boxes on a conveyor belt
Thursday, July 15, 2021
Tom Snee

If you want your holiday gifts to arrive in time to be under the tree on Christmas morning, a logistics and supply chain expert at the University of Iowa’s Tippie College of Business suggests you buy them now.

“There’s a perfect storm in supply chains that will cause severe shipping shortages for holiday gifts,” says Jennifer Blackhurst, professor of business analytics. “The problems are severe, they will affect all products, and will probably not be fixed by Christmas.”

She says the delays are a result of too much product trying to move through a supply chain still compromised by the COVID-19 pandemic. For products to be on store shelves in time for holiday shopping season, they need to be in transport now. But Blackhurst says they’re not moving or are moving very slowly.

The primary problem is a lack of containers to move products across the ocean on ships and then around the United States on trucks and trains, which leads to a bidding war for the containers that is driving up the price of the products they carry.

For companies that can’t get containers, she says their products just sit and wait their turn.

Slowdowns are exacerbated further by a lack of train and truck operators in the United States and by occasional port shutdowns. She says the port of Shenzhen, China—one of the country’s largest—was recently closed because of a new outbreak of COVID-19, and then reopened at reduced capacity.

Blackhurst says that many U.S. companies are now looking to return some level of manufacturing to North America to reduce the likelihood of future strain on their supply chain, but it will take years to put in place. In the meantime, she doesn’t see supply chains to be fully functioning again until mid-2022 at the earliest. For the foreseeable future we can expect occasional shortages of products and wild swings in prices like we saw in the lumber market.

“So think about Christmas in July this year,” she says.

 

CONTACT: Tom Snee, tom-snee@uiowa.edu; 319-541-8434; 319-384-0010