ALBUQUERQUE

Despite the supply chain crisis, the Man’s Hat Shop of Albuquerque has enough business to cover overhead and then some.

On the 75th anniversary of his business, Stuart Dunlap is having his best year ever, even though he is burdened, like many businesses, with the national and global supply problem. Demand, he said, is high.

“We’ll be very limited on inventory,” Dunlap said of the coming holiday shopping season. “But we do sell a lot of gift certificates, too.”

A University of New Mexico faculty member says the supply crisis reflects a convergence of problems. They include a shortage of truck drivers in the United States, a backup of container ships on West Coast docks and clamor for products because of stimulus checks.

The effects may be wide-ranging enough to tighten the availability of athletic shoes, shirts, cars and appliances for the holidays. Even the supply of electricity could be affected over the long term, according to the New Mexico Public Regulation Commission.

“It is pretty bad,” Dave Dixon, a senior lecturer in economics at UNM, said of the supply challenge. “It’s a really complex problem. Right now things are going to be more expensive. They’re going to take longer to get to places.”

A state business leader recommends holiday shoppers buy early and locally if they hope to elude national and global supply problems that may worsen before they improve.

Rob Black, head of the New Mexico Chamber of Commerce, said store supplies will thin out earlier, and shops will have a harder time replenishing stock.

“So, I think it’s better to get what you need now for the holiday season,” Black said Friday. Buying locally, he said, will avert problems with getting products delivered to the house.

The Public Regulation Commission asked the state’s utility companies Friday to report the impact of the problem on their operations. Public Service Company of New Mexico, for instance, told the commission this summer its contractors are struggling to get equipment for renewable energy systems to replace the coal-fueled San Juan Generating Station in the northwestern part of the state.

A PNM executive, Tom Fallgren, even suggested in August the company might consider keeping the generating station open beyond its anticipated June 2022 closure. PNM spokesman Ray Sandoval said Friday that was briefly mulled over but will not happen, in part because PNM’s mine contract there ends in June, posing contractual and regulatory challenges. The mine is set to close next year.

“Now it’s very apparent that the global supply chain issues are affecting everything, not just materials for renewable energy projects,” said Commissioner Joseph Maestas of Santa Fe.

Commissioner Jefferson Byrd, a rancher near Tucumcari, said the supply crisis is a problem for many businesses. “It’s ridiculous what doesn’t show up on some weeks and some months,” he said. “And then the next week or next month, it’ll be something else you can’t get.”

Byrd said at various times, he has had difficulty acquiring brass barrels, PVC materials, wooden rods and solar panels.

A Michigan State University associate professor of logistics said the supply problem is primarily related to stimulus money that was issued to Americans during the pandemic. “This comes down to people buying more,” Jason Miller said.



The third stimulus check, issued in March, has contributed to record demand for clothing and footwear, 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 early this year bought more furniture, large and small appliances, computers and video games, he said, and the three installments of stimulus money gave them the cash to afford them.

As for the container ship backup, he said, U.S. ports in the first eight months of this year have handled 16.9 percent more freight by weight from containers than in the first eight months of 2019. It’s been a record amount, he said, part of a “never-ending peak season” from “prolonged elevated demand.”

The notion that the supply chain is broken is faulty, he said. “It’s strained, but we’ve processed a record number of imports this year.”

Many point to a truck driver shortage as a key element in the supply chain crisis. Johnny Johnson, managing director of the New Mexico Trucking Association, said, “We were already in the driver shortage before the pandemic hit.”

The disease and its lockdowns have worsened the situation, Johnson said, and an expected federal mandate for COVID-19 vaccinations for companies of 100 or more employees will make it worse.

“There’s not a state unaffected” by the driver shortage, he said. Young people aren’t filling the openings left by older drivers leaving the field, he said.

The American Trucking Associations estimated the truck driver shortage will hit a record 80,000 this year. Miller said his own research using federal statistics indicates the problem isn’t that bad.

Nevertheless, most agree the supply chain can’t respond to demand right now. Moody Analytics reported this month the situation will worsen and cited the shortage of truck drivers as a reason.

Auto dealerships have suffered for months now because of a computer chip shortage that has cut the availability of new cars. Buddy Espinosa, general manager of Toyota of Santa Fe and Enchanted Mazda, said he typically has 400 new cars available but right now has 20.

“The demand is strong, and it does mean that the gross profit is higher,” Espinosa said.

Dunlap at the Man’s Hat Shop sounded upbeat Friday, even though he acknowledged supply is low. He gets many of his hats from Texas manufacturers, he said, but it seems there is a box, leather and lining shortage as well as a lack of laborers in the industry. His typical inventory is 5,000 hats, he said, and it currently is 1,500.

He said it used to take four to six weeks to receive a shipment of hats and now it takes six to seven months.

And people want hats. Baby boomers with thinning hair want them. Lawyers want them. Dunlap said movie workers want them, too, as do 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 recall a time of such demand for hats. He could use more hats now, he said, because business is excellent.

(4) comments

bob chilton

Perhaps, there should be a filter on Amazon to exclude China made products. Certainly, our manufacturing industry will benefit by the exclusion of products coming out of the PRC.

Richard Reinders

There is more truckers to haul containers but the unions won't let them unless they join the union. Our Transportation Secretary is a sleep at the wheel and should be aware of this problem and issue an order to suspend the requirement of being in the union to get containers moving. Instead he takes 2 or 3 months off for maternity leave in the middle of this crisis.

Ben Lee

Did you even read this article? Or you just 'parroting' what you heard on 'Faux' news. #1 lie the Secretary didn't take off 2 or 3 months, get your facts.. Also, you never heard of working remotely or with a Staff.

Richard Reinders

He was on leave from Aug. till Oct

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