Experts on global distribution networks have some grim news for consumers. All the problems should have been straightened out by now. Instead, they got worse. Russia’s invasion of Ukraine really mucked things up. The butterfly effect set off a reaction up and down the whole supply chain.
Consumers expect more shortages
The light at the end of the shortage crisis tunnel turned out to be the headlamp of an oncoming train, driven by Vladimir Putin. Russia’ invasion of Ukraine was only the first domino to fall on average consumers.
That “cut off exports from Ukraine and put Russian businesses under sanction.” It’s not just bad news for soviet billionaires because it also “set off a series of new supply-chain bottlenecks.”
Contributing to the perfect storm bearing down hard on consumers is the surge in Covid cases in China. It led to “temporary lockdowns in parts of the country.”
Folks are going to take the phrase “made in America” a lot more seriously from now on. That is, if American manufacturers ever get the raw materials they need to make things here.
The experts insist nobody expected things to be back to normal by now. “Even before these latest crises, shortages of some parts and raw materials had been expected to continue into 2023.” Heavy industry was hopeful that the end was near and things would begin to ease for consumers.
“In early February, three weeks before Russia invaded Ukraine, GM forecast that it would be able to build 25% to 30% more cars this year than last year.” You can chuck that prediction right out the window, now.
Where’s the chips?
They were seeing such improvement they expected a strong end to the year. “we’re going to be really starting to see the semiconductor constraints diminish,” GM CEO Mary Barra told investors. She spoke too soon.
GM “just announced a two-week shutdown starting next week at its plant in Fort Wayne, Indiana, that builds Chevrolet Silverado and GMC Sierra pickup trucks, because of the lack of computer chips.” Consumers are about to see shortages everywhere.
Ukraine and Russia “don’t produce computer chips used by global automakers.” Instead, “Ukraine is the world’s leading source of neon, a gas needed for the lasers used in the chip-making process.” No neon, no chips.
Consumers “expected the semiconductor shortage to continue. But nobody predicted Ukraine,” Bernard Swiecki, director of research at the Center for Automotive Research explains.
Everything is up in the air, not just computer chips. “Supply chain disruption is a major factor driving prices higher around the globe, as demand for goods such as cars, oil and computer chips have outpaced supplies. And predicting when those disruptions will end is nearly impossible due to the uncertain nature of the war in Ukraine.”
The longer that continues, the experts say, the more problems it’s likely to cause for consumers.
