Why there’s no relief in sight for supply-chain woes – or the accompanying price hikes
The ongoing supply chain crisis that’s affecting a range of industries around the globe isn’t sparing small businesses in the U.S.
And logistics experts say the problems are likely to get worse before they get better — potentially dragging into 2023.
The situation has put tremendous pressure on businesses, leading to increased prices and hamstringing their ability to grow, even with high consumer demand. It’s also affecting the industrial real estate market.
From automotive manufacturers and grocery chains to small retailers and restaurants, businesses around the nation are feeling the heat with no relief in sight — especially as the holiday season looms.
Bill Thayer, co-founder and co-CEO of Fillogic, has a first-hand view of the strains in the complex global network. Thayer’s company converts underutilized nonretail space in shopping centers into microdistribution hubs — essentially creating middle- and last-mile distribution centers.
Thayer said the pandemic significantly accelerated trends that were already occurring before it began, with e-commerce experiencing the equivalent of 10 years of growth in 18 months.
As reopenings gradually occurred at retailers, restaurants and other sectors, that injected even more demand into the network but left the supply-chain infrastructure misaligned, Thayer said.
“That growth has not dissipated,” Thayer said. “The U.S., specifically, and the world in many cases, can only operate at what’s called peak [capacity] for a few months. Whole networks have been in peak since March 2020.”
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