America isn't running out of everything just because of a supply-chain crisis. America is running out of everything because Americans are buying so much stuff.

September, congested Port of Los Angeles with container ships Mike Blake/Reuters
Global supply chain disruptions have led to the expression "everything shortfall."

However, US imports have reached record levels in some ports and Americans are setting new shopping records.

The backlog will be reduced container by container by supply-chain professionals.

The National Retail Federation stated that Americans buy everything and would continue to do so despite supply chain snarls.

Jack Kleinhenz (the NRF's chief economic officer) stated that spending might have been higher but for the shortage of goods consumers want to buy in a Friday statement.

These shortages are so common that consumers feel frustrated when trying to obtain goods of all kinds, such as paper towels, milk, toys and many more.

But claims that the country is short of everything are missing the point. In fact, America has imported a huge amount of goods in the last eight months. This is part of why we are experiencing an incredible supply-chain congestion.

We imported more stuff than we bought.

The country's inventory-to-sales ratio can help you understand the situation. This is a measure that compares the amount of stuff sellers have to hand with how much stuff consumers buy. It is tracked by the US Census Bureau. This ratio has fallen to a 10-year low which means that we are low on stuff.

The Port of Los Angeles reported that there was a 30% increase in cargo incoming in the first nine months of the year. Important note: Most non-food goods sold in the US are imported. Since March, the Port of Charleston in South Carolina has set new records. Prologis, an industrial real estate player, has "effectively sold out" its warehouse space.

This means that inventory to sales ratio doesn't fall because the US has too much stuff. Because sales are so crazy, it's actually low.

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Retail sales increased 14.5% in the first nine months in 2021 compared to the same period in 2020. This was a year when retail sales rose 8% over 2019 NRF forecasts that sales would increase by 10.5% to 13.5% in the final quarter of 2019. Imports have been high and spending has been higher. Businesses imported lots of stuff and then Americans bought it.

Matthew Shay, CEO of NRF, stated that "Today's retail data confirms consumer's power to spend, and this will continue," in a statement.

What can we do now?

However, this doesn't mean that there aren't true shortages. For years, the supply of semiconductors could be behind demand. Furniture manufacturers are running out of foam.

However, most of the products shoppers are looking to purchase this holiday season won't have a shortage of any of their essential components. Instead, they face transportation issues somewhere along the long journey from Asia to America.

The warehouses are full, the ports are jammed and transportation prices are at an all-time high. Biden's administration felt obliged to extend hours at America's busiest port, which supply-chain experts predicted would have little effect.

Two solutions are available. The first solution is what supply-chain professionals do now: they chip away at the backlog container after container. Supply-chain professionals often joke about the other solution.

What if supply chains were a bathtub that has a clogged drain? Turning off the spigot would prevent an overflow.

The tub could take several hours to fill if the demand for the stuff slows down or the production at the source does. The supply-chain professionals joke about the possibility of power cuts in Chinese factories. At this point, that's the only possible decrease in water pressure. This is partly a joke, as it's one of few things that could, at most, temporarily, slow down American consumers.

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Business Insider has the original article.


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