Supply Chain Stress: “Dark Clouds Ahead” Just Before Christmas

Tags: Currents World News

Currents News Staff

Get set to start hoarding again – if you’re not already. Analysts warn the supply chain troubles we’re experiencing are going to stick around for a while.

From the grocery store, to the gas station – the supply chain crisis is jacking up prices and slowing down economic recovery.

But now, the federal government is looking for ways to alleviate the stress.

“It means not only higher prices but it will take you longer to get deliveries,” said Megan Greene, Global Economist; Senior Fellow, Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School.

Economists blame COVID.

Mark Zandi, Chief Economist, Moody’s Analytics said, “It all goes back to the pandemic. The pandemic has disrupted all markets.”

“We’re seeing as we reopen the economy and demand surged, firms haven’t been able to keep up,” Greene added.

But supply and demand are only part of the issue.

“It’s partly because of factory shutdowns in China driven by Delta variant outbreaks or, now emissions targets requiring factories to shut down. On the US side, the issue is much more with labor, so a shortage of longshore workers and truckers to actually get stuff off shipping containers and into stores, onto shelves,” said Greene.

Dozens of cargo ships are idling at two of the biggest ports in the U.S.

“There are more ships than there are parking spots. We are effectively operating a cell phone waiting lot in the Pacific Ocean,” said Cmdr. Stephen Bor, US Coast Guard.

Now, President Joe Biden is seeking solutions – meeting with port leaders and their workers’ union along with some large private sector companies wednesday.

And he’s set to announce that a key port – Los Angeles – will begin working “24/7.”

But because there’s no global effort to ensure the smooth operation of the worldwide transportation network, analysts warn of a bumpy road for at least the next few months – just as the holidays are kicking off.

“We’ve got a cold winter dead ahead, and it’s going to be financially painful for people,” said Zandi.