American businesses are facing an unprecedented period of uncertainty and supply chain disruption, with transportation costs, energy, wars, and climate factors adding to the pressure on prices. For many entrepreneurs, the current situation is even more difficult to manage than the supply chain crisis during the Covid-19 pandemic.
One example is Dilworth Coffee in Raleigh, North Carolina. After a poor coffee crop in Brazil in 2024, coffee futures contracts hit record highs. The following year, global tariffs imposed by the Donald Trump administration pushed prices even higher.
The problems were compounded by the war in Iran, shipping disruptions, a shortage of containers, high costs on the Red Sea and rising fertilizer prices. Jeff Voita, founder of the national coffee distributor, said the company was facing a period of disruption it had never seen before.
The situation is not isolated to the coffee sector. Across the U.S., business leaders in various industries are reporting similar struggles. A monthly survey by the Institute for Supply Management has sparked concern among company executives, some of whom have compared the current business climate to the pandemic.
Some even say that the situation during Covid was more manageable. Today, large price fluctuations and uncertainty force companies to make difficult decisions, while consumers, worried about inflation, are less willing to face further price increases.
"This is definitely a bigger problem than Covid," said Jack Buffington, director of the supply chain program at the University of Denver, describing the situation as a problem particularly related to energy.
The Trump administration has portrayed the war with Iran as a temporary blow to the economy and argued that inflationary pressures would ease once it ended. But long-standing problems in global supply chains suggest that a return to normality could be more complicated.
President Donald Trump has said that oil prices will drop significantly after the end of the war with Iran. In a post on Truth Social, he argued that the price drop would occur soon after the conflict is resolved.
Even the Speaker of the House of Representatives, Mike Johnson, said that the issue of the Strait of Hormuz has a direct impact on energy prices and, consequently, on food costs.
But since June, the situation has changed. High fuel and shipping prices have started to affect other sectors of the economy. Core inflation rose last month at the fastest pace since April, while utility costs have continued to rise.
According to the material, oil prices have doubled since March, affected by the escalation of the war in the Middle East and the ongoing Ukrainian attacks on Russian refineries.
At the same time, transportation costs have also increased due to extreme weather events. Back-to-back typhoons closed the port of Shanghai, the world's largest container port, for two weeks, causing significant delays.
Ending the war in Iran would not automatically solve all the problems. According to the material, it would not change the situation of Russian oil exports, nor the problems created by the activity of Houthi rebels in the Red Sea and Somali pirates in the Gulf of Aden.
These obstacles have forced shipping companies to reroute ships around Africa to avoid attacks, reducing global shipping capacity by about 15% this year, according to Ryan Petersen, CEO of Flexport.
"I've worked in logistics for 25 years and I've never seen anything this bad," Petersen said.
A participant in the Institute for Supply Management survey described the current crisis as larger and more complex than that during and after Covid.
Throughout 2020, container ships remained stranded outside ports for weeks, while shortages of various products appeared on store shelves. The supply chain was virtually paralyzed before it gradually began to recover.
Today's situation is different. Transportation continues to function, but with constant disruptions, higher costs, and greater uncertainty. Prices rise, fall, and then rise again.
"The supply chain is functioning, but with much more cost, friction and uncertainty than during Covid," Brownlee said.
Jeff Voita said the current situation is even more stressful for his company. Dilworth Coffee now has to do a lot more research and pricing modeling. In the past, the company would decide on coffee sources 12 to 24 months in advance, while today supplies are planned only three to six months in advance.
Weather conditions have also played a role. This year's Super El Niño has raised questions about coffee crops in Vietnam and Brazil, two important countries for the global market.
At the same time, companies are less able to financially withstand shocks. Dilworth Coffee can't keep the same amount of coffee in stock as before, due to high transportation costs. Profit margins are tight, while consumers have less disposable income.
Sales fluctuations have also become larger. In the past, the company's monthly sales volumes fluctuated around 5%, while now the variations reach up to 20%.
"This dynamic is something new for us. How long will oil be above $6? How do we communicate this to customers?" said Voita, adding that the company's customers are also facing the same problems.
In this climate, the end of a single conflict would not be enough to immediately restore normality. Wars, transportation problems, extreme weather, energy prices, and global supply chain uncertainties have combined to create a situation that American businesses are finding increasingly difficult to predict.
