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.

Freight costs ease. Average shipping rates from China to U.S. West
Future delivery prices are an indication of the direction the market may go. They specifically exclude all taxes.