‘It won’t be until mid-to-late 2022’: Experts say supply chain issues will continue through next year

Local News

HARLINGEN, Texas (KVEO) — Global supply chains are struggling to meet the demand of shoppers eager to put the pandemic behind them. Shipping issues are affecting everything from computer chips to Starbuck’s espresso.

Demand for things returned to normal very quickly as the pandemic restrictions began to be lifted, but the ability to supply those things is not back to normal yet. And Bryan Kerrick, a professor at UTRGV, said he believes it won’t be for a while. 

“It’s going to get a lot better,” Kerrick said about the upcoming year. “But probably it won’t be until mid to late 2022.”

Kerrick said some of the supply issues we’re experiencing now will be fixed after the holiday season but there is still a long way to go.

“It won’t be as noticeable, but there will still be longer lead times,” Kerrick said. He explained that for every item that is manufactured, the parts or materials for that item need to be ordered and the item to be built. That is referred to as lead time.

Because of the issues with lead time, Kerrick said “the variety that you’re looking for of whatever product you’re after may not be available to you” right away.

The pileup with the pandemic is causing a crunch right now but Kerrick said it could benefit companies and customers in the long run.

The pandemic will have an effect on the global economy for years to come. “A lot of companies are now looking at their supply chain and how to make them more resilient and not so vulnerable to a pandemic if you will,” Kerrick said.

In 2018, President Donald Trump started a trade war with China. Kerrick said the uncertainty of that event caused companies to look into expanding their sources of goods and materials to avoid future issues.

Companies started doing what Kerrick called a “China plus one” strategy, where they would have one source of materials and goods that were outside of China –such as Southeast Asia– so if the trade war continued or worsened, they would still have the ability to get those goods and materials from their source outside of China.

“Now they need to have a dual source,” Kerrick said. “If everything is sourced offshore, they may go and develop a regional source. Or, one locally and domestically here.”

Companies looking to move away from Chinese manufacturing could benefit ports of entry in the Rio Grande Valley.

Having manufacturing in North America would stop companies from dealing with stalls in large ocean ports like what is happening in the port of Los Angeles. “China plus one makes sense, except maybe it’s China plus one in Mexico,” Kerrick said.

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