Current Global Supply Chain Problems Some Experts Think can last until early 2023, continue to hammer industrial sectors from consumer discretionary to autos and housing. According to a Oxford economy Research briefing by economist Oren Klachkin, global pressures in the U.S. supply chain worsened during October after easing in September.
October saw the number of freighters waiting to unload in Los Angeles and Long Beach reached a record level. And while transportation issues actually âmoderately easedâ over the past month, it remains the most pressing supply chain issue – tracking price, activity, labor. work and inventory – based on preliminary data and forecasts from Oxford Economics.
“Preliminary data shows that logistical difficulties remained the most acute source of stress as prices, activity and labor issues increased,” Oxford Economics said. “Inventory pressures have eased slightly, but conditions remain far from optimal as supply struggles to keep up with demand.”
Oxford Economics, based in Oxford, England, provides economic forecasting, quantitative analysis, global forecasting and modeling services to a global customer base of more than 2,000 international companies, financial institutions, government organizations and universities.
By the numbers
Shipping costs fell in October but remained at a level 450% higher than pre-pandemic figures, with the total volume of sea freight received at U.S. ports reaching a record high of almost 20% as of October. above pre-pandemic levels, Oxford said. Regarding ground transportation issues, the briefing noted that the American Trucking Associations (ATA) believes that the driver shortage be “worse than thought” at 80,000.
“The Biden Administration’s Agreement to Keep the Ports of LA and Long Beach work 24/7 is a step in the right direction, but not enough to solve the current problems due to space and labor constraints, let alone the new charges on empty containers, âsaid Oxford.
In addition, manufacturing production costs have increased 40-50% year-over-year, while prices for services paid by producers have increased more than 6% year-over-year. (a record), according to Oxford. This resulted in the worsening of an “extreme imbalance” between finished products and raw materials last month.
“Inventories fell less in the third quarter than in the second quarter, but the inventory-to-sales ratio remained lower at the start of the fourth quarter than before Covid for 70% of manufacturing sectors,” Oxford said.
Things are less gloomy for employment-related supply chain issues, as job openings and overtime worked hit multi-year highs as labor cost pressures “firm” according to the briefing. Oxford cited better health conditions, school reopens and expired improved unemployment benefits as key factors in Americans returning to work. However, it may take a long time for the labor market to fully recover.
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV
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