Supply chain crisis could last until 2022 0:56
New York (CNN Business) -
Forget "The Grinch": It looks like supply chain stagnations may ruin Christmas this year.
But will these problems be solved in early 2022?
Why is there a crisis in the global supply chain and how could it affect your daily life?
Several retailers, manufacturers and economists have warned that global supply chain constraints will not only lead to fewer discounts during the holiday season, but will also result in a potential shortage of products on store shelves.
However, some executives and market experts think that the worst could be over in a few months.
JPMorgan Chase CEO Jamie Dimon said last week during an earnings call with reporters that supply chain issues will be a distant memory by this time next year.
"There's a very good chance that a year from now we won't be talking about supply chains at all," Dimon said.
Others note that major transport companies and operators are also taking steps to alleviate the problems.
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80,000 truck drivers wanted to help fix supply chain
Jack Janasiewicz, portfolio strategist at Natixis Investment Managers, noted in an email that giants such as Toyota, Samsung and Intel plan to increase production during the final months of the year due to increased availability of key components.
Major ports like Long Beach and Los Angeles are now also looking to keep their operations open 24/7 to address supply chain bottlenecks.
"Stagnation issues may have passed the peak, with the potential for more fluidity and volume on the horizon," Citi analyst Christian Wetherbee said in a report last week.
"This is evident in the first signs of decongestion in the ports of the United States and Asia."
Meanwhile, executives from Walmart, Target, FedEx and UPS met with President Joe Biden to try to find solutions to problems affecting retailers and shippers.
"The global supply chain has been noticeably stretched," Jefferies analysts said in a recent report.
But they added that "we may already be witnessing the worst" and that "the impact is likely to lessen" by the first half of 2022.
Consumer Impact: Supply Chain Crisis 2:05
Problems may persist longer than some companies expect
But some companies and strategists may be overly optimistic.
Profits could be affected due to shipping delays.
There are also legitimate concerns that problems will lead to higher prices for the foreseeable future and that some consumers may delay purchasing non-essential items as a result.
Also, the problem is not just about shipping goods from abroad to the United States.
Domestic truckers may not have enough capacity to transport all the products that need to go from ports to warehouses and stores.
What are the main products affected by the crisis in the supply chain?
For example, European dairy and plant food conglomerate Danone warned of higher prices on Tuesday in a sales call with analysts.
The main culprit: truck-related problems.
"Part of the inflation we're seeing in the [second half] of this year is due to tensions in transportation. Let's be extremely clear because we see average truck rates in the United States at a record high," said Juergen Esser, director of finance, technology and data for Danone.
With that in mind, Esser said Danone could face higher transportation costs of 7% to 9%.
That will end up hurting investors with lower margins or hurting consumers, who may find themselves paying more for yogurt at the grocery store.
High food prices due to supply chain crisis 3:04
