‘A perfect storm’: supply chain crisis could blow
world economy off course
https://www.theguardian.com/business/2021/oct/02/supply-chain-world-economy-energy-labour-transport-covid
https://www.theguardian.com/business/2021/oct/02/supply-chain-world-economy-energy-labour-transport-covid
Ships waiting to unload, truckers overworked, rail
yards clogged: Inside America’s broken supply chain
https://www.washingtonpost.com/business/interactive/2021/supply-chain-issues/
https://www.washingtonpost.com/business/interactive/2021/supply-chain-issues/
Retailers’ Latest Headache: Shutdowns at Their Vietnamese Suppliers
https://www.nytimes.com/2021/09/29/business/supply-chain-vietnam.html
Supply Chain Issues Stretch into Sweatpants and Sofas
https://www.bloomberg.com/opinion/articles/2021-09-29/next-warns-supply-chain-issues-may-stretch-into-sweatpants-and-sofas
My take:
https://thehill.com/opinion/finance/570895-the-debate-we-should-be-having-about-the-federal-reserve
First, the nature and scope of supply shocks hitting American businesses appear to be far more severe and longer lasting than the Fed anticipated. The case made by Powell and his colleagues for inflation being transitory largely rested on the assumption that supply constraints would be quickly resolved once worldwide production came back online and transportation bottlenecks disappeared. Recent developments, however, suggest that it will take much longer for supply shocks to dissipate. There may even be some lingering effects that have the potential to generate persistent upward pressure on price levels.
The 21st century global supply chain, while incredibly efficient and cost-effective, was not built for dealing with rolling waves of COVID-19 surges and associated lockdowns; nor was it set up to handle increasingly frequent extreme weather events and climate change-related catastrophes. Even prior to the pandemic, the Trump trade wars highlighted the risks associated with a China-centric global manufacturing supply chain.
Going forward, it is likely that greater emphasis will be placed on building more diversified and more resilient supply chains, which will result in higher future production costs. Furthermore, the pandemic shock has highlighted the downside of lean inventories and just-in-time ordering. Fundamental reorganization of production processes and inventory management techniques are likely to lead to a sustained period of higher prices.
https://www.nytimes.com/2021/09/29/business/supply-chain-vietnam.html
https://www.bloomberg.com/opinion/articles/2021-09-29/next-warns-supply-chain-issues-may-stretch-into-sweatpants-and-sofas
https://thehill.com/opinion/finance/570895-the-debate-we-should-be-having-about-the-federal-reserve
First, the nature and scope of supply shocks hitting American businesses appear to be far more severe and longer lasting than the Fed anticipated. The case made by Powell and his colleagues for inflation being transitory largely rested on the assumption that supply constraints would be quickly resolved once worldwide production came back online and transportation bottlenecks disappeared. Recent developments, however, suggest that it will take much longer for supply shocks to dissipate. There may even be some lingering effects that have the potential to generate persistent upward pressure on price levels.
The 21st century global supply chain, while incredibly efficient and cost-effective, was not built for dealing with rolling waves of COVID-19 surges and associated lockdowns; nor was it set up to handle increasingly frequent extreme weather events and climate change-related catastrophes. Even prior to the pandemic, the Trump trade wars highlighted the risks associated with a China-centric global manufacturing supply chain.
Going forward, it is likely that greater emphasis will be placed on building more diversified and more resilient supply chains, which will result in higher future production costs. Furthermore, the pandemic shock has highlighted the downside of lean inventories and just-in-time ordering. Fundamental reorganization of production processes and inventory management techniques are likely to lead to a sustained period of higher prices.