Truck rates are down, ocean carriers are charging less (See graph) and package volume is down. Does this mean we are returning to a more normal time? My answer is “no.” There are a number of new and not-so-nice headwinds or factors, affecting supply chain:
- Lower labor participation rates haven’t gotten back to 2019 levels. This is scary. Studies show there are a lot of prime working-age men, and increasingly women, that are staying home and spending 2000 hours a year playing video games. Many are stoned on prescription painkillers and may be on disability. So, unless unemployment spikes, labor shortages will continue
- More inflation and unionization. Traditionally non-union sites like Starbucks and Amazon are in the cross-hairs from small startup unions. The big unions have been mostly unsuccessful
- US oil production is unlikely to rise and refinery capacity will only decline —meaning fuel is at the whim of OPEC and Russia.
