The Supply Chain Crisis Worsens

Many companies are lowering their advertising costs as they struggle to meet demand, due to supply chain constraints across the sector.

It’s Worse than the Media Will Tell You

As they await to approach and offload, foreign cargo vessels are currently sitting from outside Los Angeles, as well as Long Beach terminals, which manage 40% of all cargo traffic coming to the United States.

Consumer product shortfalls are being generated by bottlenecks induced by COVID-19 shutdowns in Asia and labor constraints in the United States. As a result, many businesses are cutting their advertising budgets in order to meet current contracts.

According to the Wall Street Journal and based on current earnings calls, in recent times, Hershey Co., Kimberly-Clark Corp., and Church & Dwight Co. (all of which make consumer goods) said companies cut back on advertising expenditure in the third quarter, due to supply-chain concerns.

At an investor meeting, Hershey Co. Executive Chairwoman Michele Buck remarked, “The supply chain problems will still not allow us to meet more demand we would create via our extremely impactful marketing. It doesn’t make sense.”

Maria Henry, Chief Financial Officer of Kimberly-Clark, said her firm (which makes Kleenex facial wipes and Huggies diapers), was now unable to meet demand. On an investor call, she stated, “We have issues getting the goods to our clients.”

The Economic Situation Worsens

As reported earlier by the Daily Wire, Kimberly-Clark’s revenue increased by 7% annualized in the third quarter, but net income fell by 1%. As a result, for the second time this year, they were compelled to raise prices.

Kimberly-Clark CEO Mike Hsu noted, “Our results were significantly impacted by considerable inflation and supply chain interruptions that boosted our expenses above what we expected.”

“As it becomes evident these headwinds are unlikely to be remedied fast, we are taking more effort to minimize them, including greater pricing and improved budget control.”

GOP Rep. Chip Roy proposed the “Beat China Act” in reaction to the logistical problem, measures which would “boost domestic production and reduce America’s overreliance on logistics services.”

“As much as we rely on China and the rest of the planet to maintain us, our store supplies, economic strength, political liberty, and public safety are all jeopardized,” the lawmaker’s ministry said in a statement.

“Relying too much on supply networks located in other nations is a prescription for disaster, particularly when those nations’ rulers (like the Chinese Communist Party) want to undermine our way of life.”

“To lessen our reliance on foreign supply chains, we must take strong action compatible with the spirit of free-market capitalism.”

The American citizens deserve a self-sustaining economy, which is why I’m delighted to reintroduce the Beat China Act, which will grant tax breaks to any foreign firm that relocates its manufacturing to the United States.”