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Holiday Season Supply Chain Issues

Enjoying the holiday season may be a little harder this year. With all the joy surrounding buying presents and shopping, there will be many problems for the 2021 holiday season. As retailers are trying to scramble and find solutions to the United States supply chain problem. Right now, the United States supply chain is under extreme stress from heightened shipping costs, to overbooked ports and labor shortages. These conditions have caused headaches for all companies trying to import and transport merchandise. For consumers, there will be nightmares trying to find certain gifts for loved ones during this season.
Other students have presented before on the issues surrounding the general supply chain like COVID-19and prices on the rise. Shipping container shave gone up in price 7x. Some countries are experiencing problems with COVID-19, while outbreaks will shut down their factories. Also, in Asia, there is a power supply issue which is leading to factories shutting down. Due to these factors, “Salesforce projects a 20% increase in prices this holiday season due to supply chain issues” (Forbes).Looking over these issues, prices for consumer goods will be on the rise and lead/shipping times will be unpredictable.
As holiday shopping season is getting closer, prices are going up. For many products there will be long lead times and higher prices. Normally, there are always products that are short on supply but in 2021, these will likely impact more many segments. As companies and experts are predicting this to be one of the biggest holiday seasons on record, retailers and consumers should get ready. Getting ready means shopping early than normal and expecting prices to be higher than normal.
With all those issues, companies are taking sidestep actions to reduce their exposure to the fragile supply chain. For example, Walmart is chartering its own vessels to maneuver around over strapped vendors. Walmart has made it a point to get their merchandise from suppliers and in their supply chain as quick as possible. Lululemon is flying in product to bypass busy shipping ports and Home Depot has gone to the length of reserving its own ship. Best Buy has even implemented a new subscription called ‘Best Buy Beta’, which could potential help receive limited or hard to find products.
Walmart has made it a point to get their merchandise from suppliers in their supply chain as early as possible. On their website you can find the actions they have taken to navigate through the supply chain crisis. These actions include diverting shipments to less congested ports, hired more than 3,000 drivers this year, added storage capacity in fulfillment and distribution centers and have a network of 150,000 employees.
Looking into the crisis that is on the verge of holiday shopping, there may be some solutions. For example, Walmart and Home Depot were able to essentially get their own cargo ships for their products. By sidestepping other logistics companies, it seems like this eased some pressure on their supply chain. This will also drive down the cost related to shipping costs. Another smart move is rerouting shipments to other ports. Bottlenecks at ship ports are a significant problem of longer lead times and by navigating around this, companies can get their product in their network quicker. The use of airplanes might be easier as well, while not being as cost-effective, the opportunity cost of having product as opposed to a stockout could be worth it.
All in all, understanding the supply chain crisis is a key point to finding solutions. The bigger companies have the capacities to weather the storm but, problems are still arising. Trying to use less congested ports, finding other logistics methods and getting merchandise in your supply network as quick as possible is the best way to reduce the stress of the holiday season.
Authored by: Brennan McCusker

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