What Is Causing The Supply Chain Chaos?

America seems to be running out of everything. Businesses across the nation have been stretched with the ongoing supply-chain crunches across almost every industry. Companies are feeling the pinch from supply chain bottlenecks and labor shortages.

In an interview with Yahoo Finance Live, one such company, Atlanta-based Veritiv, which sells packing an19d paper products, sees these challenges being “driven by three key variables”.


1: Unprecedented demand

The supply-chain crisis is the result of COVID-19 disruptions paired with a boom in demand. Global supply-chains did not recover from 2020’s coronavirus which wreaked havoc on logistics systems.  The “unprecedented demand” is not only a result of pent-up demand after millions of Americans spent many months in quarantine during the COVID-19 pandemic but also the e-commerce boom, he added.

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2: Raw material shortage

Meanwhile, the surge in demand is matched with a shortage in raw materials. Other firms have also reported supply chain challenges for getting required goods due to congestion at U.S. ports. Many expect the flow of goods to continue to be slow and backlogged into next year.


3: Lack on talent

Shortages of workers, equipment, and space have only made the issue worse. “The most significant is the labor shortage.” With the workforce millions of people short and more exiting in 2021, there is a huge exodus of talent which is being felt across industries going into 2022.

Meanwhile, inflation in America reached a 30-year high in October: The Consumer Price Index (CPI) increased by 6.2% in October as compared to the previous year, the largest 12-month increase since November 1990.


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