It's quite unbelievable that supply chains still haven't recovered and are not even that close to full recovery. The size of the COVID shock has simply been significantly underappreciated. And these supply chain issues are in real terms (not just higher prices and can't be quickly fixed) - like delivery delays or lead times. I thought supply chain issues would have dissipated by now.
As long as the real costs remain higher than pre-pandemic levels, the inflation rate will remain elevated, as the inflation rate depends on the level of real marginal costs. That's what the Economic models of central banks tell us:
How much of the supply chain issues have to do with disruption from Chinese manufacturers and how much of the cost increases are due to still existing tariffs? I addition, the shift from relying on Chinese suppliers to re-shoring and/or finding other non-US manufacturers to replace that output has to be time-consuming and expensive.
You both forget all the green nonsense coming from California e.g. before you could not drive a non-compliant truck into the port area. You had to use a compliant truck, exit the port area, unhitch the container load, re-hitch to the non-compliant truck... Now you need to go all the way to parking lots on the Nevada border but there is a shortage of compliant trucks... Then you have the $250k a year earning longshoremen always wanting to strike for yet more $ or to stop further port automation...
I planted almonds on my parent's property and these sorts of disruptions mess up prices and supply and demand (as there is an overhang from the previous year's crop) as most are exported via the Port of Oakland. It got so bad, they were putting almonds on rail freight to ship them eastward...
Due to all the green nonsense in CA, I think shippers are rerouting to gulf and SE ports who have expanded their capacity. This does not help with inflation as it obviously costs more to go through the Panama Canal and adds days to sailing times, but its a longer term solution given all the problems CA creates...
It's quite unbelievable that supply chains still haven't recovered and are not even that close to full recovery. The size of the COVID shock has simply been significantly underappreciated. And these supply chain issues are in real terms (not just higher prices and can't be quickly fixed) - like delivery delays or lead times. I thought supply chain issues would have dissipated by now.
As long as the real costs remain higher than pre-pandemic levels, the inflation rate will remain elevated, as the inflation rate depends on the level of real marginal costs. That's what the Economic models of central banks tell us:
https://www.nominalnews.com/p/unintuitive-inflation-supply-wages
How much of the supply chain issues have to do with disruption from Chinese manufacturers and how much of the cost increases are due to still existing tariffs? I addition, the shift from relying on Chinese suppliers to re-shoring and/or finding other non-US manufacturers to replace that output has to be time-consuming and expensive.
You both forget all the green nonsense coming from California e.g. before you could not drive a non-compliant truck into the port area. You had to use a compliant truck, exit the port area, unhitch the container load, re-hitch to the non-compliant truck... Now you need to go all the way to parking lots on the Nevada border but there is a shortage of compliant trucks... Then you have the $250k a year earning longshoremen always wanting to strike for yet more $ or to stop further port automation...
I planted almonds on my parent's property and these sorts of disruptions mess up prices and supply and demand (as there is an overhang from the previous year's crop) as most are exported via the Port of Oakland. It got so bad, they were putting almonds on rail freight to ship them eastward...
Due to all the green nonsense in CA, I think shippers are rerouting to gulf and SE ports who have expanded their capacity. This does not help with inflation as it obviously costs more to go through the Panama Canal and adds days to sailing times, but its a longer term solution given all the problems CA creates...
That's helpful additional insight - that can prolong the current supply issues.