Issues that were seen across supply chains and that helped drive some of the jumps in prices that have recently affected Americans are easing.
An easy cue for how supply chains are doing is ocean shipping. Daily spot rates covering transporting a shipping container from an Asian port to a stop on the West Coast of the U.S. are down to levels lower than immediately prior to the COVID-19 pandemic upending so much of the U.S. (Those rates are quoted costs for moving a shipping container different from contracted prices.) The average is now around $1,400, but data cited in The Wall Street Journal includes an average in 2019 of near $1,500. That rate hit around $15,000 last year. The report from the Journal also notes that delays at a major shipping complex on the West Coast serving the Los Angeles and Long Beach areas are dramatically down, with the average time before what appears to be ships unloading — figures potentially including loading up — falling to under three days.
Transportation Secretary Pete Buttigieg noted recent southern California shipping developments in a recent speech. “Right now, at worst, the number of ships waiting at anchor in the Ports of LA and Long Beach is in the single digits,” he told Kentucky listeners. “And we’re often seeing that backlog completely gone, at the same time as we just saw record sales on Black Friday and Cyber Monday. Some of the Pacific Ocean shipping rates are down 80%, which ought to help lower prices that Americans are seeing at the store in a moment where we’re fighting inflation with everything that we’ve got, and helping people to get what they need without delays.” Buttigieg cited what were apparently industry negotiations in which the Biden admin was involved. “We as a country stepped up,” he said. “Our administration brought together players from across the supply chains of our country — notably including UPS. And together, we found ways to address many of the biggest disruptions.”
Buttigieg also touted a bill the president recently signed that imposed a years-long contract for railway companies and workers, which provided staff with what he cited as benefits including a pay raise and helped with ensuring critical items transported via the railways remained on track for delivery instead of stuck because workers opted to strike. On the consumer side, the Journal also notes improvements in carrying goods directly to purchasers rather than just the process of businesses obtaining their inventories. The on-time performance rate at FedEx for the last week of November was over 10 percentage points higher than the rate seen the same week in 2021.
These positive signs have emerged alongside improvements like drops in the average price of gas accompanied by consistent reporting in federal numbers that inflation is easing (partly driven by gas). In metrics from both the Commerce and Labor Departments, inflation in November was dropping. The November Commerce Department figures also showed the overall rate of wage increases on a month-to-month basis slightly outpacing the month-to-month rate of prices rising, meaning Americans could see a real jump in their purchasing power.
Image: Gage Skidmore/ Creative Commons
