Supply Chain Outlook for 2022

 

Over much of the last year, you couldn’t watch the news without hearing about product delays and supply chain issues. This has been especially true over the last several weeks, as we near the peak of the holiday season. Much of the ongoing supply chain issues have resulted from events that occurred in 2021, such as:

  • Emerging COVID variants that impacted the workforce
  • The ice storm in Texas, which caused production delays across the country
  • Hurricane Ida, which led to a fuel shortage across the country
  • The ongoing truck driver labor shortage, which led to delivery delays

Now that we’re nearing the end of the year, many of us are left wondering: Will these issues continue into 2022?

What Is the Supply Chain Outlook for 2022?

Unfortunately, experts believe that there’s no end in sight, for the time being at least. A recent article from MarketWatch explains:

“Nine of 10 retailers anticipate revenue will continue to be impacted by supply-chain issues for at least the next six months. Fueling long delays and shortages are issues related to shipping containers, followed by long supply chains and truck-driver shortages. In Europe, the impact of Brexit was also a significant factor.”

However, there is reason to hope that by the second half of the year, things will begin to stabilize. A recent report from Euler Hermes cites three factors that will drive the normalization of trade and supply by the middle of 2022:

Peaked Consumer Demand

While consumers continue to buy goods at high levels, demand has peaked and will begin to normalize in the coming months. The report explains, “The replacement cycle of durable goods shows that the peak of supply-chain bottlenecks should have passed.”

Stabilized Inventory Supply Levels

The urgency to restock manufacturer inventories peaked over the past few months and supply levels have already begun to return to what they were prior to the pandemic, across different industries.

Increased Shipping Capacity

Finally, shipping capacity is expected to increase in the new year, leading to less congestion around the world. “The rapidly growing new transportation capacity orders should turn operational towards the end of 2022, which should significantly ease shipping bottlenecks,” the report goes on to explain.

 

While the hope is that these predictions are true, we’ll have to wait and see how it all plays out in 2022. Of course, we’ll continue to provide updates here as they become available.