Nearly 90 Percent of Firms Still Experiencing Supply Chain Disruptions, Many Say It’s ‘Severe’: Study

Nearly 90 Percent of Firms Still Experiencing Supply Chain Disruptions, Many Say It’s ‘Severe’: Study
Longshoremen work next to a container ship at Port Everglades in Fort Lauderdale, Fla., in October 2011. (Joe Raedle/Getty Images)
Katabella Roberts

Nearly 90 percent of businesses with operations at the Fort Lauderdale port Florida are still experiencing supply chain disruptions owing to the COVID-19 pandemic, according to a business survey by a researcher at Florida Atlantic University.

Results from the inaugural Port Everglades Economic Engine Performance Index show that nearly 90 percent of survey respondents said they’re still experiencing supply chain disruptions, which they attributed to the global pandemic, with 30 percent stating that those disruptions are severe.

The survey consisted of 35 emailed responses to questions directed to members of the Port Everglades Association, a business organization that promotes the port. Among those members are cruise line and engineering firms as well as cargo ship lines.

The supply chain crisis over the past year or so has led to shortages of multiple items and products, such as consumer electronics, food, and semiconductor chips—the latter of which has drastically affected the automobile industry.

Those shortages have in turn contributed to runaway inflation, which soared to 9.1 percent in June, before declining slightly, to 8.5 percent last month, prompting praise from the Biden administration as it attempts to tackle the soaring prices that are affecting Americans.

Yet, according to data from the Bureau of Labor Statistics (BLS) for July, the food index increased 10.9 percent over the last year, the largest 12-month increase since the period ended May 1979.
Grocery stores have been forced to pass higher prices onto consumers this year due to increased labor costs, shipping, and logistics issues as well as higher manufacturing costs.

Optimistic About the Future

Despite the current situation, the survey showed that businesses with operations at the Fort Lauderdale port are "overwhelmingly optimistic over the short and long term."

Overall, nearly seven out of 10 firms surveyed said they have at least recovered to pre-pandemic levels, while 22 percent of respondents indicated that their firm is now performing better than it was at pre-COVID levels.

Those firms surveyed which are involved on the cargo side of the port said they expect imports and exports to increase or remain steady over the next 12 months, although one firm indicated that the volume could decrease.

In addition, more than 60 percent of respondents said they plan to add employees in the next three months. However, amid a labor shortage, the majority of those firms said they have struggled to find qualified candidates.

The New York Fed's Global Supply Chain Pressure Index (GSCPI), which measures supply chain conditions using data from the transportation and manufacturing sectors, found that global supply chain pressures decreased in July, to 1.84 points above typical levels, down from the previous December all-time high of 4.32.

That data indicate that while supply chain bottlenecks are slowly being eased, global supply chain pressures still remain historically high.

"This survey clearly shows that the supply chain troubles we’ve seen over the past two years are starting to decline," said David Menachof, Ph.D., the study researcher and an associate professor in FAU’s Information Technology and Operations Management Department within the College of Business. "There will still be sporadic shortages, but I think the outlook for the holiday shopping season will be rosier than last year. Still, it may take until 2023 to get back to what we think of as normal."