Supply Chain Challenges Are Everywhere
Randy Wolken, President & CEO

Are you feeling the pain from a disrupted supply chain? I bet you are. Most of our members are, and it is likely going to get worse – and stay that way for an extended period. While the pandemic has aggravated our supply chains, many of the issues were present before the onset of COVID-19.

Severe labor shortages are one of the main reasons for such disruptions. By some accounts, we lack over 100,000 truck drivers in the United States alone. This is a daunting challenge to solve. Additionally, already disrupted schedules have extended delays from days or weeks to months. It is nearly impossible to remove these existing delays already built into the supply chain delivery system. Because of delays, it has caused a new problem: a lack of carriages for hauling on both railways and trucks. This need takes significant capital investment outlays and will not happen quickly. Also, we have outdated ports due to a lack of massive infrastructure investments and globally expanding manufacturing and consumer bases. These complex and compounding issues contribute to a considerable challenge that will not be going away quickly – if ever. As we can all see now, it’s time that we all begin to adjust and seek a better future.

How bad is it? The IMF downgraded its 2021 US growth forecast by a whole percentage point, the most for any of the G7 economies. The IMF directly cited supply chain disruptions and weakening consumption, which supply chain bottlenecks have partially driven.1

One thing we now know for sure: China is increasingly a more significant national security threat and an often unreliable economic partner. Maybe this will change, but most do not believe so. Each day brings new evidence that their actions are not serving the US and global interests. I hear this from MACNY members and our Congressional representatives. If you have an extended supply chain involving China, you should be considering your options.

Shorter and less complicated supply chains based in countries that can be reliable long-term partners is the direction many of our members are taking. For now, stocking up on critical parts and components that lessen the operational and financial impacts will work. However, many I talk to indicate that this cannot and will not be their long-term answer. Reshoring and nearshoring are part of the answer, as is developing sourcing alternatives for critical components here in the US.

MACNY can and will be your partner as you navigate through the supply chain challenges you face. This week we participated in Congressman Katko’s supply chain discussion and press conference. We also held our first of many webinars we plan to host in the months ahead. If you have questions or needs, please let someone on our team know, or email [email protected]. As always, our team is prepared to assist you.