US covered a large-scale deficit of goods – from zipper and glass to bulldozers and bourbon, reports Reuters. The lack of products and raw materials primarily affected the supply industries from other continents, as the cargo shipping is experiencing a crisis. Along with the commodity deficit in the American market there is a sharp increase in prices, and the Federal Reserve System (Fed) fears further growth inflation.
Before the pandemic, the purchase of the necessary parts was made only by one click on the site and assumed expectation within a few days, at most – weeks. But the spread of COVID-19 led to major failures in supply chains and the world covered the lack of basic goods. Metal deficiency, plastic, wood and even bottles for alcoholic beverages in the United States became the norm. Manufacturers are forced to constantly raise product prices, which provokes the risk of sustainable inflation in the country.
Caterpillar’s largest construction and mining equipment supplier in July said that in the third quarter its profits will decrease due to the increase in prices for hard-to-reach components, such as plastic resin and semiconductors. And Brown-Forman, which owns large brands with Jack Daniel’s and Woodford alcoholic beverages, reported the shortage of “key packaging materials, first of all the glass.” Against the background of the global deficit, the participants of some industries have already begun to build new plants. This was done, for example, manufacturers of semiconductors to satisfy the growing demand for microcircuits for cars and electronics.
The main problem is that the supply channels are overloaded. The demand for containers, ships and trucks are very high against the background of restoring the economy, when thousands of companies simultaneously needed means of transporting their products. The President of the Plastics Manufacturer United Solutions David Riley appreciated last year’s rise in prices for polymers 100 percent and called him the greatest difficulty of his business at the moment. Previously, Reilly asked their purchases to seek cheaper plastic in foreign markets, including Chinese if prices in the country were too high. But now the shipping cost by the sea has grown so much that any price advantage has lost importance. In the summer, new problems arose in the supply chains in the USA. A series of devastating hurricanes caused failures in the work of oil refineries. Accidents in factories are even more threatening the supply of plastics and other major materials.
The high cost of delivery and deficit, along with the increase in wages due to the lack of labor, caused a record price increase in the United States. Inflation reached a maximum for 13 years.