Normal supply chain unlikely in 2022, experts say

Experts predict supply chain troubles in the U.S., characterized by images of overloaded ports, will likely persist throughout the year, in part because what's needed to address the problems is a complicated undertaking, The New York Times reported Feb. 1.

"It's unlikely to happen in 2022," Phil Levy, PhD, chief economist at Flexport, a San Francisco-based freight forwarding company, told the Times. "My crystal ball gets murky further out." 

There are a number of interventions that would have to happen in order to get the supply chain back on track, such as building more ships and additional warehouses and hiring an influx of truck drivers, "none of which can be conjured quickly or cheaply," author Peter Goodman writes. 

The Times cited a report from FourKites, a Chicago-based supply chain consultancy, that showed container ships unloading goods have stalled at U.S. ports for seven days on average over the last three months, marking an increase of 4 percent from 2021 and a 21 percent increase since the start of the pandemic. That's because space is tight in warehouses as e-retailers have increased inventory in the face of soaring demand, limiting the ability to stash more goods from inbound vessels and leading to stationary ships and unattended goods piled up on port docks. Aging infrastructure, equipment shortages, and not enough truck drivers are further preventing ports from getting through the backlog.

The cost and complexity of long-term solutions has kept some companies from implementing them, instead pursuing less effective measures in the short term. The Times cited findings from consulting firm Alix Partners, which surveyed more than 3,000 chief executives and found less than half said they were taking long-term action to alleviate supply chain issues. 

The COVID-19 pandemic has accelerated supply chain woes, in part because of misjudged expectations of how the pandemic would alter consumer behavior, the Times reports. In the early months of the pandemic, manufacturers dramatically cut orders for an array of goods, assuming pandemic-related fears would limit demand. The assumption proved disastrous as people shifted their dollars, spending more on in-home goods knowing they'd be spending much more time there because of COVID-19. 

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