The supply chain is fine, but inflation is not - The Hustle

The supply chain is fine, but inflation is not - The Hustle

Mark Dent

February 28, 2023

The supply chain, a major headache during the pandemic economy, is in much better shape.

Containers that took up to ~120 days to ship between warehouses in China and the US during the pandemic now take ~14 days, and the spot price for shipping a container from China to the US has declined from a peak of ~$20k to ~$1.2k, roughly equivalent to pre-pandemic prices.

Yet many shipping prices remain high, according to Bloomberg, contributing to inflation.

Why?

For one, China to the West Coast isn’t the only prominent shipping route. Many American goods come from Europe, where prices for shipping a container are ~3x 2019 prices.

There’s also timing:

Plus, it still costs a lot…

… to store freight and to ship it by rail or truck in the US.

It’s even gotten more expensive to build new truck trailers.

Retailers and industry leaders don’t see the prices of goods falling much until at least later this year, per Bloomberg. But logistics industry leaders are meeting in Los Angeles this week to discuss the need to restore trust in the supply chain.