Supply Chain Crisis Is Clearing Up, Meaning Prices Should Decrease Soon

(NewsGlobal.com)- Economists believe the current supply chain crisis that began more than a year ago may be stabilizing.

According to Morgan Stanley chief investment officer Lisa Shalett, the “pressures on global supply chains have eased.”

The Baltic Dry Index, which tracks the costs to ship bulk commodities, has been declining in recent weeks, back to where it was in April 2021.

Products shipped from overseas are taking less time to cross the ocean and shipping is getting cheaper. Meanwhile, retailers have been sitting on inventory to prevent the bare shelves from last year.

Flexport’s Ocean Timeliness Indicator tracks the time it takes for an item to leave its originating port to be picked up at its destination port. In October 2021, it took over 110 days for an item to make the trip from Asia to the United States. That has fallen drastically. In the week ending July 10, the trip was only taking 95 days.

The New York Federal Reserve said in January that the supply chain crisis may have peaked and might begin to “moderate somewhat” in the coming months. Seven months later, that moderation appears to be happening.

While the stabilizing of the supply chain may be bad news for company profits, Morgan Stanley said it could provide some relief to consumers waiting months for expensive products.

The influx of cash from multi-trillion-dollar spending bills gave Americans the means to buy as the country moved out of COVID lockdowns. But the goods weren’t available. The scarcity of products prompted price increases. Now with the supply chain finally beginning to ease, the prices aren’t rising at the same pace.

Some economists are hopeful that June’s 9.1 percent inflation may indicate a peak and inflation will now begin to slow down. However, consumer prices aren’t expected to drop right away.