Here’s how supply chain disruptions are impacting Phoenix businesses

Here’s how supply chain disruptions are impacting Phoenix businesses
Here’s how supply chain disruptions are impacting Phoenix businesses

Having trouble getting a drink to go? You can blame the supply chain. The nationwide disruption in the supply chain is driving prices up and crowding out products in downtown Phoenix.

When the COVID-19 pandemic began, the supply chain shifted in unusual ways, said Eddie Davila, Arizona State University senior lecturer and assistant professor in supply chain management. Prices rose and companies struggled to secure products.

Price increases are due to the transport. Last August, Davila said it cost about $ 2,000 to get a 40-foot container from China to the United States. In August, the cost was around $ 10,000. That is 500% more than last year.

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Davila said any company would lose money at these prices. However, a larger company with greater purchasing power like Amazon could potentially more easily overcome that loss than a smaller company, Davila said.

“[If I’m a local business owner] I may not have the purchasing power to access the small inventory that may exist, ”Davila said. “And if I want access to inventory, you might be short of it.”

Aaron Schofield owns Luana’s coffee and beer, a coffee shop in a converted home in downtown Phoenix. Schofield operated Luana’s mobile coffee cart before opening a stationary location in January 2020. When COVID-19 started in March 2020, he needed to get creative with his business approaches.

“We painted a doorway in our parking lot behind our building … and we put a doorbell on a newspaper kiosk in our parking lot,” Schofield said. “The fun part was, I worked so hard to get a stationary location only to be disabled and go through COVID in the first year.”

Schofield said he had a “rise” in the industry because of the mobile coffee cart that he believes saved his business. But after surviving COVID-19, he said Luana saw the effects of the supply chain disruption.

“The biggest mishap we have had with supply chain issues was our cups,” said Schofield. “To-go cups have disappeared for a while across the catering industry.”

Usually, Schofield said, he would ask customers to bring their own cups. Concerned about the safety of COVID-19, he didn’t feel comfortable doing it.

“When we were really short of mugs and we finally found mugs … they tried to charge us three times the amount for a box of mugs than we would normally pay,” Schofield said. “It’s not something we, as a company coming out of a pandemic, can adopt at this point in time.”

Tristan Davies, the owner of Fillmore Coffee Co. in downtown Phoenix, has also seen supply chain disruptions. Davies said Fillmore’s shipments, which are typically twice a week, have been inconsistent.

“Half the time they don’t have a driver to drive the trucks,” Davies said. “We’re waiting for products and stuff, that was pretty frustrating. But the products themselves also have far too little because they cannot get anything from their suppliers. “

The labor shortage that Davies has observed is another place where problems can arise. Since the supply is a chain, disturbances in one element seep through to other aspects, creating an aggravating problem.

“A supply chain is a chain, and a chain is only as strong as its weakest link,” said Davila. “Some days your weakest link is your supplier. Sometimes the supplier is the weakest link. “

Regardless of the cause, a disruption in the chain affects both companies and customers. Right now, as transportation costs are rising, so are the prices of goods and services.

“There might be certain items that you are used to that you may not be able to get,” Davila said.

Davies experienced this firsthand. He said he couldn’t serve some menu items a few days ago because a driver couldn’t deliver his shipment until later that day.

“It just complicates a lot of things, it doesn’t flow like usual, which is frustrating,” said Davies.

As the world becomes more global, supply chain disruptions are more likely to occur, Davila said, so there’s no way to predict when these issues might end. During these turbulent times, Phoenix local businesses have teamed up to make sure no one is without support.

“We take care of each other as best we can by sharing things when we can,” said Schofield. “The catering industry has really teamed up to ensure that the concept of each individual does not stand alone.”

When Schofield found cups, he bought some for his friends’ restaurants. A few days later they brought him some pizza boxes. Actions like this unite the community in times of crisis.

“I think there’s something beautiful about this mess,” said Schofield.