When Will Supply and Demand Begin to Rebalance?

When Will Supply and Demand Begin to Rebalance

Throughout the past two years, and especially in the last few months, supply and demand issues have dominated the headlines. With labor shortages, container shortages, the holiday season, congested ports, and of course, the COVID-19 pandemic, we’ve witnessed a perfect storm that has led to the current state of global supply and demand. 

Two big questions are currently on the minds of everyone involved with these complex issues:

  1. What factors have affected supply and demand?
  2. When can we expect supply and demand to return to normal?


What Factors Have Affected Supply and Demand?

Labor Shortages

The Great Resignation,” as it’s been termed, has consisted of millions of workers leaving their positions in search of more fulfilling work. The draw of being self-employed and/or participating in work that feels meaningful has been too tempting for many individuals to resist. This is true despite predictions that once government unemployment benefits ended, everyone would return to their posts. Those benefits have ended, and still, people continue to leave their jobs.


Container Shortages

Shipping containers themselves are also in short supply. Many of the goods that are shipped via container have been stuck at sea for weeks or months. Further, restrictions and shipping hurdles have made it difficult to send empty containers back to the countries that fill them.


Holiday Season

Every year as the winter holidays approach, demand tends to increase. This is always an expected occurrence, however, our already strained system is being kicked while it’s down. Many new orders are being placed every day and companies struggle to fill orders from weeks prior.


Congested Ports

Even with ports operating day and night, cargo continues to accumulate at ports in the United States. Especially for those on the west coast in Los Angeles and Long Beach, port congestion is a problem that has been discussed at length by many industry and government representatives. But while transportation officials have proposed a few viable solutions for both short term and long-term needs of supply chains, the unprecedented demand in question is not an easy issue to overcome.


The COVID-19 Pandemic

Naturally, any discussion about supply chain disruptions, supply and demand, or virtually anything else that has happened in our world over the last two years needs to involve the COVID-19 pandemic. 

Even before the pandemic began, many consumers were already trending toward doing their shopping exclusively online. But once the restrictions began, online shopping was the only option available. This meant that companies had to adjust to this new trend and greatly improve their ecommerce capabilities if they hoped to remain afloat.

Especially early on, the pandemic restrictions made it difficult for companies and consumers to move goods through the supply chain and onto customers’ doorsteps. Now, nearly two years after the pandemic first began, virus variants continue to circulate and wreak havoc on businesses and the world. 


When Can We Expect Supply and Demand to Return to Normal?

This question, while seemingly simple, is not an easy one to answer. 

Luckily, no one is taking this problem lightly. Both President Biden and Treasury Secretary Janet Yellen have made statements addressing supply and demand issues, along with the resultant inflation.

In general, many experts predict that supply and demand discrepancies will continue through 2022. Consumer demand continues to rise and the previously described supply issues haven’t gone away. 

While no one can predict exactly when things will get back to normal, there are some encouraging signs. Multiple shipping companies, retailers, and our largest ports are now working 24/7 in an attempt to get ahead of the bottlenecks and backups.


What Can Individuals Do to Help with the Issue?

These supply and demand problems will not solve themselves, and consumers can help in the effort to overcome the supply and demand discrepancies by practicing the following: 


Be Patient with Businesses

Again, there are labor shortages, supply shortages, pandemic issues, and many other considerations that put a strain on supply chains. As frustrating as it can be to not get items when they are needed, complaining and leaving bad reviews on businesses’ websites helps no one.


Start Shopping for the Holidays Now

One of the best ways to help with the extra peak in demand due to the holiday season is to order gifts as soon as possible. Even with early ordering, it’s possible that some presents won’t arrive until well after the holidays. But ordering at the last minute will undoubtedly result in late delivery.


Don’t Order More than is Needed

Reverse logistics is the process of cycling items through the supply chain in the opposite direction. The most intuitive example is that of dealing with returned products. A troubling trend in consumerism is that of ordering more items than needed with the thought that the purchaser will return the unwanted items. In the current situation, we are in, this puts extra strain on the system and will only exacerbate the supply and demand crisis.



Eventually, we will get past this period of short supply and high demand. In fact, many analysts point to more stability by late 2022.

However, while not all predictions turn out to be correct, there are many things we can do now on a governmental, business, and individual level that can help us get back to normal, slowly but surely.