Holiday wreath door with packages

Supply Chain Issues And Package Delays: How To Ensure These Grinches Don’t Steal Your Holiday

Lauren Nowacki5-Minute Read
November 12, 2021

Christmas 2020 hardly feels like it even existed – and some just wish to forget it entirely. Last year, all around the world, the COVID-19 pandemic canceled holiday events and family gatherings. And while the world is finally opening back up, allowing us to celebrate the holidays with loved ones again, another pandemic-caused challenge is threatening our cheer: supply chain issues.

What Does Supply Chain Mean?

The global supply chain is a series of steps, involving several parties within a company’s network, that move goods from production to final delivery. Here’s how it works, in a simple form:

Get raw materials from suppliers. First, supplies are needed to make the product. The company that sells the product will work with several different suppliers to get all the materials needed to make the product. Those may be plastic, metal or wood pieces, nuts and bolts, chips, glass and rubber, to name a few.

Make the product. Once all of the materials to build the product are collected, a manufacturer makes the product.

Distribute the product to retailers. Take the finished product from the manufacturer to the retailer, who sells the product. This may be done by boat, truck, airplane – you get the idea.

Sell the product. Whether online or in-store, the retailer sells the product to the consumer and gets it in their hands by physically giving it to them or shipping it.

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Why Are There Supply Chain Issues?

Think of the supply chain as an actual chain, with each step acting as a link. If one or more of the links is broken, the rest of the chain is affected. And, right now, there are a few broken links.

The Coronavirus pandemic caused a perfect storm for supply chain issues – with more than one factor playing a role in the problems we’re seeing today. Here are some of the ways COVID-19 caused bottlenecks, backlogs, chip shortages and other supply chain issues.

Lower production and decrease in supply: To mitigate the spread of COVID-19, businesses shut down or reduced staff, which meant there was less production.

A surge in demand: With lockdown orders in place, people couldn’t leave their homes for entertainment, which caused an increase in demand for electronics, including gaming consoles, laptops and cell phones, contributing to the chip shortage.

Stimulus checks and additional aid from the federal government put more money in people’s pockets, and some used that money to purchase more goods. That demand depleted the existing inventory and, with factories shut down and workers in lockdown, stocks couldn’t be replenished fast enough. Demand began to outweigh supply.

Labor shortages: Since the pandemic, we’ve seen a labor shortage, with millions of people retiring or quitting their jobs. Two sectors of the supply chain got hit pretty hard as there is now a shortage of truck drivers and warehouse workers.

Shipping container shortages: With things like masks, gloves and other PPE needing to be shipped all over the world, shipping containers got stuck in places that don’t normally ship things back in those containers. This caused a shortage in shipping containers, which caused a bottleneck as many products sat in ports waiting to be shipped.

Will Global Supply Chain Issues Affect The Holidays?

In short, yes. The supply chain shortages are expected to affect the holidays with lower inventory on everything from holiday decorations and dinner ingredients to gifts. While you could have an issue finding anything that requires manufacturing and shipping, you’ll likely have an especially hard time finding electronics like gaming consoles and cell phones as chip shortages are still rampant and causing electronic businesses to cut production. Chip shortages are also affecting bigger ticket items, like appliances and cars.

Supply chain issues may not necessarily mean you’ll encounter empty store shelves when you decide to do your shopping, but you may need to get a different brand, choose a different style or color or go to a few different stores to find the exact product you want. It may also mean you’ll have to pay a little extra for your gifts. Shortages have also caused an increase in prices (if you haven’t noticed that already).

If you’re planning on mailing gifts or purchasing items online, be aware that shipping delays are another issue affecting the holidays. In October, the United States Postal Service (USPS) implemented changes that have caused shipping delays that tack on a few days. It’s also raising prices on things like priority mail and stamps.

What Can I Do To Avoid Feeling These Effects?

You can’t do much about the supply chain shortage or the shipping delays, but there are some steps you can take to avoid their impact on your holiday. Here are a few ideas.

Budget Early

This year, more than ever, it’s important to budget early for the holidays. Not only should you shop a little earlier this year, but you’ll also need to pay a little more.

First, set a total gift limit. Make a list of everyone you want to gift this year and divvy up the dollar amounts to total your gift limit. For example, if your limit is $200 and you need to buy for 10 people, maybe you only spend $20 per person.

When buying Christmas gifts on a budget that’s a little tight, see where you can save by making some handmade gifts, buying off-brand or using a gift card or coupon to buy the gift. Look up sales and plan to shop then.

As you purchase gifts, make sure you are tracking your spending and adjusting your per gift budget. If you decide to spend more on one person, take a few dollars from the planned spend for others.

Be Proactive When Shopping

Both in-store shopping and e-commerce shops are affected by supply chain issues. If you’re trying to buy this year’s hot ticket item or another trendy item, start your search now. If you find it, don’t put off getting it. Chances are it may not be restocked. While people may be waiting for Black Friday to get the best deals, many are unaware that some stores have already kicked off their Black Friday deals.

While you do your normal shopping, peruse the toy, clothing, housewares and other departments to see what you can find now. You may not know what to look for specifically, but you may just find that perfect gift you didn’t consider before.

Consider Other Kinds Of Gifts

If you’re worried about supply chain issues or are already having trouble finding gifts, consider gifting items that may not be affected by shortages or find an alternative to a physical, tangible gift. Some of these options can also help you enjoy the holidays without going into debt. Here are a few ideas:

  • Purchased a gently used item from an online marketplace, antique shop or thrift store.
  • Give handmade gifts this year.
  • Donate to a cause your loved one is passionate about.
  • Cook your loved one a meal.
  • Give gift cards this year that loved ones can use once the supply chain issues ease up.
  • Sign them up for a subscription.
  • Purchase handmade products directly from the source at craft fairs, and e-commerce sites like Etsy.

Ship Packages Early

To keep your packages from arriving late, ship them as early as possible. To ensure they make it for Christmas, it’s recommended that you send them by the following dates, and no later.

  • If sending via USPS, you should ship your packages by December 15 for ground service and December 17 for first-class mail.
  • If using FedEx, send your packages on December 9 for domestic ground economy and December 15 for domestic ground.

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The Bottom Line

We’re still adjusting to the impact the pandemic has had and will have on our lives for years to come. If the pandemic has had an impact on your finances and you’re still trying to adjust, use this budgeting guide to help.

While COVID-19 has caused supply chain issues that may affect the holiday season, at least we can be grateful that we may be able to spend time with loved ones this year and celebrate together, safely.

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    Lauren Nowacki

    Lauren Nowacki is a staff writer specializing in personal finance, homeownership and the mortgage industry. She has a B.A. in Communications and has worked as a writer and editor for various publications in Philadelphia, Chicago and Metro Detroit.