The Global Supply Chain Crisis, Shipping Crunch, and Local Businesses

At this time of year, businesses are gearing up and getting their inventories prepared for the holiday season. This year, these preparations have greater urgency and more is at stake, due to the double-dilemma of the global supply chain and shipping crunch. How can businesses—particularly those that are small-to-midsized—meet this challenge?

A look back

Not surprisingly, the supply chain and shipping troubles began taking shape with the outbreak of the COVID-19 pandemic. In a recent ABC News feature on “Good Morning America,” Lara Spencer, Rebecca Jarvis, Becky Worley, and Tory Johnson offered commentary of the causes, concerns, and possible solutions to this situation. In a reversal of how overproduction contributed to the Great Depression of the 1930s, underproduction is responsible for the current crisis. Consider:

  • The pandemic forced manufacturing companies and warehouses to shut down.
  • As the general population “sheltered in place,” a greater-than-usual number of purchases were made online.

The situation as it is now

So, with people having been unable to enter their workplaces to manufacture the products to fulfill these many orders—as well as delayed means to deliver them to waiting customers—a backlog began, and has grown to great proportions. (The lead-in to the ABC News feature reported that 100 ships were waiting to enter two ports in California. The irony was that the products being shipped still did not meet the consumer demand.

A look into the possible future

While there is no clear prediction as to when this crisis will either reverse course or end, the worst may be in sight, according to an article in Business Insider. Citing research from Jefferies Group, an investment banking company, a rebound may take place when the holiday shopping window closes and that there should be a noticeable improvement by the middle of next year. Despite these reasons for hope, however, the article goes on to state that reviving the supply chain will be a challenge, and that a great deal of effort must be spent in order to eventually match supply with demand. And how are local, small-to-midsized businesses expected to manage?

What local businesses are facing, and how they can manage…

Local merchants and retailers are indeed facing the worst of the global supply and shipping crunch crisis. Rebecca Jarvis noted that many of these businesses are getting cancellations for orders that were to be filled in November because they will not likely be received until February. Tory Johnson addressed these concerns with a checklist of practices that owners of local businesses should follow in navigating this challenge:

  • Keep lines of communication open with all shippers, retail partners, and anyone connected with a business and ensure that information is consistently up to date.
  • In the event a retailer cancels, consider pop-ups, local trunk shows, and holiday markets as alternate avenues to move merchandise.
  • Seek opportunities to cross-promote with other local businesses.
  • Utilize social media platforms to reach consumers. Facebook, TikTok, and Instagram have selling tools for transactions between merchant and customer.

As Lara Spencer said: “This is the time to celebrate small businesses…shop local.”

The EGC Group continues to monitor current events and the changes that can impact businesses, large and small. Here is an overview of the services we provide. Get in touch if you think we can help your business.