Supply Chain Costs for The Holidays

Many people are scrambling to buy gifts for loved ones this holiday season as a backlog of shipping containers at the ports threatens delivery before end of December deadlines. Although most people worry they won’t receive their items in time, many others are also concerned about the possibility of high prices for those items.

Costs Of Goods

Currently, vehicle and home sale prices are soaring to record levels. Financial experts are expecting that consumers will face more financial costs as a result of the supply chain breakdown. As the demand rises with the continued increase in demand, manufacturers are likely to raise prices to wholesalers to take advantage. This increase in cost often trickles directly down into the wallet of the individual consumer as everyone races to take their cut of the larger profit margins.

Competition For Goods

As the shipping and transfer of goods continue to meet a backlog, supply remains low, and demand continues to rise. As demand rises, competition among product manufacturers grows. This provides an opportunity for smaller companies to take a bigger stake in the market share. However, larger corporations have moved to reducing inventory on lower profitability items; only stocking shelves with the items that are easy to obtain and have the highest profit margins. Again, the added cost will be loaded onto the consumer.

Seasonal Surge May Feed Inflation

Economists are concerned that the current backlog in shipping and receiving of goods will further feed inflation. As industry leaders work to stabilize the economy and slow the rate of inflation, the continued surge in demand and low supply that is expected through the end of the year will only serve to keep the inflation train on its tracks for the foreseeable first quarter of 2022.

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