Supply Chain Interruptions
By: George Balling
Vaccinations are being administered, Covid case counts are trending largely down, and Idaho remains largely open. All good trends and all things that make us grateful to be in business here in Coeur d’Alene. There is one persistent “hangover” from Covid that at this point is getting only worse, and that is supply chain interruptions. Persistent and intensifying supply chain problems are likely to be with us for some time, perhaps through the end of 2021 causing a lack of supply in everything from wine, to wine glasses and beyond.
The recent mis-hap in the Suez Canal will actually turn out to be a pretty minor blip in all that has impacted the flow of goods around the globe. While the shutdown of the canal for over a week clearly interrupted flows, global trade will recover quickly now that waterway is open again.
The relationship with China and their dominance over many commodity markets and products however will have much more far-reaching ramifications and cause many long-term interruptions here in the states. We are starting to see these issues already here at home. As it turns out the containers used to transport goods around the globe are in short supply since most of them are manufactured in China. As their industry shut down during Covid we are left with a shortage of containers worldwide.
China is also one of the largest manufacturers of glass bottles. Similarly impacted, this is resulting in a shortage of bottle shipments to wineries causing delays in every wine region with bottling finished wine. Along with this scarcity comes price increases. Simply put some of your wine is going to cost more as the cost of bottles goes up.
Another commodity product dominated by Chinese manufacturing is corrugated cardboard boxes. While this is beginning to affect the wine industry it is also impacting virtually every category of products we carry here at the shop. It is causing persistent shipping delays as our vendors and their suppliers are unable to box products to ship them. Similar to what is happening in glass markets, cardboard boxes are also seeing persistent price increases to go along with the supply impacts. While financial markets remain sanguine about inflation, we are already seeing broad price increases in many areas which will ultimately result in higher consumer prices.
There has also been a persistent shortage in aluminum cans. We felt the impact of this shortage late last summer when canned beer and ready to drink alcohol products were frequently out of stock as aluminum cans were in short supply.
Glass, cardboard and aluminum can shortages are all affecting your supply of wine and other alcohol products even though you may not realize it. That is only part of this story though. Covid continues to affect the functioning of the nation’s ports and warehouses. Reduced staffing due to social distancing in these facilities is slowing the receiving and clearing of products from overseas. Domestically the same personnel restrictions in warehouses are causing shipments of wine to slow. We frequently hear from distributors that wine we have been expecting to have in the shop are being moved out weeks or even months due to the slow processing in both warehouses and the ports. So far wines from Europe have been most severely affected.
We are being told by many of our suppliers to expect these challenges to get worse before they get better. Where does this leave wine consumers? We would expect that we will be changing the wines we carry more frequently as we try to fill the gaps on those that are out of stock. Some of your favorites will likely be among those we can’t get. Consumers may want to purchase more bottles of their favorites when they find them to cushion the impact of short supply and slow arrival. Trying new wines that will be closest to your favorites with the guidance of your favorite wine professional should also be considered.
One example of one of our best sellers illustrates what we can expect. The Casina Bric sparkling Nebbiolo from Piedmont in Northern Italy has been a favorite at the shop for a couple of years now. Our local distributor and the national importer of this delicious wine ran out at the end of December of last year. We had been expecting the wine to be available again by the end of January. It finally arrived last Thursday on April 8th! A delay of over 2 months, that unfortunately is becoming standard.
We will continue to keep you posted on what we are hoping will be supply chain improvements as we mover through 2021 and do all we can to keep your favorites in stock.