It feels like every time you turn on the news there is another article on global shortages for something. From your local groceries to electronics items we usually take for granted are sometimes missing from the shelves. But why does it seem to be happening so much now?
We’ve looked into the mains reasons behind the shortages, why they keep affecting so many parts of our lives and some tips to deal with it.
The Core Reasons Behind Shortages
Lets get into why they keep happening. There are several major factors that cause shortages and they often work together. Here is a quick breakdown of what’s going on:
1. Supply Chain Disruptions
The supply chain is a network of steps (companies) that get a product from the factory to the shop store. This chain can easily be disrupted by unexpected events such as natural disasters, pandemics or political issues. For example in 2021 we have the slightly amusing situation of 1 ship blocking the Suez Canal for 6 days! Why was this so big? It’s the shortest maritime route between Asia and Europe, so quite an important trade route with around 12% of the worlds trade going through it.
Its hard to believe it was over 4 years ago but the COVID-19 pandemic decimated supply chains around the world. From factories to distribution centres it all ground to a halt, and whilst thankfully we are past the worst of the pandemic the ripple effects and global shortages are still felt today.
2. Increased Demand
We can be our own worst enemy at times, we saw that here in the UK during COVID-19. You might remember the toilet roll saga, demand went through the roof which in turn resulted people to panic buy and hoard. However, with this increased demand you then have the issue where it outweighs the supply thus creating shortages. Less dramatic but also demonstrating the point was the large surge in demand for home office equipment and gym gear, with many of us confined to our homes a lot turned to these products.
In more recent times in 2024 and the political pushes for a greener world we are seeing the demand for things like electric vehicles (EV’s) and sustainable items rise. This is putting pressure on the manufacturers to keep up. When demand jumps suddenly like this it often outpaces supply which in turn leads to shortages.
3. Labour Shortages
AI cant replace us yet! But equally labour shortages are a big contributor to shortages with almost every industry hit by this. When there aren’t enough workers to produce the goods, transport them or even stock shelves the availability of products drops. This is another impact felt following the pandemic. Many workers left their jobs due to health concerns, found new work in new fields or unfortunately were made redundant.
Whilst some industries grew exponentially taking advantage of high demand, we’ve seen in recent years these scale back. Other industries never fully recovered and are still trying to fill positions. Especially those in transport such as trucking, shipping and also manufacturing. Fewer workers equals longer time to get your products.
4. Material Shortages and Manufacturing Delays
As technology continues to advance so does the dependence on rare materials. For example things like computer chips also known as semiconductors are crucial for smartphones, cars and even household appliances. There has been a global shortage on these chips for several years now. This has impacted production for many high demand items.
Factors like the Ukraine war have also limited access to key materials such as certain metals used in electronics. A big resource Ukraine has is Lithium which is a key element for batteries on EV’s. This is also why it’s still difficult to find certain models of cars or computers (At an acceptable price)
5. Geopolitical Tensions
The most annoying and frustrating of all the reasons. Trade tensions, tariffs and other political issues make it harder for good to go between countries. When countries place restrictions on each other’s products shortages can quickly happen. Whilst its more complex than this a simple disagreement by governments impacts us normal folk.
A good example is how the recent tensions between China and he U.S. have affected the tech industry. If companies cant get the components they need from overseas they are forced to slow production. You guessed it, that means less products for you to buy.
How Shortages Affect Consumers (You and Me)
When shortages occur guess who feels the pinch? That’s right you and me, we are typically impacted in three major ways:
Higher Prices
Fewer products often mean higher prices, when demand outweighs the supply the first thing to happen is the price goes up. Are they being greedy and taking advantage of the market? Are they doing it to control the demand levels or reinvesting to produce more? Likely all of the above occurs when this happens. This is one reason why basic goods like eggs or fuel have gone up sharply in recent years.
Longer Wait Times
Nobody likes to wait, we are an impatient bunch. However shortages can mean sometimes we have to wait weeks or even months to get certain products. Most notably this has happened with cars but also furniture and gaming consoles. This can be frustrating especially when we’ve been used to these items being readily available.
Reduced Variety of Choices
When companies are stretched and cant keep up with demand they often narrow their product lines. This means shops might stock fewer brands, sixes or options of popular items. This isn’t always a bad thing, sometimes you have that many choices its hard to pick what you want.
What Can Be Done to Prevent Future Global Shortages?
As recent world events have certainly highlighted, we’ve taken a lot for granted and now we’ve witnessed the pain points that can occur its an area of high focus. Companies, governments and whole industries are now working on ways to prevent future global shortages, such as the following:
Diversifying Suppliers
You’ve probably heard the saying ‘don’t put all your eggs in one basket’, this is making sure we don’t do exactly that. Instead of replying on one country, or company for materials many companies are now starting to use multiple suppliers from different areas. This way if one supplier was to face delays they have alternative solutions. For example, the tech industry is no looking beyond Asia for manufacturing and sourcing materials.
Boosting Domestic Production
This is one of my favourites, doing more at home! Countries are now starting to increase local production of certain goods. By producing more goods and products locally you can then avoid or reduce the impact caused by international events or trade issues.
Investing in Technology and Automation
Some industries are turning to technology to help solve labour shortages. Automation in warehouses, factories, and even farms can help fill the gaps when there aren’t enough workers. Things like AI can also make production faster and more reliable, reducing the chances of shortages and potentially even bringing costs down.
How to Cope with Shortages
Whilst shortages are certainly frustrating there are ways you can adapt. Although a good consideration is ‘do you really need it’ or are you buying it for the sake of it.
Plan ahead
All seems so easy in hindsight, but where possible plan ahead. Especially for high demand items like electronics or furniture. If its for a birthday present or Christmas consider buying it months in advance when demand is likely lower. Id you know a certain product is hard to find or regularly out of stock, check for restocking schedules or set up alerts with retailers.
Consider Alternative Brands or Products
Yes, we all have our favourites when it comes to certain things. However if your go to brand isnt available why not try an alternative? Many quality options are available in different prices ranges. Most of these top brands are the same as the cheaper ones but the brand carries the higher price tag. Shop around, not only will you have more options during a shortage but might save you a penny or two.
Look for Bulk Deals
Unless its toilet roll during a pandemic (don’t be that person) looking for items you regularly use being available in bulk is a good way to save money and prevent last minute hunting.
Conclusion: What Lies Ahead?
As our world becomes more connected, some types of global shortages may continue. The global supply chain is complex, and events like natural disasters, pandemics, and political tensions will always have an impact. However, industries are adapting. By diversifying suppliers, increasing automation, and improving domestic production, companies and governments are working to make products more available and shortages less common.
For now, staying informed and planning ahead are some of the best ways to manage the effects of shortages. The more we understand the factors behind these issues, the better prepared we can be to face future challenges.
