The most notable supply chain bottlenecks of 2021

·4 min read

Supply chain issues seemed inescapable in the year 2021. From the Ever Given ship that blocked the Suez Canal and cost billions, to the snarling congestions at ports around the world, supply chain bottlenecks made headlines throughout the year.

Many factors contributed to the global supply chain strains, including production cutbacks prompted by the COVID-19 pandemic, increased demand for goods, and labour shortages that exacerbated slowdowns at ports and in the transportation sector. Just about every retailer and major company in the world has had to deal with supply issues in some form this year. 

Here are a few examples of shortages that we saw emerge through 2021.

Toilet paper

Costco, one of the largest retailers in North America, was not immune to supply chain issues in 2021. In the wake of COVID-19 disruptions, port congestion and a truck driver shortage, Costco placed purchase limits on several items including toilet paper, paper towels, high-demand cleaning supplies and water bottles – just a few of the items people were buying in droves as far back as the early days of the pandemic.

Alcohol

The Liquor Control Board of Ontario (LCBO) warned in December that transportation issues and shifting consumer demand led to a shortage of certain products. The provincial Crown corporation's chief supply chain officer Nick Nanos told The Canadian Press that imported products are more likely to be affected, including some champagnes, wines from New Zealand, Australia and South America, as well as tequila and scotch. 

Wood pallets

Wooden pallets are a small, but critical, part of the supply chain, allowing shippers to stack, store, and move large quantities of goods at a time. But skyrocketing lumber prices, an increased demand for logistics, and an ongoing labour shortage led to a decrease in the supply of the wood pallets and a spike in prices. A joint statement from North American produce industry groups warned in November that the pallet shortage had significant impact on the sector and could lead to further shortages and rising costs. According to the Canadian Wood Pallet and Container Association, wood pallets and packaging carry 90 per cent of the goods purchased every day by Canadian consumers, including food and medical supplies. "Without wood packaging, supply chains stop," the group said.

Apparel

Many apparel retailers felt the impacts of production shutdowns in Vietnam over the summer due to COVID-19. Urban Outfitters CEO Richard Haynes warned analysts in August that it was having difficulties fulfilling orders for dresses and bottoms due to the manufacturing halt in Vietnam. Nike lost 10 weeks of production in the country, where nearly half of all its shoes are made, prompting the company to warn that holiday and spring production may be delayed.

And things may not be getting easier. Reuters reported that Vietnam will fall short of its garment exports this year due to the pandemic and a labour shortage.

"The last three months of this year will be an extremely difficult time for Vietnam's textile and garment industry," the government said in a statement.

Shades of blue

This year, Dutch paint maker Akzo Nobel NV ran into a situation that its chief executive officer Thierry Vanlancker described as "complete chaos" – the company was running out of the ingredients needed to make certain shades of the colour blue. "There is one basic colour tint that is extremely difficult to get," Vanlancker told Bloomberg in October. The company was also having difficulty sourcing material needed to make metal cans. It expects shortages to persist through to mid-2022.

Cream cheese

First, New York City bagel shops noticed that cream cheese was increasingly hard to come by. Then, holiday bakers were having a hard time tracking down the ingredient. The cream cheese shortage of 2021 got to the point that Kraft Heinz decided to launch a marketing campaign offering $20 for thousands of customers unable to make cream cheese desserts this holiday season. 

The shortage of cream cheese was due in part to high demand, supply chain issues, as well as a cyberattack on the biggest U.S. cheese manufacturer, according to Bloomberg.

Hot sauce

This year, reports began to circulate about hot sauce shortages at Taco Bell locations. The company confirmed in a statement to Fox Business that "due to national transportation delays happening throughout most of the industry, we may temporarily be out of some items." The chain also posted a note on its website, warning customers that it may be out of items due to ingredient shortages and delivery delays.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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