The New CS Board

[jumanji0881]

Discombobulated -
Global supply chain crisis could last another two years, warn experts : https://www.msn.com/en-us/news/world/global-supply-chain-crisis-could-last-another-two-years-warn-experts/ar-AARWgzC?ocid=msedgdhp&pc=U531

My Comment : The Fed cannot fix supply chains, labor shortages, hoarding, or the virus. Expect more QE once the markets react negatively. QE will only exacerbate inflation. Got Gold ?

Excerpts:
Shipping accounts for the movement of at least 90% of goods around the world and the cost of transporting things by sea has rocketed in the past year. For example, the Drewry world container index measuring the cost of moving a 40ft container is 170% higher than it was a year ago. The price on some particularly in-demand routes such as Shanghai to Rotterdam has increased by almost 200%; in the case of the Dutch port to New York, the cost has risen by 212%.

His point is illustrated by the bottleneck of giant containers that has built up off the west coast of the US. With so many ships unable to dock and unload, more than 80% of the 434,000 20ft containers exported out of the Port of Los Angeles in September went out empty. Shipping companies can make up to eight times more money taking goods from China to the US, so it made sense to get the containers back to Asia rather than wait for them to be filled.

This has fulled huge imbalances throughout the system, he said: “The supply chains were discombobulated. Shipping capacity was quickly exhausted at the start of the pandemic because everyone planned for a big decline in demand but in fact there was a surge because people wanted to buy things. Then the supply side was hit hard with ports, warehouses and truck companies all short of workers.

The deterioration in relations between the US and China which led to trade tariffs and loss of trust was also having a bigger impact than hitherto recognised, he says, dislocating the mechanics of world trade that have been taken for granted for many years. Cyber-attacks and robotics have also made companies review their supply chains and source materials closer to home.