It’s nearly impossible these days to follow the news without coming across a headline about how the supply chain is in upheaval not just in the U.S., but around the world.
“Global Supply-Chain Problems Escalate, Threatening Economic Recovery”
“Stock Investors Fret Supply Chain Woes Could Knock Earnings”
"VC money pouring into supply chain tech solutions"
A recent article in The Atlantic, “America is Running Out of Everything,” was inspired by the writer’s hours-long trek to three stores to fulfill a simple shopping list. In researching what was driving the empty shelves and product shortages he encountered, one of the writer’s discoveries is that high demand and limited supply are causing prices to skyrocket. He cites as an example the cost of a shipping container: Pre-pandemic, a container holding roughly 35,000 books cost $2,500; today, that price is tenfold.
It’s enough to make one wonder if – not when – things will ever return to normal, and begs the question, what exactly is the new normal when it comes to the supply chain? We don’t know the answer … yet. But we’re hopeful we’ll soon see signs of improvements and plans for building a better tomorrow.
In February, President Biden signed an executive order hinting at hope for the future. Its intent is straightforward: create supply chains that are more resilient and secure for critical and essential goods. We need to think back only to last year to see how supply chain disruptions impacted healthcare workers who couldn’t get their hands on PPE at the beginning of the COVID pandemic.
While the stalled supply chain has certainly disrupted the way we do business, it has inspired about 1,500 North American companies to seek out domestic production, according to the 2021 Thomas State of North American Manufacturing Report. Not only that, but 83 percent of manufacturers said they were “likely” to “extremely likely” to restore. The year before, that number was 54 percent.
Let’s imagine for a moment that that happens. The Thomas report states, “If four in five U.S. manufacturers bring on one new domestic single-contract supplier, it will inject $443 billion into the U.S. economy”. $443,000,000. That’s a lot of zeros, and it suggests great potential for the future.
At Commercial Funding Partners, we have a front-seat view of what will happen in the coming months and years as we continue our three-decade tradition of helping small and mid-size businesses like yours secure the funding they need to grow. We are curious how many clients will turn to domestic suppliers or venture into that business line. We remain committed to continuing our partnership with each of you and serving as your trusted advisor as we navigate the new normal.
