Today, the post-pandemic economy is being hurt by the supply-chain problems, which have been more severe than expected and will exacerbate inflation pressure. The delays in shipping are a huge part of the problem. Nike says shoes imported from China that normally takes 40 days now requires 80 days. That increases the level of needed working capital, as the shoes have already been paid for but cannot be sold until they get here.
Off the port of Los Angeles, there are 72 ships — full of things that Americans have ordered. Part of the problem is that the port doesn’t have enough berths and that’s because it is taking more time at the berths getting offloaded. Think about the costs – the crew which gets paid whether under sail or not — the taxes that still must be paid by shipowners — the same with insurance expenses — plus, the profit they would normally make if they were promptly offloaded — the extra cost must total billions of dollars wasted.
A big part of this problem are union rules – that they won’t work on Sundays – that limit shifts to only two per day, not three – trucks that don’t show up to remove containers if terminal traffic is “bad.” Our supply chain problems are becoming a national security issue and should be treated that way.
When inflation was the result of sudden waves of liquidity, it was probably transitory, but these supply chain problems are making inflation less transitory. It is also reinforcing inflationary expectations, which is THE most difficult cause of inflation. It is unacceptable for union rules to get in the way. They need to be working 24/7. If employees cannot be hired, then the National Guard should be activated. I hope the bad-old-days of union abuse have not returned.
Last year, our doctors and nurses worked countless hours for the good of our country. This year, the Longshoremen and Teamsters need to do the same . . . for the good of our country.