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