COVID-19 and Labor Shortage Expected To Push Supply Chain Issues Into 2022
The pandemic upended just about every aspect of daily life, including global manufacturing supply chains. This complex system moves goods throughout the world, but has been struggling to keep up since it was disrupted 18 months ago. Supply chain issues are expected to continue into 2022; however, UPS international president Scott Price told international news agency AFP that he does not expect interruptions to push up transport costs.
Learn More: Hurricane Ida Repairs Expected to Make Supply Chain Issues Worse
Economy Explained: How Supply and Demand Impacts Your Wallet in Many Ways
“The logistics industry does not see 2022 as having any less disruption in supply chains than in 2021,” Price went on. “I half-jokingly tell people ‘Order your Christmas presents now because otherwise on Christmas day, there may just be a picture of something that’s not coming until February or March.'”
A semiconductor shortage has disturbed industries from cars to consumer electronics. Lumber has also been in short supply this year, slowing down the home-repair and building industries.
Price also said low vaccination rates in developing countries will likely lead to shortages of raw materials and other parts due to COVID-related port closures. Labor shortages in the U.S. aren’t helping either, meaning shipments may have to wait even longer until they’re unloaded, CBS added. Experts say U.S. retailers are preparing for this backup.
Despite slowdowns in global shipments, Price is confident that transport costs could be contained in 2022. The shipping, receiving and supply chain management company enacted a series of surcharges earlier in the pandemic during elevated demand and higher operating expenses.
“Some of those costs are going away,” said Price, who claimed 2022 shipping rates would be increased by 2.8% on average, well below the 10-year average, AFP reported. In 2021, prices were raised between 4% and 5.5%, depending on the market.
More From GOBankingRates
- What Money Topics Do You Want Covered: Ask the Financially Savvy Female
- The 8 Best Deals From Costco’s September Coupon Book
- Nominate Your Favorite Small Business To Be Featured on GOBankingRates
- 10 Reasons You Should Claim Social Security Early
Last updated: September 14, 2021