Despite the supply chain crisis, Albuquerque’s Man’s Hat Shop has enough stores to cover overheads and a lot more.
For the company’s 75th anniversary, Stuart Dunlap is having his best year so far, although like many companies he is burdened with the national and global supply problem. The demand is great, he said.
“We will be very limited on stock,” said Dunlap of the upcoming Christmas shopping season. “But we also sell a lot of gift certificates.”
A faculty member at the University of New Mexico says the supply crisis reflects a convergence of problems. These include a shortage of truck drivers in the United States, a backup of container ships at the west coast docks, and calls for products due to economic controls.
The impact can be far-reaching, reducing the availability of athletic shoes, shirts, cars, and vacation gadgets. The power supply could also be affected in the long term, according to the New Mexico Public Regulation Commission.
“It’s pretty bad,” said Dave Dixon, a senior lecturer in economics at UNM, of the supply challenge. “It’s a really complex problem. At the moment it’s getting more expensive. It will take you longer to get to places. “
A state business leader recommends vacation shoppers buy early and locally in hopes of avoiding national and global supply problems that may worsen before they improve.
Rob Black, director of the New Mexico Chamber of Commerce, said stores will thin out sooner and stores will have a harder time replenishing their stocks.
“So, I think it’s better to get your hands on for the holiday season now,” Black said on Friday. Purchasing locally, he said, will avoid problems with home delivery of products.
The Public Regulation Commission on Friday urged the state’s utilities to report the impact of the problem on their operations. For example, the Public Service Company of New Mexico told the commission this summer that their contractors are having difficulty sourcing renewable energy equipment to replace the coal-fired San Juan Generating Station in the northwestern part of the state.
A PNM manager, Tom Fallgren, even suggested in August the company could consider keeping the power plant open beyond the expected June 2022 shutdown. PNM spokesman Ray Sandoval said Friday that it had been considered briefly but will not happen, in part because PNM’s mining contract there ends in June and poses contractual and regulatory challenges. The mine is slated to close next year.
“It is now very evident that global supply chain problems affect everything, not just materials for renewable energy projects,” said Santa Fe Commissioner Joseph Maestas.
Commissioner Jefferson Byrd, a rancher near Tucumcari, said the supply crisis was a problem for many businesses. “It’s ridiculous what doesn’t show up in some weeks and months,” he said. “And for the next week or next month, it’s going to be something else that you can’t get.”
Byrd said at various times that he has had difficulty sourcing brass barrels, PVC materials, wooden poles and solar panels.
An associate professor of logistics at Michigan State University said the supply problem was primarily related to stimulus money given to Americans during the pandemic. “It depends on people buying more,” said Jason Miller.
The third stimulus check, issued in March, contributed to record demand for clothing and shoes, Miller said. Government statistics show personal income in March was 25 percent higher than in January 2020.
With consumers stuck at home because of the pandemic, Americans bought more furniture, appliances, computers and video games earlier this year, he said, and the three installments of stimulus money gave them the money to afford them.
As for container ship backup, he said U.S. ports handled 16.9 percent more cargo by weight from containers in the first eight months of this year than in the first eight months of 2019. It was a record amount, said he, part of an “infinite peak season” due to “prolonged increased demand”.
The idea that the supply chain is broken is wrong, he said. “It’s tense, but we’ve processed a record number of imports this year.”
Many point to the lack of truck drivers as a key element of the supply chain crisis. Johnny Johnson, executive director of the New Mexico Trucking Association, said, “We were in a driver shortage before the pandemic broke out.”
The disease and its bans have made the situation worse, Johnson said, and an expected federal mandate for COVID-19 vaccinations for companies with 100 or more employees will make it worse.
“There is no state that is left untouched by the driver shortage,” he said. Young people don’t fill in the gaps left by older drivers who leave the field, he said.
The American Trucking Associations estimated that the truck driver shortage will hit a record 80,000 this year. Miller said his own research with federal statistics shows that the problem isn’t that bad.
Still, most agree that the supply chain cannot currently respond to demand. Moody Analytics reported this month that the situation is going to get worse, citing the lack of truck drivers as the reason.
Car dealerships have been suffering from a shortage of computer chips for months, which has reduced the availability of new cars. Buddy Espinosa, general manager of Toyota from Santa Fe and Enchanted Mazda, said he usually has 400 new cars available, but right now he has 20.
“The demand is strong, and that means the gross profit is higher,” Espinosa said.
Dunlap at Man’s Hat Shop sounded optimistic on Friday, although he did admit that supply is low. He sources many of his hats from Texan manufacturers, he said, but there seems to be a shortage of boxes, leather and linings and a shortage of workers in the industry. His typical inventory is 5,000 hats, he said, currently there are 1,500.
It used to take four to six weeks for a delivery of hats to arrive, and now it takes six to seven months.
And people want hats. Baby boomers with thinning hair want them. Lawyers want them. Dunlap said film workers want them as much as golfers and, of course, ranchers. They want felt hats, straw hats, western hats and dress hats, he said.
He had to go back to the John Travolta Urban Cowboy period of the early 1980s to remember a time when there was such a demand for hats. He could use more hats now, he said, because business was going very well.
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