Market Commentary

Shipping Bottleneck

Shipping

We all know that there is a huge problem in the worldwide supply chain, but what is exactly the problem. It is not a simple problem in which we can just get back to normal because normal was already showing strain in the U.S.

Over the years, the U.S. has outsourced billions of dollars of manufacturing. Much of it to China and other parts of Asia. The U.S. imports went from $293 million in 1985 to $43 billion today.

During that time span, a system of ‘just in time’ inventory control became popular and widespread. Also, the U.S. has made little investment in infrastructure from railroads, to bridge building, to new roadways, and port improvements.

All this makes for a supply chain that had little room for error. Then covid hit.