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The US supply chains have been completely turned upside down during the past 12 months. Widespread shortages persist as the impacts of the health crisis, extreme weather conditions, factory fires, the blocking of the Suez Canal, a container ship shortage, and other logistics woes are still causing disruptions in both production and delivery of a wide range of goods. Prices, on the other hand, have been continuously climbing and hitting new record highs.
Many factors are contributing to the worsening of the supply chain crisis, such as the current global shortage of semiconductors. Chips have suddenly become a very scarce commodity, but their shortage potentially affects just about any company adding communications or computing features to their products. From video games and cars to cash registers and kitchen appliances, the chip shortage is also triggering the shortage of many other essential products, since every aspect of human existence is going online, and every aspect of that is running on semiconductors.
Even before the Ever Given got stuck in the Suez Canal, global supply chains were already being pushed to the limit, which, in turn, made it significantly more expensive to move goods around the world and sparked shortages of everything, from fitness equipment to cheese at a time of exceedingly heated demand. Over 80 percent of global trade by volume is moved by sea, and the disruptions already added billions of dollars to supply chain costs.
According to the S&P Global Platts, the median cost to ship a 40-foot container jumped from $1,040 last June to $4,570 in March. In February, container shipping costs for seaborne US goods imports amounted to $5.2 billion, compared to $2 billion during the same period in 2020. Of course, all of those expenses add up and they will be translated into increased risks of rising inflation – a nightmare scenario for Wall Street. Investors are worried the supply chain chaos may lead to the beginning of a new era in financial markets because a spike in prices could force the Federal Reserve to raise interest rates much sooner than expected. However, on Main Street, it means things are about to get a lot more expensive.
As US consumers get vaccinated and receive their stimulus checks, further increases in demand are expected to occur, but companies may not be able to seize the opportunity. According to a survey performed by the Institute for Supply Management, the supply-demand imbalances are likely to be aggravated in multiple areas as the economy reopens. Purchasing managers said their companies are already suffering from depleted inventories, price increases, higher rates of delinquent shipments, and longer lead times for orders. Many sourcing experts who are managing suppliers are warning that the outlook is grim: They expect disruptions to last for longer than 12 months.
On top of that, considering that in 2021 alone, US seaborne imports were up by nearly 30%, supply chain specialists are arguing that the rise in imports in the United States has contributed to a worldwide container shortage. Therefore, as the US economy opens up and the government continues to pump a lot of financial support into it, with $1,400 stimulus checks on hand, Americans are ready to spend. But in face of all the mentioned challenges, you should expect to see a limited variety of products, scarcity of a number of goods, and, evidently, exorbitant prices. In this video, we gathered a list of products and materials that will become or already are very hard to find. So get your wallets ready because the hyperinflation era is here.
Epic website: https://www.epiceconomist.com”