More than one year after the start of the COVID-19 pandemic, many consumers are finding themselves face to face with empty store shelves. Investigative Reporter Katie LaGrone speaks on how pressures in the supply and demand chain are only part of the problem.
From lumber to chlorine to chicken to cat food, by now you’ve heard product shortages are back. Actually, since the pandemic began, product shortages never really stopped.
Star Distribution is a Plant City-based middle man in the supply and demand chain. Last year, the company invited us in as the pandemic forced staff to work around the clock to keep up with the demand.
Remember the toilet paper fiasco? Fourteen months later Larry Jimenez, Vice President of Business Development, said the latest round of shortages is less about a lack of product and more about people.
“So when you go to the store and see the shelves empty, it’s not because the products are short it’s because nobody is there making the cans to put the product in to get it to the shelves,” said Jimenez. “We’re also having the same problem in the supply chain because nobody wants to come here to work."
He added they, too, are running short on workers.
“We’re short on general labor, we’re short on truck drivers, we’re short on forklift operator. We could add another 10 truck drivers today and that would be huge for us,” Jimenez said.
He’s paying overtime for the same work done a year ago.
In addition, Jimenez said a coast-to-coast truck drive cost $5,000 in fuel last year whereas this year, the same trip can run $15,000. But it’s not because of fuel costs, instead, he said, it’s a lack of drivers.
“This is the first. I’ve been here 18 years and I haven’t seen it like this before,” he said.
Some of his manufacturers are in the same boat.
Erin Meagher founded Beneficial Blends, an edible oils company that produces coconut oil for Publix. Her 65-employee company needs workers.
“We called four different staffing agencies and asked each to send four people on a Monday morning and one person showed up that Monday morning. It’s a difficult situation for everybody,” Meagher said.
Experts point to COVID fears, pandemic-inspired childcare issues and stimulus checks as among the reasons many Americans are still not returning to work.
Last month, the U.S. added 266,000 jobs which fell dramatically short of the one million jobs expected.
Still, worker shortage remains half of the product shortage problem, according to the Consumer Brands Association.
“Essentially we have been in a crazy demand cycle for a long period of time and the system is stretched,” explained Katie Denis, Vice President of Industry Narrative.
Lumber, metals, steel and computer chips are among some of the products playing catch up with increased demand during the pandemic.
As for whether consumers should expect price increases, Denis said...
“This is something the industry has absorbed and absorbed and absorbed so this has been a year of absorption. I think we’re starting to get signals from our customers that this is a lot and we’re not sure how much more we can take and continue to make things and continue to get them to the consumers especially with inflation coming."
Dr. Seckin Ozkul, Director of the Supply Chain Innovation Lab at the University of South Florida in Tampa, said price increases are likely but temporary.
“Yes, but normally there are also checks and balances within the market on how much [consumers] can really pay. Consumers have a lot of power,” he said.
Ozkul expects it will take 12-18 months for the supply and demand change to settle down and, everyone agrees, we should expect more bumps along the way.