wings, sausages, and bacon.
Washington University Professor Panos Kouvelis is an expert at supply chain management. He says many of these shortages will be short-lived.
“Because, I think, we understand where the shortage is coming from, and I don't think that the reasons that caused it in the first place are going to persist,” Kouvelis explained.
The short-term shortages are also a result of the Texas deep freeze and recent cyberattacks. None of these shortages are expected to last through the summer.
There’s a chicken wing and sausage shortage, but that’s due to increased demand. Kouvelis says there are only four or five companies that drive the whole industry, and there's not a lot of capacity.
Consumers can also expect to pay dearly for that summer vacation this year. Rental cars are still incredibly hard to come by, with some customers are paying hundreds of dollars a day.
“The car manufacturers, definitely, if they start producing cars, they're not going to make the cars for rental companies because that's not the high margins for them,” Kouvelis explained.
That shortage is predicted to last past the summer, potentially a year, thanks to a chip shortage.
Kouvelis adds chip manufacturers had plenty of inventory back in March of 2020. However, cars weren’t selling, so automakers lowered their chip orders.
“The computers and the consumer electronics were selling very well during the pandemic, so they absorbed most of the capacity of the chip manufacturers. When the car companies went back and tried to increase their orders when they started seeing the demand coming back by last summer.”
Kouvelis says by then, the chip companies had already distributed beyond capacity.
Are you looking for new appliances or furniture? How does six months sound? Experts say it has nothing to do with making the appliances. It has everything to do with shipping those appliances from China.
And you might not want to even consider remodeling right now. Lumber mills are dealing with labor issues and capacity constraints. In 2019, an 8-ft 2X4 would run you about $3. Now, you’ll pay $8.25.
So, how about goods like toilet paper, dog food, and diapers? They all have made recent shortage lists.
Kouvelis blames social media for those. He says freaking out doesn’t make it any easier and asks that everyone stop hoarding goods.
Kouvelis expects supply will be back to normal by 2022. However, he warns about any small disruption or virus surge could impact supply. His advice? Prepare yourself for what could be coming down the shortage supply train tracks. Right now, we’re on course, but it doesn’t take much for a derailment.