From one grinding halt to another. Supermarkets' empty shelves, labour shortages, cars on back order, rail yards clogged, and ships are unable to dock and unload their cargo. One bottleneck follows another. And these bottlenecks are causing prices to spiral out of control. It's not only the bottlenecks themselves that are causing prices to rise, factories and product/service providers are struggling to keep up with surging consumer demand post pandemic.
Nike is warning consumers of delays and is cutting production as further lockdowns in Vietnam if forcing workings home. Amazon is warning fourth quarter profits could be wiped out due to massive outlays for labour and spending on additional transport. Finally, Apple reckons it supply issues could cost the company $6 billion.
Here's what America's supply-chain backlog looks like close up:
To give you an idea of the delay, on September 1, 40 container ships were anchored off California, waiting for a berth. Less than three weeks later, the number reached 73. You can see the data here from the Marine Exchange of Southern California.
All of this is putting pressure on prices, and higher prices means increasing chances of higher interest rates. Having said all of this, it appears as though the worst is over, however as consumers load up their shopping cart (physical and online) for Christmas, I think we will need to wait until this year end buying frenzy is over before we have any clarity on what all of this means. For now, it's too soon to tell.