Inside the Fourth of July supply chain shortages

With scorching temperatures across the country this past week, there’s no denying it — summer is most definitely here. And with summer comes the most American of holidays, where we all prepare to break out our grills, coolers and star-spangled outfits to celebrate the nation’s independence. 

While there are plenty of ways to recognize the day, the most popular activities by far remain two of the most quintessential American favorites: cookouts and fireworks. According to the National Retail Federation, 61% of those celebrating plan to do so by firing up the grill, while 33% plan to attend a fireworks display. Taken together, the country is expected to shell out over $1 billion more on food than last year, with $7.5 billion expected to be spent for the holiday, amounting to about $80 per American. At the same time, it’s expected that fireworks sales will top last year’s record of nearly $2 billion. That’s a lot of food and fireworks to move across the country! 

In order to satisfy America’s love of BBQ and pyrotechnics, supply chains are absolutely essential to get goods on the shelves in time for this weekend’s celebrations. But as with many products these days, that can be easier said than done. With tight capacity, product shortages, and shipping issues making it difficult to match demand at the best of times, let’s take a look at how the country is preparing for the Fourth of July rush in 2021.

Supply chain bottlenecks put BBQ essentials in short supply

For most, the Fourth of July doesn’t truly begin before the BBQ is fired up, and hot dogs are a clear favorite. According to WalletHub, Americans put 150 million hot dogs on the grill every Independence Day, making them perhaps the most patriotic dish enjoyed at cookouts across the country. 

While we can't imagine celebrating Independence Day without the iconic sausage, pork supplies have been hit particularly hard over the pandemic. Back in the earlier stages of lockdown, a COVID-19 outbreak forced major pork processor, Tyson, to shut down their plant, causing disruptions that sent a ripple effect through the supply chain that’s still being felt today. Adding to this is late May’s cyberattack that temporarily shut down the world’s largest meat supplier, JBS, and the shortages and delays that has had on the market.

As though these disruptions weren’t enough, many restaurants have been grappling with changing lists of brief shortages of key ingredients and products as supply bottlenecks as they attempt to move products from ports and distribution centers to kitchens plague the industry. At least nine fast-food chains and restaurant companies surveyed by Reuters said some of their locations have been plagued by challenges in stocking summertime staples like hot dogs, bacon and chicken wings.

In this case, the problem is not necessarily caused by a scarcity of the products themselves. Rather, supply chain networks of cargo ships, trains and trucks are buckling under ongoing stress from the pandemic — which has also caused facility closures and reduced labor at farms, factories, ports and warehouses. Adding to that pressure is the preference for outdoor barbecues earlier in the year while people avoided gathering indoors, and the surge in demand for meals at restaurants as the country has reopened. Both of which caught many suppliers off guard.

Container shortage leaves empty shelves at fireworks suppliers

Of course, while the food is obviously a big part of most Fourth of July celebrations, the real star of the show is the fireworks — especially in 2021. This year, families across the country are stocking up on fireworks to not only celebrate the nation’s independence, but also their freedom from COVID-19 and lockdowns. During the pandemic, the U.S. consumer fireworks industry experienced unprecedented sales with industry revenues nearly doubling from $1B in 2019 to $1.9B in 2020. With those record-breaking sales, retailers exhausted their inventories and have encountered numerous challenges preparing for this first post-pandemic major holiday.

In order to replenish their stock, one of the biggest challenges echoes those faced by restaurants and backyard BBQers trying to get stock for their grills — supply network stress. While demand for fireworks is high this year, importing from China has become increasingly difficult for suppliers, with many facing months of delays. The global shipping container shortage has made it more expensive to transport products from China, especially for items like fireworks, which are classified as dangerous goods and given less allotted space on freighters. This has led to an increase in transportation costs, with those of Phantom Fireworks, one of the largest consumer fireworks brands in the US, paying out more than double their usual rates. 

According to the American Pyrotechnics Association, this shortage stems from a perfect storm of issues in the supply chain. From delays in fireworks manufacturing in China, to a shortage of containers and limited capacity, to extreme transportation delays with multi-modal shipments, issues have compiled to make the task of satisfying the country's demand for pyrotechnics more challenging than ever. 

"Nobody expected this hangup in logistics. We have companies that have never worked with us before coming to us for supplies. People are scrambling to get supplies, and we just have enough to stock our own shelves."

William Weimer, Vice President, Phantom Networks

As usual, it all comes down to supply and demand. The problem is, there’s a lot of demand, but most stores can’t get their supply. So for America’s biggest day for fireworks, it looks like we can all expect a little less bang for our buck this year.

How can shippers avoid being caught short on holiday essentials?

Shortages and shipping delays have affected a wide range of consumer products since the pandemic erupted last year. Increasing demand and decreasing container ship availability, paired with COVID-19 control measures and labor supply issues that have decreased the number of port workers and truck drivers on hand to get supplies from ships to stores have made it increasingly challenging to keep products on shelves. 

Experts have said the supply chain crisis is likely to last well into 2022, and it likely won't stop until we have widespread vaccination, new shipping containers, and a drop-off in demand. In order to get through this volatile period and keep shelves stocked for big events like the Fourth of July, it’s vital for shippers to ensure they have a resilient, scalable supply chain in place. 

At Shipwell, we provide the tools needed to uncover efficiencies and manage disruptions that keep meat on the grill, and fireworks in the sky. To learn more about how we can help you prepare, schedule a demo today — and have a happy Fourth of July!