The latest on the global supply chain crisis

The US government is stepping up its efforts to relieve the supply chain nightmare that has led to shortages of some goods, higher prices for consumes and now threatens to slow the economic recovery.

President Biden will meet with senior officials and stakeholders today to discuss collective efforts to address global transportation bottlenecks and then give a speech on Wednesday. 

Port operators, truckers' associations, labor unions and executives from Walmart, FedEx, UPS and Target will attend the talks.

The White House will work with companies and ports on a "90-day sprint" to alleviate bottlenecks, according to a senior administration official. Some will start working 24/7 to address the backlogs.

The Port of Los Angeles will move to 24/7 service, bringing it into line with operations at the Port of Long Beach, which is already working on a 24/7 schedule, the official said. Those two ports handle 40% of container traffic in the US.

Around the world, ports are congested as a result of the rapid rebound in demand for commodities and goods as much of the global economy has recovered from the pandemic. Shipping costs have soared, and companies wanting to move goods around are struggling because there just aren't enough ships or containers available.

All the while, prices are going up for consumers.

Read more about Biden's meetings today here.

Computer chip shortages. Epic port congestion. And a serious lack of truck drivers. The world’s delicate supply chains are under extreme stress.

The supply chain nightmare is jacking up prices for consumers and slowing the global economic recovery from Covid-19. Unfortunately, Moody’s Analytics warns supply chain disruptions “will get worse before they get better.”

Indeed, the IMF downgraded its 2021 growth forecast for the United States on Tuesday by one percentage point, the most for any G7 economy. The IMF cited supply chain disruptions and weakening consumption – which has been partially driven by supply chain bottlenecks such as a lack of new cars to buy amid the computer chip shortage. 

“Border controls and mobility restrictions, unavailability of a global vaccine pass, and pent-up demand from being stuck at home have combined for a perfect storm where global production will be hampered because deliveries are not made in time, costs and prices will rise, and GDP growth worldwide will not be as robust as a result,” Moody’s wrote in the report. 

Moody’s said the “weakest link” may be the shortage of truck drivers – an issue that has contributed to congestion at ports and caused gas stations in the United Kingdom to run dry. 

Unfortunately, Moody’s warned there are “dark clouds ahead” because several factors make overcoming the supply chains particularly challenging.

First, the firm pointed to differences in how countries are fighting Covid, with China aiming for zero cases and the United States “more willing to live with Covid-19 as an endemic disease.”

“This presents a serious challenge to harmonizing the rules and regulations by which transport workers move in and out of ports and hubs around the world,” Moody’s wrote. 

Secondly, Moody’s cited how there is “no concerted global effort to ensure the smooth operation” of the worldwide logistics and transportation network.

Others are much more optimistic on the supply chain outlook. 

JPMorgan Chase CEO Jamie Dimon said Monday that these supply chain hiccups will fade quickly.

“This will not be an issue next year at all,” Dimon said during a news conference held by the Institute of International Finance, CNBC reported. “This is the worst part of it. I think great market systems will adjust for it like companies have.”