Speed Reads

Supply Chain

Supply chain snarls are reportedly tentatively starting to ease

The supply chain problems that have flummoxed global trade and fed inflation worldwide "are beginning to recede, but shipping, manufacturing, and retail executives say that they don't expect a return to more-normal operations until next year and that cargo will continue to be delayed if COVID-19 outbreaks disrupt key distribution hubs," The Wall Street Journal reports

On the favorable side, Asian COVID-related factory shutdowns and port limits have eased, major U.S. retailers have fully stocked shelves for Christmas, and ocean freight costs are down from record highs, the Journal says. But ongoing U.S. trucking and port labor shortages are still a problem, U.S. consumers still are spending frenetically, and extreme heat or more COVID flareups could stress the supply chains again. 

"An easing of supply-chain choke points would allow production to move toward meeting strong demand and would lower logistics costs," the Journal reports. "If sustained, that, in turn, would help alleviate the upward pressure on inflation." A mixture of reduced post-Christmas shopping in the U.S. and lower output from Asian factories during the Lunar New Year in February should give U.S. ports some time to catch up.

"Some consumer demand may wane after the holidays, helping the ports begin to catch up,"  Axios agrees, "but there are three more major trouble spots on the horizon," including labor negotiations at West Coast ports next summer, new International Maritime Organization rules about reducing carbon footprints, and a shortage of shipping containers being returned to Asia. In any case, Axios says, "if goods aren't off a boat by now, it's highly unlikely that they'll make it onto store shelves before Christmas."