A supply chain shortage, following the onset of the COVID-19 pandemic, has rattled Oregon.
With global shipping container prices rising and transport moving at crawl speed, the nation, its businesses and consumers are challenged by unprecedented goods and service delays.
The Chronicle reached out to several local businesses to find out how the supply chain shortage has affected daily operations and its customers.
St. Helens Ace Hardware Operations Manager John Ketels said that his store is experiencing large warehouse shortages almost two years into the COVID-19 pandemic.
“One-hundred percent of our business is based on product that we can get from our Ace Hardware warehouse that is located close to Yakima, Washington,” he said. “We’re dependent on what they’re able to get for suppliers. Right now, we’re running about fifty percent of what we ordered that we’re getting.”
St. Helens Ace Hardware General Manager Melissa Peterson said that some of these delayed items include sealant, plumbing tools, electrical breakers, paint, propane, and canning jar lids.
“We want to serve our community,” she said. “If they don’t have it, they don’t have it. We’re doing the best with the cards we’re given.”
According to Ketels, maintaining inventory was most challenging in the first few months of the pandemic.
“We order twice a week. Normally it just takes two or three days to get back in stock on something,” he said. “But during the pandemic and then with a certain category being out of stock, we’ve been out of certain products for three or four months.”
Columbia River Auto Glass Owner Tricia Stockwell said that pandemic shut downs created invisible supply chain backups that weren’t realized in her St. Helens-based company until much later, when production resumed.
“We continued throughout COVID and ultimately what happened was over time, we depleted the stock that was in all the warehouses and when the (glass) manufacturing plants reopened, most of them, reopen at 25 or 50% capacity. They’re having a hard time getting caught back up,” she said.
According to Stockwell, the company has never seen its inventory this low.
“We really didn’t realize it until about April of this year that was when we first started having supply chain issues. Initially, I was starting to go, ‘What, there’s no glass for this?’ It’s kind of strange, you know, there’s always a ton of these types of vehicles out there,” Stockwell said. “It’s something we’ve never seen in our 13 years of business.”
St. Helens EMS personnel came to Stockwell for repairs, making it critically important for her business to stay operational. As the pandemic spread across the state, it was unclear if her company would be qualified essential under state health and safety guidelines.
“We weren’t sure if we were open, and customers didn’t really know or call. But I got calls that both the sheriff’s office and the fire department medic’s windshields got broken and at that point, we realized okay, I guess we’re essential,” Stockwell said.
St. Helens Market Fresh Manager Scott Simpson said that although his store hasn’t been hit quite as hard overall, certain commodities are difficult to come by.
“Right now, cat food is a big one, and then there were Gatorade and water shortages,” he said. “There’s been strikes that have happened with different companies like Nabisco, for instance, which has since been solved, but for a little while Oreos weren’t coming in. There’s a lot of sporadic and random things like that.”
The Chronicle asked Simpson what he would like customers to know about his store’s efforts to keep goods well stocked.
“We go down multiple avenues and get something on the shelf at the very least, just so they have something that fits what they’re looking to purchase,” he said.
Breaking down the numbers
According to the Oregon Department of Transportation (ODOT) freight mobility data, 60% of goods leaving and 70% of goods coming into Oregon are transported across state lines.
Oregon Office of Economic Analysis Economist Josh Lehner breaks down the figures with a simple analogy.
“If you go to Home Depot, a lot of the wood you’re going to buy is locally made wood, right? But if you go to the grocery store and you buy bananas, you know none of the bananas are grown,” he said. “It’s a measure of what do we make and buy here versus what do we buy here that we have to import.”
Lehner said he believes a 14% spike in U.S. consumer spending, based on projections from 2017-2019 data, is responsible for the supply chain disruption.
Lehner writes in an Oct. 5 blog post that although U.S. production is returning to pre-pandemic levels, COVID-related supply chain issues, such as workers on sick leave, warehouses and factories operating at or near capacity, or a lack of employees can’t be resolved fast enough to keep up with customer demand.
“We’re doing that over time, right? We’re adding more truck drivers, more warehouse workers and delivery drivers (in Oregon). All those are increasing,” Lehner told The Chronicle. “Those can’t increase 15% overnight, but consumer spending can increase 70% overnight.”
In Lehner’s blog, he states that although supply chains are breaking down all over the nation, Oregon is protected, to a certain degree, from more severe downstream consequences.
“Here in Oregon we have good and bad news. Our manufacturers rely on imported intermediate goods less than most other states,” he said. “Additionally, the movement of freight is relatively smaller in Oregon than most other states. This means the supply chain problems disrupt a somewhat smaller slice of the regional economy than is the case in the Midwest, for example.”
When will the disruption end?
According to Lehner, a full recovery from the supply chain disruption could take several months.
“From an economic growth perspective what matters isn’t just when things normalize, but when do things stop getting worse. It is possible that we are currently at or near peak supply chain problems, but still quarters away from any return to normal,” he wrote.
Lehner also said there is a silver lining.
“The silver lining today is vendor delivery times are no longer worsening economy-wide — they’re terrible but not getting worse in recent months — and business investment is strong,” he wrote. “Supply chain improvements should be coming, but we’re a long way from normal.”
In an online Chronicle poll, we asked readers if they were worried about the increasing consumer product supply disruption. Of those who responded as of Monday, Oct. 18, 65% said they were worried, 35% said they were not worried.
Follow this developing story at thechronicleonline.com and in the Wednesday print editions of The Chronicle.