United States World

Shortage is due to American Consumerism, not Supply Chain

Business Insider reported that despite the reports that shortages in supplies had been causing shortages on the shelves, this is actually not true: in fact, Americans have simply been purchasing more.

US imports have been at record highs at ports. National Retail Federation reported that in fact, without shortages, Americans would likely spend even more money to purchase goods.

Americans are struggling to obtain even the simplest goods, such as toilet papers, paper towels, milk, toys, and even cars.

However, ultimately, America being short of everything claim is inadequate to explain the true nature of the situation, which is that America has imported more in the past 8 months.

Country’s inventory to sales ratio shows a 10-year low, indicating that in fact, America is low on “stuff.” However, Port of Los Angeles reported at 30% uptick in incoming cargo in the first nine months of the year, although most of these items are nonfood goods. Port of Charleston, South Carolina, has seen record breaking cargo, so much so that warehouse space is “effectively sold out.”

In the first nine months of 2021, retail sales were up 14.5% over the same period in 2020. Most retailers now believe that consumer spending power is stronger than ever, and the trend should be expected to continue.

True shortages do exist. Semiconductor supply will likely be lagging behind demand for years; furniture makers are short on foam.

However, most consumer goods are not actually facing shortages. Instead, there are full warehouses, jammed ports. and record high transportation prices. Options are limited; either clear away the backlog container by container, or block up the actual supply chain by preventing further clogging by the supplier.

Coree ILBO copyright (c) 2013-2021, All rights reserved.

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