Supply chain woes to continue: BofA Global Research

Supply chain disruptions caused by the COVID-19 pandemic could severely worsen this year to another level, reported BofA Global Research.

The industry research report issued on Thursday presented a pessimistic outlook. Analysts at the Bank of America said the many issues seen in the U.S. are only the beginning, such as the lack of workers unloading sea freight containers. "These issues will lead to a ripple effect, with the worse coming in the final three months of the year or as soon as next year in Q1."

Citing comments made during the Bank of America's industry software and automation summit, discussions revolved around the data acquired from supply chain technology. For example, an internal employee was cited quoting a warning from Supply Chain Insight founder Lora Cecere that empty shelves are expected for retailers' Christmas season.

Other concerns by investors include inflation prompted by continual supply chain disruptions and could last longer than expected. The rising prices of sea freight shipping have also eaten into company profits. With the COVID-19 pandemic impeding economic resurgence, investors' concerns include the Fed moving to increase interest rates.

With increased costs on all sides, the institution reported that company inventory and logistics had become increasingly automated as enterprises sought to cut costs.

On the other hand, companies resilient enough to weather the supply chain disruptions are often those with more resources and capital for faster execution of operations. As such, analysts say supply chains must aim to become more robust and resilient.