Q&A: How will recent economic disruptions impact the holiday shopping season?

UNIVERSITY PARK, Pa. — November marks the start of the busiest time of year for retailers and shoppers alike. But how will recent developments like tariffs and the government shutdown impact the winter shopping season?

In the following Q&A, Tony Lynch, assistant professor of supply chain management at Penn State Harrisburg, explained how tariffs, the longest government shutdown on record and the grounding of the MD-11 cargo planes used by UPS and FedEx may impact Black Friday deals and product availability through the holidays.

Q: How have tariff policies affected businesses and importers in the United States, especially in light of their holiday inventories?

Lynch: The uncertainty of when and how tariffs will apply are having a significant impact on managers’ sourcing and purchasing decisions. Some importers may put off or reduce ordering goods to limit costs unless they are able to pass along those costs to consumers.

Q: The federal government just reopened after a 43-day shutdown, the longest in U.S. history. How might this impact the economy and supply chains?

Lynch: The government shutdown could impact port operations. If customs officers are not available to inspect containers, this creates backlogs and bottlenecks in supply chains. There is also an impact on transportation. Trucks waiting to load containers will have to wait much longer.

Q: UPS and FedEx grounded their fleet of MD-11 cargo planes after a plane crashed during takeoff in Louisville, Kentucky. How will that affect shipping and online and in-store inventories?

Lynch: The Federal Aviation Administration issued probably one of the fastest Emergency Airworthiness Directives grounding the MD-11s. The impact on shipping and online and in-store inventories depends on the amount of spare trucking capacity to handle the overflow in shipping. Given that commercial flights are almost back to normal operations, that would address some of the capacity issues. However, managers should assess the risks and plan accordingly.

Q: What does all this mean for holiday shoppers, both online and in-store?

Lynch: Holiday shoppers should plan to shop early; and shop local when possible.