Yes, many point to signs that the supply chain is showing improvement, but many warn that we might have to wait longer for any real or permanent change to take place.
For two years, experts have been saying that we must show patience when it comes to supply chain problems, everything in business comes in cycles and the supply chain is not that much different. It also has highs and lows which greatly impact flow and prices.
With 2022 ending, forecasters are again saying that everyone must remain patient with the supply chain. They preach that the situation is improving. Without a doubt, things have gotten better in the last year and the supply chain has started to emerge from the dark days of post-Covid. A year ago, there were over 100 ships waiting prolonged periods to dock at ports on the West Coast. The bottlenecks and the unrelenting consumer demand fueled soaring prices. Container rates rose to their highest levels in history and exporters started to scramble to find empty boxes.
In the last year, ocean container rates have started to finally lower with impressive double-digit drops. At this time, the rates remain higher than the shippers would like but they are lowering. Carriers have also started to make major adjustments. The supply chain made record profits over the last year, and they remain successful.
Currently, there have been inventory adjustments, especially as the holiday season arrives. Consumer spending remains strong, despite the talk of recession. Currently, it even feels like inflation is still climbing. Retailers will make a hefty profit over the holidays even with the increased prices.
Freight capacity has improved with the fasted growth in history according to the Logistics Managers Index (LMI). Companies are still scrambling to get rid of inventory. The usual peak season capacity rush did not happen this year, which is good for some shippers, but small carriers might start to suffer.
Currently, orders for new Class 8 trucks are impressive, and carriers are finally receiving long-awaited tractors and trailers. Parts and material handling systems have also started arriving which is helping ease the lengthy delays.
As 2022 ends, many see encouragement for the supply chain in the coming year. Everyone must remain patient and await more affordability.
