Cardinal Health CEO Mike Kaufmann told Bloomberg Nov. 9 that the company expects at least $100 million in extra supply chain costs in the 2022 fiscal year because of congested ports and pricier commodities.
He told Bloomberg that supply chain struggles are driving up the cost of manufacturing and distributing medical supplies, including gloves and syringes. Container costs rose 10 times, and commodity prices doubled over prepandemic levels in the company's first fiscal quarter, which ended Sept. 30.
Cardinals Health's shipping partners have reported full ports and too few people to work through the backlogs, Mr. Kaufmann told Bloomberg.
As a result, the healthcare services company expects added supply chain costs of $100 million to $125 million in the 2022 fiscal year, according to Bloomberg.
Mr. Kaufman said he doesn't expect the supply chain issues to be resolved this year.
"We do truly believe they're temporary, that they will come back down, it's just really hard to project the timing of when they'll come back down," he told Bloomberg.
Although supply chain issues are raising costs, they aren't resulting in shortages for the company, Mr. Kaufman said.
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