Bloomberg columnist and professor of economics at George Mason University on the supply chain breakdown:
…some key nerve centers of the world economy have been hit by a mix of Covid and bad luck, especially in the latter part of this year. Transportation, energy and high-quality semiconductor chips all are experiencing big problems at the same time, for reasons which are distinct yet broadly related.
Start with transportation. While some Chinese ports have been dormant or operating at reduced capacity because of Covid, that is hardly the only issue. A robust trade in durable goods has placed great strain on containers, ships and port operations around the world. The price of containers has skyrocketed, and can be more than 10 times higher than it was just two years ago. In short, a lot of international trade has slowed considerably, plus some of it no longer is profitable.
In some cases, transport-related services are being rationed, as prices are being kept down — maybe to avoid alienating loyal buyers, or maybe because the sellers are not sure if the current demand shocks are permanent. Again, the net result is that a lot of trade simply isn’t happening in a timely manner. […]
Furthermore, a lot of port activity and related local transportation is labor-intensive. Many parts of the world are facing labor shortages, as people are not sure how to reconfigure their post-Covid work futures, or in some cases government benefits may be keeping them from working. That adds further delays to trade networks. […]
So on one side of the equation are trade delays, input delays, higher trade and transport costs, much higher energy prices and chip shortages. On the other side are American and European consumers, who saved enormous amounts of money during 2020 and early 2021 and are now spending it. This combination has fueled price inflation. The demand is hitting the market, and the supply can’t catch up. And it’s not just one problem that has an easy, direct fix, but rather a series of interlocking paths of economic chaos and delay.https://www.bloomberg.com/opinion/articles/2021-10-11/supply-chain-disruptions-almost-too-many-reasons-to-count