Borderland faces price hikes and product shortages due to supply chain crisis

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EL PASO, Texas (KTSM) – People are being warned about a shortage in products for the holiday season, and retailers are already experiencing empty shelves. This as experts are warning of the most expensive Thanksgiving dinner in history.

The issues being caused by a supply chain crisis that’s impacting Americans nationwide. According to Jerry Pacheco, the President and CEO of the Border Industrial Alliance, Billions of dollars in product is waiting on ships off the west coast to be unloaded and delivered. The back-up causing a massive delay in delivery and a sharp increase in price

The crisis is also impacting the automotive industry, construction industry and potential new growth in the Borderland. Pacheco, the automotive industry is suffering because of a massive chip shortage.
In addition, he said growth is being delayed at a time when the borderland is experiencing a boom in recruiting companies and construction.

Pacheco said that over the last year more than $1.3 billion in new space was constructed in the area, but now builders who want to put up new space can’t, because they can’t be guaranteed the delivery of their steel on time. This results in the builders being unable to complete their project, which also hurts the efforts to recruit new businesses to come to the area.

“It’s frustrating when you have this growth spurt and you’re being held back by the lack of things like steel. One project was having trouble finding PVC pipe for example. And we have a major supply base here to Mexico’s Maquiladora industry. Some of our suppliers are experiencing delays because their suppliers are experiencing delays or the materials are coming from outside the United States particularity Asia. We know what is happening at the ports of Long Beach and Los Angeles. It’s very very disruptive.”

Jerry Pacheco, CEO Border Industrial Alliance

Pacheco references the largest two ports on the West coast, that of Long Beach and Los Angeles. Both are severely backed up. Hundreds of ships are floating along the coast waiting for their turn to dock and be unloaded.

Pacheco said that because of the delays, billions of dollars of product is floating in the ocean and it’s taking more than a week to unload the ships once they’re docked.

According to Pacheco, there a number of issues are causing the back-up at the docks including higher demand, poor infrastructure, a labor shortage, and even vaccine mandates.

“A lot of them [employees] haven’t come back. A lot of them don’t want a [vaccine] mandate. In the meantime the cargo is piling up on the west coast. It’s ironic we have so much demand, so many job opportunities and it’s not getting done. Now the warehouses are running out of space particularly in California”

Jerry Pacheco

Recently Governor Greg Abbott made an offer to shipping companies, extending to them the use the ports in Texas. Something Pacheco said would be a great opportunity for the Lonestar state and may ease the pressure and price. According to Pacheco, Freight rates are nearly 90% higher than a year ago, and what used to cost $2,000 to ship, now costs $20,000. Prices Pacheco said will be passed right along to consumers.

“The bottom line to you and I, is that we are going to be paying more for our goods, it’s inevitable. In logistics if you can save 3-4 cents on a dollar you’re doing very well, but when your cost goes up 10 fold you pass that down the chain and it eventually hits you and I in the cost of higher automobiles, the cost of higher consumer goods.”

Experts say it is going to get worse before it gets better and they don’t see the supply chain crisis improving until at least next summer.

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