Mid-South companies continue to feel pressure from supply chain backlog
MEMPHIS, Tenn. (WMC) - It seems that everyone may be getting used to things taking a little bit longer to get ahold of, at least that’s how Chris Brown feels.
Brown is the Director of Operations of North American Electric in Hernando, and he and his staff are far from “getting used to” the supply chain backlog that continues to plague Mid-South companies.
“In most cases, you’re looking at what was three month two months ago is taking six months today,” Brown said.
NAE specializes in distributing electric motors across the country, and much of their product comes from China.
According to the U.S. Department of Agriculture (USDA), the global number of container ships is 5,587, and 10% of those ships are backlogged in Chinese ports, waiting to either dock or be loaded.
“The worst part is the cost of transportation. Things that we were paying $2,000 to get moved here two years ago, they’re now in the $20,000 range,” Brown said. “We’ve absorbed what we could, but unfortunately we’ve had to raise our prices.”
Fortunately, Brown said NAE has not had to make any cuts in its staff.
Mississippi Republican Senator Roger Wicker, who’s the top Republican on the Senate Commerce Committee, was in Southaven on Friday, speaking with business and elected leaders on various issues including supply chain hiccups.
“Our supply chain has been lessened because of Coronavirus and the worldwide recession,” Wicker said.
Wicker said the backlog of semiconductors is putting a strain on many industries, as many modern-day products: cell phones, laptops & computers and vehicles use these chips.
“Automobile plants in Mississippi, auto plants in Tennessee are having trouble getting the chips they needs,” Wicker said. “We need to incentivize American companies to get in to the semiconductor business.”
Another issue is the continued labor shortage for drivers.
Walmart recently announced they will be offering starting salaries of $95,000 to drivers.
NAE faces the same situation, and Brown says he hopes all issues: the backlog, the transportation cost, and the labor shortage will relieve themselves and bring business dealings back to normal.
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