Almost two years of disrupted global supply chains, it is reasonable to blame anything & everything on port congestion. With the IMF and WTO both saying they expect supply chain issues to continue for several months. Everything from poor Company earnings to absent Christmas presents can be put down to supply chain disruptions.
But according to some analysts, the problem of the “Everything Shortage” might not be the supply chain disruptions themselves but everyone anticipating them.
As the talk of a “Supply Chain Crisis” ramps up, Companies are over ordering and placing orders earlier than usual to make sure goods keep flowing out the door, which causes further disruptions, Eric Oak, analyst for S&P Global Market Intelligence.
Early over ordering creates a whiplash effect, he says, as one company increases its order volumes, or orders sooner than expected, making its suppliers do the same. Suppliers of suppliers will all increase their own volumes, creating a trickle-down effect of more disruption.
Companies that didn’t plan ahead might be left with goods on cargo ships out in the harbour waiting to unload.