Stuff on Shelves – Texas Border Business


After some extraordinarily difficult times, the supply chain situation in the United States is now much improved. Image for illustration purposes
After some extraordinarily difficult times, the supply chain situation in the United States is now much improved. Image for illustration purposes

Texas Border Business

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Dr. M. Ray Perryman President and Chief Executive Officer of The Perryman Group

Prior to the COVID-19 pandemic, the relatively smooth functioning of the supply chain was something most people rarely thought of and took for granted. In fact, few could even tell you what the phrase meant. The global health crisis, which shut down large segments of the economy for an extended period, severely disrupted the vast array of resources, firms, workers, technology, and transportation that forms the complex web of activity essential to the creation and distribution of products. The Russian invasion of Ukraine and various other events (including a fire in a massive South Korean chip plant) only made things worse. 

As the saga unfolded, a domino effect ensued, with shortfalls in one aspect of the supply chain (such as production of semiconductors/chips) causing stoppages in others (manufacturing of cars, refrigerators, and other complex products). When production came back online, there was then overcrowding in the logistics system, including cargo ships and ports. We also faced labor issues, both due to shutdowns and ongoing shortages. Store shelves and stores were thus often sparsely filled, with various products completely unavailable. The snarls which developed have taken years to work through; knitting the web back together was not a simple task.

After some extraordinarily difficult times, the supply chain situation in the United States is now much improved. We’ve largely overcome the issues associated with COVID-19 and the other displacements, and statistics are indicating that the worst of the supply chain problems are behind us.

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At this point, about 92% of all goods are regularly stocked in adequate quantities at grocery stores, pharmacies, and other outlets. Ports are also running at 100% capacity and have set cargo volume records in each of the past two years. Shipping costs are back to near pre-pandemic levels after spiking in 2021 as the world opened up and a flood of goods needed to get to market. 

A healthier supply chain helps in the fight against inflation, taking some pressure off prices as goods become more readily available and supply and demand come into a more normal alignment. It also helps improve the efficiency and productivity of the economy as well as prospects for long-term growth. 

The supply chain meltdown has proven to be a very tough challenge that took a lot of effort to overcome. More than three years since the onset of the pandemic, substantial and substantive progress is finally evident. There are still lingering concerns in some segments which may persist for a while, and a labor strike or similar shock could set back progress in this critical, yet fragile element of the global economy. Nonetheless, things are vastly better, which is a positive development on a grand scale. Stay safe! 

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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 3,000 clients over the past four decades.

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