Headlines across the nation herald a great calamity: ships and trucks backed up at ports, fuel pumps running dry, shelves empty of toys.
All fingers point to one culprit: the supply chain.
But what bearing do 80 container ships floating outside of Los Angeles have to do with Morgantown, more than 2,000 miles away?
And what exactly is the supply chain?
According to West Virginia University professor of global supply chain management Ednilson Bernardes, Ph.D., the supply chain is, “the collection or set of organizations and people and processes and technology responsible for us having what we need in our daily life.”
It may be modern, but the global supply chain itself is not new, whisking goods around the world for hundreds of years. What is new, however, is how modern producers use the supply chain.
“Organizations try to locate the manufacturer in the regions across the globe where the labor cost is lower, and because of that we benefit from a lower cost. It’s beneficial to produce … thousands of miles away and bring that by ship, it’s still cheaper than producing it locally,” Bernardes said.
Bernardes uses the example of the iPhone: designed in California but assembled in Southeast Asia from components produced across several countries, before being shipped to Alaska for distribution.
“The modern global supply chain is responsible for our current lifestyle,” he said.
Complex system, complex problems
While this system may help to keep prices lower most of the time, the past weeks and months have shown that this ‘stretched out’ system leaves it exposed to complications that can quickly compound.
When the pandemic first began, lockdowns around the globe meant a reduction in demand for supplies and services, leading companies to shut down their production. Now, with vaccines allowing people to re-emerge, demand for practically everything has soared.
“You have kind of a perfect storm happening here. You have demand that is really, really high, higher than it used to be if we compare with numbers from years past. And then you have manufacturing, an entire system that is slowly coming back. So they are not operating at the level that they were operating before,” Bernardes said.
The machinations of global industry, including these slowdowns and complications, have a very real impact on prices and availability of many products locally.
“You have a supply chain issue, that means … if you look at pumpkin, the inputs that go into pumpkin production, to the ability to find workers to harvest pumpkins, to the cost of the can that the pumpkin goes in, are all both slower and more expensive. So these things are taking longer to get to the shelves, and are more costly,” said WVU associate professor and Extension Office Family and Community Development Agent Lauren Weatherford.
The issue is not that goods are completely unavailable, but rather that they aren’t available in the abundance or at the prices to which we have become accustomed.
“Instead of having 50 deep on the shelf, we’re having 10 deep. So if you don’t get there when it gets stocked, you may not have access to it. And that’s everything from cranberries to toys and electronics,” Weatherford said.
With Thanksgiving just a few days away, and Christmas right on its heels, rising prices and supply issues can bring added stress to an already stressful season, on many levels.
“You’re looking at your Thanksgiving dinner, most of us don’t want to compromise what we’re going to put on our plates for our families. Where we’re going to compromise is how much we give to charity,” Weatherford said.
The holidays are often a time of charity, known colloquially as “the giving season.” Some organizations estimate that as much as one-third of all donations come in during the last three months of the year.
“Individual donations are really, really important to our work,” said Mountaineer Food Bank communications coordinator Gabri Bonazzo. “Food insecure families are being hit the hardest right now.“
Hunger and food insecurity were already serious issues in West Virginia, and the pandemic only served to exacerbate them.
“When the pandemic first started, we did see about a 30% to 40% increase. Before COVID-19, the number was 250,000 individuals struggling with hunger. And that number is estimated to be around 324,000 now.”
Supply chain issues have frustrated efforts to ensure West Virginia’s food banks and community pantries are stocked during this time of increased demand. Bonazzo says her organization has noticed the cost of their food purchases going up 10% to 15% in the last few months, with increased shipping costs on top.
“The supplies of donated foods are really challenging right now, especially since most of the food consumed in West Virginia is sourced from out of state. So we’re struggling to find donated non-perishable food items and proteins. And then when we do find donated products, the freight has nearly doubled in cost for us. A load that would have cost us around $1,500 to have delivered in a Mountaineer Food Bank is now costing anywhere from around $3,000 to $3,500 per truckload,” Bonazzo said.
Cost isn’t the only issue. According to Bonazzo, once food is secured out of state, it can often take two to three months to receive delivery.
Labor compounds the issue
Mountaineer Food Bank’s shipping problems exemplify the complexity and often overlapping nature of the supply chain issue. Since the pandemic, domestic trucking has seen its own “perfect storm” of issues that has led to a historic shortage of drivers.
Bernardes cited one study that estimates the United States is facing a shortage of 60,000 to 80,000 truck drivers across the country.
“Those drivers, which are normally older drivers, more experienced drivers, they had to stop because of the pandemic, and then they decided to go on early retirement,” he said.
The pandemic also led more drivers to leave the industry altogether, and not enough new drivers are picking up the work.
“One issue is that, of course it doesn’t happen overnight, there’s a process for this replacement. But there’s also a generational gap here. Younger folks don’t (want to be) drivers,” Bernardes said.
The country’s ongoing labor shortage is a separate issue from the supply chain but, as Bernardes lays out, one that is inevitably entangled in the chain’s complexities.
“When people aren’t wanting to work, you have people in these farms, even local … these farmers need help, too. If they’re not getting the things that they need, whether it’s fertilizer that wasn’t able to get shipped, it’s just this ripple effect,” said Mal’s Fresh Produce owner Mallory Moholt.
Moholt’s business is exclusively with area farmers, but buying and selling locally doesn’t keep that ripple effect from impacting her bottom line.
“I’ve seen it actually this whole year, which obviously made my prices have to go up,” she said.
Looking to local solutions
It does, however, offer her more flexibility.
“I’m able to have more options, like people that are local are more able to serve you rather than someone else. You don’t have to really think about the shipping prices, you don’t have to really think about the accessibility of things just because I’m buying local, and there’s a lot of things here that are being grown,” Moholt said.
As much as some would like, we can’t grow and produce everything we want or need locally. The complex, international supply chain is still necessary for our modern lives, but more local production may just be the solution to avoid a repeat of our current supply chain headache in the future.
“We discovered maybe we need to hedge a little more so that we’re not having everything concentrated in one region. It might be that we need some of that done locally or around where we live. We will continue having some of those items coming from abroad, but we must have some capacity ourselves,” Bernardes said.