Kirsten Gjesdal stopped ordering some products for her kitchen supply store in Brookings, S.D., tired of telling customers she didnÕt know when the items would arrive.
In the face of an enduring shortage of computer chips, Toyota this month announced that it would slash its global production of cars by 40%. Factories around the world are limiting operations — despite powerful demand for their wares — because they cannot buy metal parts, plastics and other raw materials. Construction companies are paying more for paint, lumber and hardware, while waiting weeks and sometimes months to receive what they need.
At the same time, many companies had slashed their inventories in recent years, embracing lean production to cut costs and boost profits. That left minimal margin for error. An unexpected jump in orders for televisions in Canada or Japan exacerbates the shortage of computer chips, forcing auto manufacturers to slow production lines from South Korea to Germany to Brazil.
One customer in England that makes machines to seal packaged food has been hobbled by its inability to secure needed parts. Its supplier in Japan used to take four to six weeks to deliver key devices; now it takes half a year. The Japanese factory has struggled to secure its own electrical components, most of them produced in Asia and using computer chips. Auto manufacturers’ desperation to secure chips has made those components harder to obtain.
In May, China shut down a huge container port near Shenzhen — one of the nation’s leading industrial cities — after a small outbreak of a coronavirus variant. The port did not resume operations for several weeks. Before the pandemic, shipping a 40-foot container of games from Shanghai to the warehouse he uses in Michigan cost $6,000 to $7,000, Poses said. His next shipment, scheduled to leave China in mid-September, will cost at least $26,000. And his freight agent warned him that the price will most likely rise, to $35,000, because of rail and trucking difficulties in the United States.
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