Business/Economy

Supply shortages in Alaska continue, forcing retailers to stock up on goods and hope for the best

Kinks in the global supply chain during the COVID-19 pandemic continue to ripple to Alaska, causing widespread shortages and higher prices for a variety of products.

Anchorage business owners say they’ve kept their shelves largely full, but they’re increasingly anxious about future shipments that may or may not arrive as holiday spending ramps up.

As a safeguard, they’re ordering items months in advance and in much larger quantities than ever before. Facing unexpected spot shortages of items, they’re also stockpiling products wherever they can over concerns they’ll become unavailable in the coming months, they say.

Janet Gregory, owner of Over the Rainbow Toys in South Anchorage, said she’s crossing her fingers in hopes that most items she’s ordered show up to meet Christmas demand.

“That, and trying not to pull out what hair I have remaining, is about the best I can do right now,” Gregory said.

The toy store has been waiting months for some items, such as a shipment of giant stuffed snakes hampered by pandemic-related factory shutdowns in India, she said.

A pallet of sleds is trapped at the port in Los Angeles because there aren’t enough truck drivers to haul it, she said.

“I keep telling people as close as we are to the North Pole, we work close with the big guy,” Gregory said. “But even his elves are struggling this year, I can tell you that.”

‘It’s not one thing, it’s many things’

Experts generally blame the spot shortages in Alaska on the same global, pandemic-related wrinkles that have led to higher-profile disruptions for products like bikes, cars and lumber.

For starters, Americans with extra savings have been buying more stuff — such as computers — while they’ve been stuck at home, causing the microchip shortage that’s hurt the availability of new cars.

That demand, and complications caused by COVID-19 like virus outbreaks at warehouses, have led to cascading problems that are impacting a variety of products, said Ralph Townsend, head of the Institute of Social and Economic Research at the University of Alaska Anchorage.

“It’s not one thing, it’s many things,” Townsend said.

The surge in demand has caused bottlenecks at West Coast ports that take product from Asia, including at Los Angeles and Long Beach in California, said economist Darren Prokop, a professor of logistics and supply chain management at the University of Alaska Anchorage.

Dozens of ships are moored offshore at those California ports, waiting for their chance to deliver many thousands of product-filled containers, he said.

[Inside America’s broken supply chain]

Labor shortages add to the snarls, affecting warehouses from Asia to the U.S., as well as the transportation workers needed to move the product after it reaches land in the Lower 48, he said.

The good news is that once items reach Tacoma, Washington, they’re moving on time to Alaska without the hassles experienced earlier in the chain, maritime shippers say.

“The domestic maritime industry has remained incredibly stable through this period,” said Alex Hofeling, vice president and general manager of Tote Maritime.

“The long ship delays at the major ports are not happening on the Alaska lanes,” said Jim Jansen, chairman of Lynden.

Tote and Matson, the major maritime shippers to Alaska, own their own terminals in Tacoma, along with the dedicated infrastructure needed to move freight, said Jim Jager, a spokesman at the Port of Alaska in Anchorage.

Their ships don’t need to wait in Tacoma like others do, he said.

“We have a nice little closed system, so we have no direct impact from the cargo crisis,” he said.

But there are indirect impacts, he said. Not every product gets to Tacoma.

Items are moving through the clogged U.S. ports erratically, Prokop said.

Some products are delayed offshore as others surge through, he said. Items can also get snagged onshore if trucking companies don’t have the manpower to quickly move them.

“It’s like holding a hose tight,” Prokop said. “All the water builds up behind the hose, and you let go and all the water gushes out, and the hose zigs and zags all over place. It becomes a mess.”

As winter arrives, supply pinch hits skis and Icebug shoes

The shortages have caused uncertainty for retailers who aren’t certain what orders, or how much an order, will show up.

Alaska Mill and Feed usually sells the latest batch of studded Icebug shoes starting in late summer, said Brooke Shortridge, the store’s marketing and e-commerce manager. The shoes are extremely popular, keeping Anchorage’s dog-walkers upright on the ice, she said.

But the store is down to last year’s stock, and awaiting shipments. The shoes are designed in Sweden and made in Vietnam, she said. Pandemic-related customs issues in Vietnam appear to be the reason for their delay, she said.

A small supply is expected to arrive soon, but she’s not certain if the full order will arrive in time.

“I think they’ll all eventually make it,” she said. The question is when.

Don Bruno with Play it Again Sports in Anchorage said prices for bodybuilding weights have jumped 50%.

The costs of shipping freight to the Lower 48, from Asia or Europe, is four times higher than it used to be, he said.

“You have to eat some of that, but you don’t always have a choice,” he said.

He stocked up on snowboards and skis, both cross-country and downhill, well in advance, he said.

But some vendors have said there won’t be any reorders this winter.

A good snow year could sharply reduce his supply of skis in the coming months, he said.

Alaska, like the rest of the U.S., has seen remarkable price inflation in recent months, in part because of the global shipping problems, experts say.

Facing higher freight costs, Anchorage store owners have no choice but to raise their prices in turn, Prokop said.

“This is supply chain inflation,” Prokop said. “The worry down the line is what if we have general inflation. We’re not there yet, but when too much money is chasing too few goods, that’s where price inflation happens.”

Construction woes continue

In the construction industry, shortages of building materials have eased somewhat, industry observers say.

But delays continue.

A giant outdoor Nordic spa under construction at Alyeska Resort in Girdwood has been waiting three months for interior doors and frames, far longer than normal, said Larry Daniels, the resort’s senior project manager.

The spa was originally supposed to open in summer, but that’s now targeted for late next month — if the last remaining materials arrive in time. The delays and higher prices have helped boost the cost of the project to $15 million, up by $3 million, Daniels said.

Marco Zaccaro, lead architect for the spa, also designs new homes.

New residential construction costs have jumped more than 10%, he said.

One missing part at a warehouse can hold up a project, he said. At times, suppliers have had high-end faucets for bathrooms, but not the handles.

“We call the suppliers and they say, ‘We have all these things, but not the one part to make it work,’ ” he said.

No end in sight, so ‘get ‘em while you can’

No one knows how long the supply-chain snafus will last.

Prokop, the logistics professor, said Friday that the Los Angeles port will operate 24/7 to help resolve the backlog of goods. It’s part of an agreement involving President Joe Biden, port officials and business and union leaders.

“It will not be like turning on a light switch,” he said. “It will take time to make it happen and everyone has to be on same page before this works out.”

If successful, it could alleviate some of the problems in the coming months, he said.

But delays for some individual items will linger, he said.

New car dealers have said fleet numbers won’t return to normal for at least two years, said Rachelle Alger, purchasing director for the Municipality of Anchorage.

Prices for new cars are expected to continue rising, so the city is working to replace aging vehicles with new ones, she told Anchorage Assembly members Tuesday night.

Buying new cars hasn’t been easy because of the shortage, she said.

“We attempted to buy some Tahoes that the manufacturer canceled,” she told the Assembly. “We attempted to buy some Expeditions that the manufacturer canceled. Same thing with some Equinox vehicles.”

The city is now looking to acquire Ford Escapes, she said.

At the meeting, Assembly member John Weddleton initially questioned the purchases because of rising prices, but was satisfied after hearing Alger’s explanation.

It’s a “get ‘em while you can” situation, he said.

Sponsored