US supply chain issues are shifting and will remain in 2023 Ship’s crew

CHICAGO, May 17 (Reuters) – The U.S. supply chain is recovering from the early pandemic shocks that drove up shipping costs and tightened supplies of everything from toilet paper to pasta, but more than three years later it persists Material shortages and staffing problems.

Tariffs for trucking, ocean shipping and other transportation fell as US consumers shifted spending from expensive items like furniture, grills and big-screen TVs to travel and other entertainment, bringing relief to beleaguered shippers.

However, “there’s still a pretty big mess going on,” said Ryan Patel, senior fellow at Claremont Graduate University’s Drucker School of Management.

The labor market remains tight, which drives up costs. Elsewhere, machine parts shortages persist and cement has become difficult to find as automakers and other manufacturers keep up with demand and the US pushes ahead with infrastructure projects.

U.S. supply chains are suffering from a “long-term hangover,” said Dean Croke, chief analyst at DAT Freight & Analytics, a provider of transportation data.

Speakers from Walmart, Colgate-Palmolive, Toyota and other companies will discuss their supply chain strategies Wednesday and Thursday at Reuters Events’ supply chain conference in Chicago as inflation and interest rate hikes threaten to plunge the economy into recession.

“We still have certain sectors that are thriving and some that are declining, which has been a feature of the pandemic,” Croke said.

That’s true even within sectors, Croke added, citing recent manufacturing data that remained low even as segments like autos reported gains. Manufacturing accounts for the bulk of US truck tonne-miles, he said.

After spending whatever it took to keep store shelves stocked in the early days of the pandemic, supply chain executives must now cut costs to protect profits from falling demand, Alan Amling said , distinguished scholar at the University of Tennessee’s Global Supply Chain Institute.

For example, Target aims to reduce in-store shipping costs by establishing local consolidation centers that source inventory from local stores and pack it locally. This reduces handling costs and the number of orders shipped in separate boxes. In addition, deliveries are grouped by area to reduce delivery routes.

“We’re entering a new phase, from just trying to stay afloat to a return to an efficiency mentality,” Amling said. “That’s a really good thing for the supply chain.”

(Reporting by Lisa Baertlein in Los Angeles; Editing by Bill Berkrot)

(c) Copyright Thomson Reuters 2023.

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