Supply Chain Issues Cause Sky High December Prices
The Consumer Price Index rose 7 percent throughout 2021, pushing up prices in December at the fastest rate in nearly 40 years, The New York Times reports. Many businesses have seen little improvement in supply chain disruptions as shipments remain stalled in crowded ports and omicron outbreaks leave work crews shorthanded. As a result, prices for consumer goods are steadily rising while demand shows no signs of slowing.
Delays and price increases on U.S. shipments can also be traced back to infrastructure facilities that have been strained by decades of underinvestment, the consequences of which are now laid bare. Though the United States is actively working to keep supply chains up and running, international shipments could be blocked by more rigid COVID-19 restrictions in countries with zero-tolerance strategies like China.
The price to ship a 40-foot container from Asia to the U.S. West coast hit $14,572 this week, down slightly from a peak of more than $20,000 in September, but still nearly a tenfold increase from two years ago, according to data from Freightos Group.
The group’s data also showed that delivery times for ocean shipments from China to the United States stretched to a record 80 days in December, up 85 percent from 2019.
Judah Levine, head of research for Freightos Group, said delays were still a reality for American importers, because of still-surging demand and continued congestion at the ports of Los Angeles and Long Beach, the gateway for many goods from Asia. Recent flight cancellations due to the omicron surge would further restrict cargo capacity and help keep rates up, he said.