US Businesses Face Mounting Pressure as Energy Costs and Supply Chain Disruptions Deepen
Dragon Media News Desk
American businesses are facing mounting pressure from rising energy prices, international trade disruptions, tariffs and growing uncertainty across global supply chains. Business owners in several industries describe the current operating environment as more complicated and expensive than the COVID-19 pandemic. The war involving Iran, security threats along international shipping routes, adverse weather conditions and higher transportation costs are simultaneously affecting production, distribution and consumer markets across the United States.
Jeff Voyta, chief executive of Dilworth Coffee in Raleigh, North Carolina, says the coffee industry has faced successive challenges over the past three years. Weak coffee production in Brazil in 2024 contributed to rising international prices. Global tariffs introduced by President Donald Trump’s administration subsequently increased import costs. This year, the war involving Iran, shipping disruptions, container shortages and higher fertilizer prices have added further pressure.
Voyta, who has worked in coffee distribution for more than three decades, says the uncertainty has made long-term business planning increasingly difficult. His company previously secured coffee supplies 12 to 24 months in advance. It can now plan with reasonable confidence only three to six months ahead. Unpredictable weather and concerns about production in Brazil and Vietnam have further complicated procurement decisions.
Some respondents to the Institute for Supply Management’s monthly survey have similarly described current supply chain conditions as more complex than those experienced during the pandemic. In 2020, container ships waited for weeks outside ports while shortages of essential goods affected retail markets. Today’s supply chains remain operational, but repeated disruptions, volatile prices and unpredictable delivery schedules have made business planning difficult. These accounts reflect the experiences of particular businesses rather than a uniform assessment of every sector of the US economy.
Jack Buffington, director of the supply chain program at the University of Denver, identifies energy supply as a central factor behind the present difficulties. Disruptions to petroleum production, refining and international transportation have affected manufacturing, agriculture, logistics and consumer prices. Diesel prices are a particular concern because the fuel is widely used in freight transportation, agricultural equipment and industrial operations. Higher diesel costs therefore spread through multiple stages of production and distribution before reaching consumers.
Disruptions affecting energy infrastructure in West Asia, Ukrainian attacks on Russian oil refineries and constraints on international supplies of refined petroleum products have intensified pressure on fuel markets. Even if crude oil prices decline, diesel prices may remain elevated until refining capacity and transportation networks recover. Higher energy costs are also feeding into food prices, industrial production expenses and the cost of services.
International shipping disruptions have added another layer of pressure. Security threats in the Red Sea and Gulf of Aden have forced some cargo vessels to use longer routes around southern Africa, increasing journey times, fuel consumption and insurance expenses. Ryan Petersen, chief executive of international freight company Flexport, estimates that the use of longer alternative routes has reduced effective global shipping capacity by approximately 15 percent.
Weather-related disruptions have also affected international logistics. Two successive storms interrupted operations at Shanghai, one of the world’s major container ports, disrupting vessel schedules and cargo movements. Delays at a major production and export hub can create consequences for importers and distributors in numerous countries, including the United States.
American businesses consequently face difficult decisions about whether to pass higher costs on to customers or absorb them internally. Inflation has already weakened consumers’ purchasing power, creating the risk of declining sales if companies raise prices further. Absorbing additional expenses, however, reduces profit margins and places pressure on cash reserves. Sean Brownlee, chief executive of Ravenox, a US manufacturer of ropes, cords and straps, says businesses need a stable operating environment in which costs and supply conditions can be anticipated with reasonable confidence.
Voyta reports that Dilworth Coffee’s monthly sales previously fluctuated by approximately five percent under normal conditions. That variation has now reached as much as 20 percent. Higher freight expenses have also reduced the quantity of coffee the company can afford to hold in inventory, increasing its exposure to supply disruptions while narrowing profit margins.
The US administration has expressed expectations that energy markets could improve following an end to the war involving Iran. Business owners and supply chain specialists, however, caution that ending the conflict alone would not immediately resolve the accumulated problems. Restoring damaged energy infrastructure, expanding refined fuel supplies, securing maritime routes and returning international shipping schedules to normal could require additional time.
The current situation illustrates the close relationship between international energy markets, trade policy, climate-related risks and maritime security. Supply chain difficulties are no longer confined to individual industries or countries; they extend across interconnected global production and trading systems. For American businesses, the immediate challenge is managing rising costs, while the longer-term priority is developing alternative supply sources, adequate inventory capacity and more resilient operating structures capable of withstanding prolonged uncertainty.
