DETROIT (AP) \u2014 Take a step back from the picked-over store shelves, the stalled container ships and the empty auto showrooms, and you\u2019ll find a root cause of the shortages of just about everything.<\/p>\n\n\n\n
Even as the pandemic has dragged on, U.S. households flush with cash from stimulus checks, booming stock markets and enlarged home equity have felt like spending freely again \u2014 a lot. And since consumer demand drives much of the U.S. and global economies, high demand has brought goods shortages to the U.S. and much of the world.<\/p>\n\n\n\n
Add the fact that companies are ordering \u2014 and hoarding \u2014 more goods and parts than they need so they don\u2019t run out, and you end up with an almost unquenchable demand that is magnifying the supply shortages.<\/p>\n\n\n\n
That\u2019s where a big problem comes in: Suppliers were caught so flat-footed by how fast pent-up spending surged out of the recession that they won\u2019t likely be able to catch up as long as demand remains so robust. That\u2019s especially so because Americans, still hunkered down at home more than they did before the pandemic, continue to spend more on goods \u2014 electronics, furniture, appliances, sporting goods \u2014 than on services like hotels, meals out and movie tickets. All that demand for goods, in turn, is helping to accelerate U.S. inflation.<\/p>\n\n\n\n
Unless spending snaps sharply back to services \u2014 or something else leads people to stop buying so much \u2014 it could take deep into 2022 or even 2023 before global supply chains regain some semblance of normalcy.<\/p>\n\n\n\n
\u201cDemand is completely skewed,\u201d said Bindiya Vakil, CEO of Resilinc, a consulting firm that helps companies manage supply chains. \u201cThis has now become more and more painful by the day.\u201d<\/p>\n\n\n\n
One reason people may eventually stop spending so much is that everything simply costs more now. Consumer prices in the U.S. skyrocketed 6.2% over the past year as food, gasoline, autos and housing catapulted inflation to its highest pace since 1990. The laws of gravity suggest that the cumulative effect of so much inflation will eventually exert a brake on spending.<\/p>\n\n\n\n
For now, though, manufacturers foresee no end to heavy demand \u2014 and no end to beleaguered supply chains or spiking inflation pressures. A chronic lack of computer chips has forced Ford Motor Co., for instance, to revamp its system of ordering parts that require long periods from order to delivery to try to address shortages.<\/p>\n\n\n\n
\u201cIt\u2019s highlighted that the \u201cjust-in-time\u201d operating model that\u2019s been prevalent in autos may not be the right operating model,\u201d Hau Thai-Tang, Ford\u2019s chief operations and product officer, told analysts.<\/p>\n\n\n\n
Smaller companies, too, have felt compelled to build up as many supplies as they can so they can still make products. Moriarty\u2019s Gem Art near Chicago, a family business for 40 years, has been stocking up on gold, silver and platinum to make necklaces and rings, desperate not to run out of supplies as holiday orders pick up.<\/p>\n\n\n\n
\u201cWe\u2019re ordering a lot more than what we actually have orders for \u2014 just in case,\u201d said Jeff Moriarty, the marketing manager.<\/p>\n\n\n\n
Even a normal post-holiday shopping lull, though it might help, isn\u2019t expected to be enough to unclog ports, speed shipping traffic or allow factories to replenish inventories.<\/p>\n\n\n\n
\u201cThe baseline expectation for improvement is around the middle of 2022,\u201d said Oren Klachkin, lead U.S. economist for Oxford Economics. \u201cBut I think the risks of that happening later are fairly high.\u201d<\/p>\n\n\n\n
Though Americans have increasingly ventured out in recent months, the balance between spending on goods and services remains skewed. The pent-up demand that followed the economic recovery is still tilted toward goods like furniture and cars and less toward haircuts, concerts and restaurant meals. Though services spending has grown in recent months, it isn\u2019t nearly enough to close the gap.<\/p>\n\n\n\n
Since April 2020, consumer spending on goods has jumped 32%. It\u2019s now 15% above where it was in February 2020, just before the pandemic paralyzed the economy. Goods account for roughly 40% of consumer spending now, up from 36% before the pandemic.<\/p>\n\n\n\n
U.S. factories have tried mightily to keep up with demand. Production rose nearly 5% over the past year, according to the Federal Reserve, despite periodic ups and downs, including disruptions to auto production caused by chip shortages.<\/p>\n\n\n\n
Imports have narrowed the gap between what America\u2019s consumers want and what its factories can produce. From January through September this year, the U.S. imported 23% more than in the same period in 2020. In September, thanks to surging imports, the U.S. posted a record deficit in goods trade: Imports topped exports by $98.2 billion.<\/p>\n\n\n\n
Voracious demand for goods has accelerated as more people have become vaccinated in wealthier countries. Yet in poorer countries, especially in Southeast Asia, the spread of the delta variant forced new factory shutdowns in recent months and crimped supply chains again. Only recently did it start to recover.<\/p>\n\n\n\n
At the same time, many U.S. workers have decided to quit jobs that had required frequent public contact. This created shortages of workers to unload ships, transport goods or staff retail shops.<\/p>\n\n\n\n
Ports clogged up. Last month, 65 ships waited off the California coast to be unloaded at the Ports of Los Angeles and Long Beach \u2014 two weeks\u2019 worth of work. The average wait: 12 days. That has since worsened to 78 ships, with an average wait of nearly 17 days, despite around-the-clock port operations beginning in October.<\/p>\n\n\n\n
Before the pandemic, ships had set arrival times and went straight to a berth for unloading, said Gene Seroka, the L.A. port\u2019s executive director. Now, with Asian factory output at record highs, the port is moving record levels of goods. Yet it\u2019s not enough to meet the demand.<\/p>\n\n\n\n
Seroka doesn\u2019t foresee the shipments easing even next year. Retailers have told him they plan to use the slower months of January and February \u2014 if they actually are slower \u2014 to replenish inventory.<\/p>\n\n\n\n
As with ports, rail lines are moving more goods. Through early November, freight shipped by America\u2019s railroads was up 7.5% from a year ago. Truck shipments were up 1.7% in September. Yet there aren\u2019t enough drivers or trucks to move all the freight.<\/p>\n\n\n\n
In China, too, manufacturers are struggling with shipping delays, container shortages and cost increases. Shantou Limei International Ltd., which makes children\u2019s toys in the city of Shantou, expects sales to fall 30% this year because of delays and costlier shipping.<\/p>\n\n\n\n
\u201cThe most serious problem for us is being unable to deliver goods on time because of the difficulties in securing freight containers,\u201d said Frank Xie, the company\u2019s general manager. \u201cA lot of things have gone beyond our controls and expectation.\u201d<\/p>\n\n\n\n
Philip Richardson, an American who manufactures loudspeakers in Panyu, near Hong Kong, said orders have increased 400%. A key reason is increased demand from Americans and Europeans, who have gone on a home electronics buying spree. The price to ship goods to U.S. customers on a 40-foot cargo container, meantime, more than tripled in July.<\/p>\n\n\n\n
\u201cThe customer has to bear it or cut back on orders,\u201d Richardson said.<\/p>\n\n\n\n
Song Wenjie, owner of Hand-in-Hand Electric Appliance Technology Co., a manufacturer of home appliances in Jiaxing, south of Shanghai, said that soaring cargo prices make it unprofitable to ship some goods.<\/p>\n\n\n\n
\u201cThe combination of power outages and shipping delays might lead to a 20% fall in production this year, Song said.<\/p>\n\n\n\n
Among European companies grappling with snarled supply lines is Shoe Zone, a British retailer that sources most of its footwear from China. Shipping container prices have jumped at least five-fold in 12 months, said Anthony Smith, the chief executive.<\/p>\n\n\n\n
\u201cThis will continue to impact us for at least a further six months until the issues being experienced in the whole supply chain return to more sensible levels,\u201d he said.<\/p>\n\n\n\n
____<\/p>\n\n\n\n
Wiseman reported from Washington. Joe McDonald and Yu Bing in Beijing, Kelvin Chan in London and Mae Anderson in New York contributed to this report.<\/p>\n","protected":false},"excerpt":{"rendered":"
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