Prices Rise as Supply Chains Continue to Struggle
July 20, 2021
Around the world, supply chains are in turmoil. As a result of many factors, lead times for goods have continued to increase during the year, and prices have continued to rise. While we don’t know yet how long this will last, we do know that we likely have not yet seen the upper limits of the upward trend in pricing.
As in all other sectors of the market, CORECHEM has had to work to overcome the difficulties posed by reduced availability and increased prices of drums, totes, and other packaging materials. This has led to broad price increases on most products.
Why Are Supply Chains Struggling?
The U.S. economy may have shut down last year, but consumers did not. Lockdowns led to people sitting at home buying goods online, requesting home delivery. This increased demand for goods and packaging at a time when they were in shorter supply. Spring led to the vaccine rollout, and as consumers began to get back to their normal lives, this led to further increased demand for goods. Unfortunately, the workers that produce & transport them are still behind, as they were never given a chance to catch up.
Meanwhile, the additional volume of goods trying to come into the country on container ships has overwhelmed our ports and port workers. The price of containers has climbed to astronomical heights. The containers themselves have been in very short supply, as empties are getting stuck sitting in inland depots or stacking up at cargo ports as they simply aren’t getting picked up (due to countries in various stages of lockdowns), and container manufacturers aren’t able to produce more containers fast enough. Outbreaks of the COVID virus among port workers and other essential employees has also slowed processing of container ships.
Several other factors have played a part in the issues supply chains are currently facing. Notably, the blockage of the Suez Canal for six days caused significant delays to many container ships. Some freak weather events along the Gulf Coast earlier this year also caused havoc to production of goods and shipping routes. Also, the ongoing shortage of truck drivers in the U.S. continues to be a constraint. The pandemic only made the driver shortage worse, as it became hard to train more drivers.
CORECHEM continues to work to ensure continuity of supply of goods, and is multi-sourced on many products to ensure ongoing supply. With questions about recent price increases and product availability, speak to a representative.