Could an End to Supply Chain Issues Be in Sight as 2021 Winds Down? Experts Appear Optimistic

Cargo ship being loaded with containers at port in Chile.
tifonimages / Getty Images/iStockphoto

Global supply-chain disruptions have been so severe this holiday season that even Santa Claus won’t be able to make his rounds this year — just kidding!. However, there are signs that the situation is finally improving.

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Those signs include everything from less port congestion and faster deliveries to declining shipping prices, CNN reported. Together, these developments have raised hopes that the supply chain crisis is easing and deliveries might return to normal sooner than expected.

Nobody is optimistic enough to suggest that there aren’t plenty of problems ahead, though — including a shortage of both workers and products that contribute to shipping bottlenecks and high inflation. But some experts do see a little light at the end of the tunnel.

“I’m increasingly confident that the worst appears to be over,” Matt Colyar, economist at Moody’s Analytics, told CNN Business. “There is data suggesting that things are improving. But there’s still a ton of uncertainty.”

Related: As Omicron ‘Aggravates’ Supply Chain and Inflation Concerns, OECD Backpedals on Global Economic Growth Report

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His comments echo those of Bloomberg columnist Brooke Sutherland, who wrote last month that the supply-chain crunch “appears to have already peaked in the U.S.,” and that “evidence keeps piling up to suggest that the U.S. is slowly but surely making progress in easing freight congestion and supply shortages.”

She pointed to an extended decline in freight rates for 40-foot containers, as well as a steep drop in the number of containers lingering for longer than nine days at the Port of Los Angeles.

Another positive sign, CNN Business noted, is that order backlogs, while still growing, are now pacing slower than before. Supplier delivery rates are also improving even amid a recent increase in new orders, production and shipments.

“This suggests the improvement is because the surveyed manufacturers’ were better able to get stuff out the door, not just because demand cooled down and the phones stopped ringing,” Colyar said.

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Meanwhile, economists at Barclays say global shipping costs appear to have peaked. They noted in a recent report that the combination of a rapid decline in container vessels waiting to unload and falling global shipping prices could lead “to some easing in supply bottlenecks.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

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