Analysts say that the 2021 holiday shopping season could be harmed by out-of-stock goods and shipping delays. As we know, the recent floods in Europe and China are worsening already strained global supply chains.
Western Europe and China’s Henan province are trying to cope with the result of devastating floods. Remarkably, Western Europe and China are a key transport hub and home to several major businesses.
Moreover, the disasters have affected railways used for the delivery of goods and raw materials in both regions. According to the companies in the supply chain industry, water rushed into industrial areas, extensively marring facilities, machinery and warehouses.
According to the executive vice president of supply chain software firm E2open, Pawan Joshi, Black Friday and the holiday season will face the brunt of the impact.
He added that dorm room furniture, consumer electronics, clothing and appliances will continue to be in short supply as back-to-school shopping starts up. Joshi also announced that delays from the distribution of raw materials needed to produce goods will likely have a snowball effect. He claims that this will disrupt supply chains for weeks and months.x
We all remember that supply chains have already been majorly disrupted this year. It was caused by crises such as the shortage of shipping containers, the Suez Canal incident and coronavirus infections causing delays at the shipping hubs in Southern China.
there will likely be fewer deals, and smaller discounts
Pawan Joshi reported that there will likely be fewer deals for the peak online shopping season, and the discounts will probably be smaller. He added that prices may even go up for some goods. Joshi says that price we are likely to see price increases for goods such as furniture, consumer electronics, apparel and appliance on Black Friday.
Apple CEO Tim Cook announced last week that freight costs are high.
Besides, several companies have declared force majeure. A force majeure event happens when unforeseeable factors, such as natural catastrophes, prevent one party from fulfilling its contractual duties. It is absolving them from penalties.
Remarkably, the worst-hit industries from the floods are autos, technology and electronics.
Car production is expected to be hammered by manufacturing delays. Remarkably, many of the world’s major automakers as well as their suppliers are based in regions affected by the floods.
Pawan announced that the flooding can throw another wrench into the mix for the auto industry. As we know, it is already reeling from a semiconductor shortage.