Global Supply Chain Issues Affect Karat by Lollicup

Global Supply Chain Issues Affect Karat by Lollicup

The global supply chain is struggling with a multitude of contemporaneous issues which has led to consumer frustration. Over a year into the coronavirus pandemic and every aspect is still feeling its effects — from a resurgence in India to growing delays of consumer demands in the United States. Karat® by LollicupTM, along with other U.S. companies, is trying its best to maintain service and supply during this challenging time but some obstacles are making it nearly impossible to do so.

Increased Demand | Now that COVID-19 vaccines are widely accessible in the U.S., the economy is reopening, and consumers are back out shopping and dining. While this is a great sign that the worst is over for America, the sudden high demand for goods typically sourced from overseas are not being supplied fast enough and those that are being sourced are seeing significant price increases.

Raw Material Shortage | With shutdowns and uncertainty this past year, companies supplying raw materials were unable to produce much nor forecast properly, resulting in a shortage of inventory to meet the new rapid demand.

Infected Workforce | Although many nations are seeing a decline in coronavirus infections, there is a deadly surge in India causing a loss in the workforce for ocean freight. India makes up a large percentage of seafarers within the global shipping industry. There are now less available crews and even some of those Indian-carrying ships are being turned away from some ports for fear of contagion.   

Limited Cargo Capacity | The capacity of ocean freights and trucking vehicles cannot accommodate the demand either. Logistic companies simply do not have enough container space to fit everything.

Shipment Delays | A combination of a reduced maritime workforce, limited carrier and truck capacity and bottlenecking at the ports has pushed lead times 2-4x as long. This has made it difficult for businesses to provide accurate delivery dates and leaves end users panic-buying where they can, which adds to the supply problem.

Rising Costs | Each chink in the supply chain armor has added to monumental price increases on raw materials and freight. Pricing is no longer negotiable for importers and that will cut directly into their bottom line resulting in these increases being passed onto consumers.

Unfortunately, the impact of the coronavirus will continue to affect the trade market through next year. At the very least, Karat® by LollicupTM will be transparent when we are forced to raise prices.