Forty-four percent of 800 U.S. small businesses surveyed by research firm Vistage Worldwide reported running short of supplies or experiencing other disruptions in their supply chains.
Among examples cited by the Wall Street Journal:
- a Colorado manufacturer is altering its manufacturing process to accommodate a lack of plastic;
- an Oklahoma restaurant paid $200 instead of the usual $40 for a case of gloves;
- a Michigan clothing wholesaler is sitting on hundreds of hoodies that arrived after cold-weather season ended.
The turmoil also was reflected in a U.S. Census Bureau study earlier this month that found breakdowns in supply chains for construction, manufacturing, and wholesale trade.
A swirl of complications has caused the glitches, including COVID infections among suppliers’ workers; business closures; a shortage of shipping containers; backlogs at ports; storms that shut down air, road, and rail transport; and a blockage in the Suez Canal.
“If a steel supplier has even a little supply, they will raise prices, knowing it will be difficult for them to replenish their stock,” CEO Matt Erfman of Dakotaland Manufacturing, told the WSJ. “It’s almost a straight-up trajectory.”
Suppliers recently quoted Erfman $1.10 a pound for tubing that he paid 45 cents for last summer, he said.
The cost of lumber to build crates and pallets for shipping goods has risen between 50 and 100 percent, according to Heather Chandler, CEO of SealStrip Corp., which makes packaging products.
“We buy from billion-dollar companies and sell to billion-dollar companies,” she said, which makes it hard for a small business to negotiate discounts or price increases on either end.
Recently, a SealStrip shipment took five days to reach a customer a two-hour drive away, Chandler complained.
“Things are sitting in freight depots because they are short of staff,” she said.
Some small companies are paying more to stock up on supplies; others are paying premium prices to ship by FedEx or other rapid carriers that can handle the tasks.
And, today, General Electric CEO Larry Culp told CNBC that they, too, are suffering supply chain issues and would raise prices to offset cost pressures in materials such as electronics, resins, and steel.
CNBC also reported that 3M said supply chain disruptions from the COVID war and winter storms drove up the price of raw materials.
TREND FORECAST: We note this to continue to illustrate the reality of rising inflation. The higher inflation goes, the higher interest rates will rise… and the higher rates rise, the deeper the equity markets and economies will fall. As we continue to note, for another perspective of how high inflation has risen, we suggest John Williams’ www.shadowstats.com.
TREND FORECAST: There’s the media world, the political world, and the real world. In the real world, inflation is on the rise, as we have detailed, and it will continue to move higher.
Procter & Gamble, one of the biggest makers of consumer products from Gillette razors and Tide detergent to diapers and tampons, will raise prices on baby products, feminine hygiene items, and adult diapers by 5 to 9 percent this September, the company has announced.
The price hikes are being forced by higher costs for pulp, resin, and other raw materials, as well as higher fees for shipping goods, P&G said.
“This is one of the bigger increases in commodity costs that we’ve seen over the time I’ve been involved,” commented Jon Moeller, a 33-year company veteran, told the Wall Street Journal.
The new prices likely presage similar boosts in other product lines.
Competitor Kimberly-Clark announced a similar move last month, raising prices this June by similar percentages on baby and adult care products and Scott bathroom tissue.
In February, Hormel Foods jacked prices on turkey products after grain prices shot up; J.M. Smucker Co. is charging more for Jif peanut butter due to higher shipping and materials costs.
The Consumer Price Index rose 2.6 percent in the 12 months preceding 31 March, the largest gain since August 2018, the U.S. Labor Department reported earlier this month.