why when the economy activates we have huge supply problems

The coronavirus crisis has originated, both from its starting point to the present, a series of problems in the supply of certain goods.

If we are at the starting point, in March 2020, the increase in coronavirus cases forced governments to undertake mobility restrictions. Toilet paper became a coveted item at the end of that month when many cities and states across the country issued shelter-in-place requests in response to the coronavirus pandemic, prompting people to purchase large amounts of household items.

We got to see empty shelves due to high demand and not to a problem that affected the supply chain since the basic goods did not suffer any supply problems.

Most manufacturing facilities are located in remote areas of large cities, with low population density, which means that employees are less likely to be affected by the virus, they will miss work and there will be delays in production.

The shortage came for a notable alteration in demand in the short term the result of a change in consumer expectations in which a supply need prevailed. You had to prepare for an uncertain quarantine.

Screenshot 20211027 010508 Twitter

With mobility restrictions, logistics was affected at first, but managed to adapt quickly to the new reality and respond even to the boom in demand via online commerce.

The way out of the crisis and supply problems

During the exit phase of the crisis with the increase in vaccination rates, the situation was that thousands of empty containers had been stranded in Europe and the United States because, in the first half of 2020, shipping lines canceled hundreds of trips due to blockades that impacted world trade.

When Western demand for products made in Asia recovered in the second half of the year, competition among shippers for available containers led to the shipping costs of ocean freight will skyrocket.

Screenshot 20211027 022143 Chrome

If we add to this problems on the part of suppliers such as outbreaks of coronavirus in ports, accidents in plants and adverse weather conditions, it has ended up generating bottlenecks in the transport sector and has caused a shortage of specific products for the manufacturing industry such as they are plastic, metals, wood and semiconductors. This imbalance between supply and demand has led us to a unprecedented increase in delivery times.

We can put the case of the semiconductor industry which has recently seen a sharp increase in demand. At the onset of the pandemic, while semiconductor sales to the automotive industry collapsed globally during the second quarter of 2020, this shortfall was more than offset by strong demand for computer and electronic equipment due to the shift to remote work. and distance learning.

Once the global recovery took hold, semiconductor production has not been sufficient to meet increased demand from the automotive industry. Today we have problems where producers of manufactured goods in the euro area had difficulty sourcing semiconductors.

Brexit slaps

And we continue with the problems in supplies … but, although there is a background linked to the supply problems of the bottlenecks in global supply, it is linked to the Brexit which is jamming customs.

Specifically we see that spirits are out of stock from various well-known brands. Absolut, Beefeater, Jameson or Seagram’s are the most missing. Gin is in short supply.

All this has coincided with the reopening of bars, pubs and nightclubs with practically the limitation of all the restrictions that affected these businesses.

Brexit has been accompanied by more regulations and additional tariffs that are torpedoing free trade. Hence, they are considering a ‘complicated Christmas. Spanish distributors point out that the alcohol shortage in the UK will last longer, until February.

Source: El Blog Salmón by feeds.weblogssl.com.

*The article has been translated based on the content of El Blog Salmón by feeds.weblogssl.com. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!

*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.

*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!