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Supply Chain Worries Ease

Some companies are breathing easier as freight bottlenecks resolve, shipping costs decline and COVID-19 lockdowns in Asia end, according to The Wall Street Journal (subscription).

What’s going on: “Retailers and manufacturers struggled for more than two years as Covid-19 shutdowns, labor shortages and bottlenecks at ports, rail yards and warehouses delayed freight and drove up shipping costs. … Today, freight congestion has cleared, and ocean shipping costs have fallen close to pre-pandemic levels.”

Why it’s important: The new supply chain landscape is emerging as a bright spot in an otherwise uncertain economic picture.

However … “[S]ome manufacturers still sound cautious as shortages of key parts hold up production lines and hurt productivity.”

  • “Dave Regnery, chief executive of air-conditioning manufacturer Trane Technologies PLC, said on a Feb. 2 call that supply-chain issues had improved, but it would take ‘several quarters before the supply chain gets back to what I would call normal.’”

The NAM’s take: “Innovative operational practices and advocacy efforts for overdue regulatory updates and much-needed infrastructure investment led by manufacturers have played a critical role in shifting supply chain marketplace dynamics,” said NAM Director of Infrastructure Policy Ben Siegrist.

  • “Lower shipping costs are welcome news, but issues affecting strategic business planning and reliability remain significant concerns. The NAM will continue pushing for sensible policy to fortify manufacturing competitiveness and accelerate the engines that drive the U.S. economy.”
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