The COVID-19 pandemic is far from finished wreaking havoc on global supply chains. Although the disruptions interrupting toilet paper supply may seem like distant, bad memories from 2020, many other challenges have arisen in 2021. They are expected to continue well into 2022, said Raj Srivastava, an FGCU professor and the director of the university’s center for supply chain excellence. “I’m an optimist,” Srivastava says. “I’m thinking it will clear up by the middle of next year.”
Construction companies, car dealers, appliance companies, furniture stores, grocery stores and a litany of other businesses have learned to adapt amid what can be chaos. In September, sport drinks such as Gatorade vanished from some grocery store shelves as COVID-19 cases continued to surge. At one point, there were a record 56 cargo ships stuck at sea because the California ports were overwhelmed with activity.
The onset of the COVID-19 pandemic in March 2020 helped to create numerous factors that have led to the supply chain disruption, Srivastava said. Those factors include a nationwide shortage of truck drivers, a shortage of shipping containers, rising fuel prices and a shortage of other workers. “What we used to have is a problem for one or two days, maybe,” Srivastava says. “What has happened is during the shutdown, none of the ships were moving.”
The COVID-19-related shutdowns changed consumer habits. It also created pent-up demand for when the shutdowns ended. “Think about the average customer who spent, maybe $500 a month on entertainment,” Srivastava says. “Going to the movies, traveling, all of those things. Once the pandemic began, they weren’t spending their money on that anymore. Now they had this disposable income. The demand for furniture, for electronics, it all went higher. They’re all shipped over here.”
Added to the pent-up demand: even more demand from holiday shopping season. “So it snowballs,” Srivastava says.
In the case of the 2020 toilet paper shortage, there wasn’t so much a shortage as a perception of a shortage that drove the demand. “It wasn’t that the producers were wrong,” Srivastava says. “The producers were producing the amount that was scheduled. But because of COVID, airports and offices were closed. It was panic buying; [customers] started hoarding. Or it might have been that people were just getting more than what they needed.”
Construction company executives have had plenty of toilet paper on hand, but not enough construction supplies. What they first noticed a year ago persisted well into 2021, said Mark Stevens, founder and president of Stevens Construction. “It hasn’t improved,” Stevens says. “Over time, you start to learn just to accept the challenges you’re dealt with.
“I gave this some thought. It’s not all from COVID,” he says. “I think COVID was the original disruptor, but there’s just a lot of things involved. Now we have other issues with the resurgence of COVID and this new strain, and with some environmental challenges.”
The January deep freeze in Texas and Hurricane Ida’s walloping of the Gulf Coast in August only made things worse. “There was damage done to a lot of buildings,” Stevens says of the Texas freeze. “It took some of those manufacturing plants offline. Their pipes burst. Hurricane Ida is going to exhaust some resources, as well.”
That’s not even getting into the coronavirus. “We’ve actually had to shut down a few projects because an entire subcontractor had tested positive,” Stevens says.
The shipping container shortage also has caused some havoc. “There is a real shortage right now worldwide of those containers,” says Victor Claar, associate professor of economics at FGCU. “And another problem with them is because they are used for across-the-ocean, transatlantic and transpacific shipping, once they go one way, then the only way that you can use them again back here is if they need to come back the other way. So, it’s sort of a twofold problem with those containers right now, because there aren’t enough to go around, [and] the ones that do exist are not in the area you need them right now.”
Claar compared it to a glut of Uber drivers all being at the airport and not in the neighborhoods where other people need rides. “It’s something you don’t think about because that seems pretty removed from you at Publix and you in the grocery section at Target when you’re buying your groceries here in Southwest Florida, trying to make money work,” Claar says.
Staffing shortages combined with the supply issues just slow the process even more, said Eric Collin, CEO of Firmo Construction since 2003. “Even without a small fraction of your labor, it just creates big challenges,” Collin says. “People aren’t going back to work.”
Like Stevens Construction, Firmo Construction has been ordering supplies in anticipating the need for them. “A year ago, two years ago, you could expect that if you needed drywall for a project, as long as you were doing it in a couple of weeks, the supply house would keep up with what you needed,” Collin says. “Now that two weeks can become three, four, five or six months. You have to make sure you have what you need, when you need it.”