Shortages and supply crises: what is the truth?

It is estimated that they exist in Spain more than 50,000 million euros of saved savings by individuals as a result of lower spending during the pandemic in travel or catering. That fact and the conviction that current demand levels will be maintained has promoted purchasing policies from suppliers of companies with expectations to take advantage of a sweet economic moment, a situation of consumer euphoria in the final stretch of the year. Worldwide, the demand is historic.

That expectation is in the background of tensions that have actually occurred in recent months in the international logistics chain and in Asia especially. As a consequence of that high demand, energy costs fired and international transport difficulties, in some sectors alarm lights have been lit. The International freight prices have risen above 300% on average, but oil has also become more than 100% more expensive this year and other costs such as gas, electricity, soybeans, wheat, corn, etc. have become between 30% and 40%.

The general director of the association of internationalized companies Amec, Joan Tristany, believes that “the impression from the industry is that a lot of work is being done. There are many orders. There is a large increase in demand to unusual levels and therefore there are difficulties in responding to this much higher demand than usual“But it doesn’t mean that store shelves are empty.” There is a shortage of cardboard, silicones, glass, steel & mldr; But companies, despite facing great problems, are finding solutions, as alternative suppliers, “he adds.

“As with the pandemic, this will be a crisis with multidimensional effects that affects very diverse sectors. It is not of such depth, but it moves in uncertainty with consequences that we will see in the coming months. There will be a peak at Christmas, due to the incidence of consumption, in which the logistics networks are put in tension, but until the rhythm recovers, the forecast is that it occupies until the middle of next year. During this period there will be very different risk scenarios for companies “, explains the director of crisis and risks of the consulting firm LLYC. Ivan Pino, informs Sara Ledo.

The general manager of Port de Barcelona, Jose Alberto Carbonell, ensures that the port of Barcelona does not register signs of possible massive shortages. “Currently, activity is high, almost similar in volume of traffic managed to those that existed before the pandemic in 2019. Information on shortages5 may affect concrete products, but in terms of freight traffic congestion, no bottleneck is perceived in the port of Barcelona, ​​such as those that are registered, for example, in the port of Los Angeles. ”

For the general director in Spain of the multinational drug distribution company Alliance Hearlthcare, Javier Casas, there are no alarming drug shortage symptoms. “We do not perceive a special logistical tension, we serve more than 30,000 different references to pharmacies and we do not have any internal alert in the company due to shortages or international transport failures. In the last meeting no type of supply alert was made. I believe that excessive scaremongering is being created, “says Casas.

In the opinion of Ricardo Goizueta, head of the digital and electronic commerce area of ​​El Corte Inglés, “there will be no shortage problems, since the commercial sector has prepared for a long time and with great care the Black Friday, Cyber ​​Monday and Christmas campaigns. And above all with many months in advance. “Goizueta acknowledges that there has been” a lot of media noise “and that as a consequence there has been a certain advance in purchases by consumers.

The distributors of building materials They recognize that they are already impacting the price rises of raw materials in their establishments. Sources from the National Association of Distributors of Ceramics and Construction Material (Andimac) acknowledge that the strong increases in recent weeks are beginning to moderate and that they are hopeful that the situation will normalize in the first quarter of 2022.

“The rise in prices has been generalized but where it has had the most impact is in plastics and petroleum derivatives, with accumulated increases in recent days above 15%; in steel, with increases that have come between the two great ‘waves’ with rises up to 35% (55% in a year, according to the National Construction Confederation); and the brass where we can speak of rises of between 7% -8% “.

Professionals in the construction sector have perceived that there has been a real crisis in the supply of raw materials, with a palpable lack of sufficient material to undertake new works. To the decisive lack of wood and steel, for example, was added the dramatic rising cost of energy. As a consequence, there was a pernicious cycle that affected materials that until then had not suffered from increases, such as cement or ceramics. Also in sanitary ware, increases are expected.

Stockouts are still a taboo word in the sector and professionals generally agree that there are no empty stores. Yes, there was a certain situation of lack of materials at the beginning of 2021 and even before summer, but as of September the situation has been normalizing, but suppliers and companies have taken the opportunity to recharge stocks, which has transformed a situation normality in specific problems in high demand products.

What is being noticed is the lack of certain electronic products for the lack of microchips. This is the case with thermostats, for example. In the case of a specific manufacturer that has stopped manufacturing, the price went from two to 60 euros, they say in Andimac sources. Medium gas factories in China they are exacerbating the problems. The lack of supply in some products (chips, brass & mldr;) currently causes purchases per customer to be limited.

As a consequence of this situation, Andimac recognizes that uploads are being passed on to the end customer, both up and down, depending on the availability of the products and their demand. The distribution chains of construction materials ensure that they do not have data that works are being paralyzed, although they delay start-ups until they have enough material. The prices of the works may vary depending on these ups and downs and it is not possible, they assure, to offer closed prices for six months. “An associate gave us the example of a large supplier that two weeks ago announced an 8% increase in a budget, and just two weeks later it rectified it with a 13% increase. It is very difficult to plan in this context.” , they explain in Andimac.

For the president of the Spanish Association of Toy Manufacturers, Jose Antonio Pastor, there is no threat of shortage of toys for this Christmas and Kings. In his opinion, there may be, as every year, specific products that run out and there may be last-minute logistical difficulties: “There will be no supply problems, there may be problems of breakage of escos in those cases of fashion products and that we cannot replace at last minute, “he explains.

The reason is that christmas campaign accounts for 70% of the sector’s sales throughout the year. The week of Kings comes to suppose 10% of the whole year reason why the production begins many months before. 40% of the turnover of Spanish toy makers is for export. The sector has a turnover of 1,600 million euros per year. Regarding the cost increases, Pastor admits that they have been having an impact throughout the year and that they have particularly affected freight rates. “Let’s see. If costs continue to rise by 2022 we may talk about something different and have to face price increases, but currently the competition is strong and exports have increased by around 18%, so if a market it does not allow price increases, there is always the search for other markets for those specific products “. On the transfer of toy sales to Black Friday The president of the Spanish manufacturers is skeptical: “We see this year that purchases have been requested to be advanced due to the proliferation of messages that are launched about transport and logistics difficulties, but until now it is not expected that there will be advance purchases” .

In the textile sector, the supply difficulties of the large Spanish multinationals exist but the management teams have made decisions for months to minimize the effects of risk of delays in deliveries. Inditex, Mango or Desigual they maintain their main factories in relative proximity, mainly the Iberian Peninsula, Morocco, Turkey or Eastern countries. In this sense, they rule out shortages but in some cases it can affect the launch of new collections, although the problems are now less than before summer. The increase in the price of freight does affect. A garment that had a unit shipping cost of 10 cents faces a cost of one euro. For this reason, ultra-low-price firms, such as Primark, have suffered more than others.

Reference-www.elperiodico.com

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