The Supply Banger
Since the world first learned of Covid-19, global supply chains have been a mess.
The NY Fed has been tracking worldwide shipping challenges via its Global Supply Chain Pressure Index (GSCPI). This index tracks the state of global supply chains using data from the transportation and manufacturing sectors.
As you will see below, 2020 landed like Thor's Hammer on a period of relatively low volatility (2018-2019). Pressure on the supply side of the global economy has been unrelenting since.
The cost of pressure
Supply chain pressure is worth measuring because it drives significant price fluctuations. A recent McKinsey article illustrates the spike in sea freight rates over the same period. You guessed it.
As supply chain pressure increased, the cost of moving goods worldwide skyrocketed.
2022 and beyond
It will take years to unwind and repair this clusterfuck. Even then, with a fraction of capacity, the supply side will remain hobbled for the foreseeable future.
Merry f'n Christmas.