The Friday Report: November 26, 2021

Kitchen and Laundry Appliances in Short Supply 

Need a new appliance for your kitchen or laundry room?  You may have to wait.  In addition to a shipping and supply chain backlog, there is also a manufacturing delay.  For some high-end brands, the delay is anywhere from 10 to 14 months. 

Facing limitations on raw materials, some manufacturers are strategically favoring production of higher quality goods over quantity.  This may result in fewer lower end appliances being produced.  Reduced supply may mean higher prices for those goods. 

How did this all start?  As COVID-19 raged in 2020 and more Americans stayed or worked from home, consumers replaced more appliances due to more frequent or overuse.  During this time, the housing market exploded.  Many people migrated to other states or began home construction or renovation projects.  The manufacturing workforce was impacted, as companies suspended operations and production around the world.   

The shortage of appliances is leading to slowdowns in the completion of single family and multi family home, apartments, and condominiums. 

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Why This Year’s Holiday Season Is Different 

The holiday gift giving, and travel season is upon us.  As consumers have already witnessed, shutting down manufacturing and supply chain logistics workforces in 2020 had a significant, and lasting impact.  Just how temporary this disruption is remains to be seen.  From companies that deal with raw materials to manufacturers, warehouses, distribution and fulfillment centers and transportation and logistics providers, a wave of disruption coincided with a major uptick in consumer purchasing.  This wave has upended the supply chain, not only of goods but also of services. 

Take, for example, vehicles.  Auto makers have been faced with labor shutdowns due to COVID-19 as well as with the impact of semiconductor shortages.  Vehicles languish in production lots, waiting for parts.  The shortage of new vehicles has led to increased pricing of used cars, up by $6,500 this year and the increased need by consumers for car repair services.  The same is true for the electronics and appliance industries.  This also impacts the car rental and airline industry, in fact, travel in general. 

Shipping delays and near record high cotton pricing have driven out-of-stocks in the apparel industry, the highest of any consumer category. 

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Pharma Supply Chain Challenges and Counterfeit Drug Products 

Currently, the FDA has reported a national shortage of 109 drugs.  Three of the top five drugs in short supply are used for chemotherapy, antibiotics, and heart conditions.  As consumers began buying more goods online during the COVID-19 pandemic, they also expanded their ecommerce activity to include online pharmacy purchases. 

Although consumers may find ways to keep the cost of medications under control, it can also open the door to fraud, substandard and counterfeit drug products.  In a 2017 study conducted by the U.S. National Association Boards of Pharmacy (NABP), 96% of websites selling prescription drug products were found to be acting illegally.  According to the World Health Organization, more than half of the medications purchased on illegal websites which concealed their address were found to be counterfeit. 

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