‘A cold winter dead ahead’: Economists warn global supply chain problems will worsen

CHARLOTTE — President Joe Biden will meet with senior officials and stakeholders on Wednesday to discuss ways to address global supply chain problems, and what comes out of that meeting could have major impacts on how you shop.

Consumers have seen the shortages those supply chain disruptions are causing at stores -- impacting everything from what you buy at the grocery store to what you can order at your favorite restaurants -- and economists warn the problem is going to get worse before it gets better.

From the grocery store to the gas station, the supply chain crisis is jacking up prices and slowing down economic recovery.

“It means not only higher prices, but it will take you longer to get deliveries,” said Megan Greene, Global Economist at Harvard Kennedy School. “We’re seeing as we reopen the economy and demand surged, firms haven’t been able to keep up.”

Economists blame COVID.

“It all goes back to the pandemic,” said Mark Zandi, Chief Economist with Moody’s Analytics. “The pandemic has disrupted all markets.”

But supply and demand are only part of the issue.

“It’s partly because of factory shutdowns in China driven by Delta variant outbreaks, or now emissions targets requiring factories to shut down,” Green said. “On the U.S. side, the issue is much more with labor, so a shortage of longshore workers and truckers to actually get stuff off shipping containers and into stores, onto shelves.”

Dozens of cargo ships are idling at two of the biggest ports in the United States.

“There are more ships than there are parking spots,” said Coast Guard Commander Stephen Bor. “We are effectively operating a cell phone waiting lot in the Pacific Ocean.”

The President will seek solutions when he meets with the heads of those ports and their workers’ union, along with some large private sector companies.

The White House said it has helped broker an agreement for the Port of Los Angeles to become a 24-hour, seven-days-a-week operation in an effort to relieve supply chain bottlenecks and move the stranded container ships that are driving prices higher for U.S. consumers.

Ports in Los Angeles and Long Beach, California, account for 40% of all shipping containers entering the U.S. The supply chain problem is tightly linked with the broader challenge of inflation confronting Biden.

Moody’s Analytics warns there are dark clouds ahead, though, in part because there’s no global effort to ensure the smooth operation of the worldwide logistics and transportation network.

That could mean a bumpy road ahead for at least the next few months.

“We’ve got a cold winter dead ahead, and it’s going to be financially painful for people,” Zandi said.

The supply chain issues are affecting more than just big businesses -- some smaller operations are also having to make changes, including Mac’s Speed Shop in South End.

The restaurant is facing record-level food costs and has temporarily dropped some items from the menu, like green bean casserole, stuffed jalapenos, creamed corn and beef rib.

Mac’s has also had to raise prices on some menu items, like brisket and chicken wings.

The Associated Press contributed to this article.

(WATCH BELOW: Buyers should prepare for rising grocery prices)

Buyers should prepare for rising grocery prices

©2021 Cox Media Group