A Normal Supply Chain? It’s ‘Unlikely’ in 2022. - The New York Times


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Summary of the New York Times Article: A Normal Supply Chain? It’s ‘Unlikely’ in 2022

The article discusses the ongoing global supply chain disruptions and the unlikelihood of a return to normalcy in 2022. Experts suggest that resolving the crisis will require substantial investment in infrastructure, technology, and a reevaluation of business incentives.

Key Challenges

  • Port congestion continues unabated.
  • Prices for goods remain elevated.
  • A shortage of ships, warehouses, and truck drivers persists.

Phil Levy, chief economist at Flexport, anticipates the disruptions to continue for many months, possibly years. The concept of a return to pre-disruption conditions has shifted towards accepting a 'new normal'.

Shifts in Business Practices

  • Cheap and reliable shipping is no longer guaranteed, leading manufacturers to consider relocating production closer to consumers.
  • Manufacturers may increase warehouse capacity, moving away from lean inventory management strategies.

The article concludes by highlighting the significant challenge this prolonged crisis presents to policymakers.

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With the havoc at ports showing no signs of abating and prices for a vast array of goods still rising, the world is absorbing a troubling realization: Time alone will not solve the Great Supply Chain Disruption.

It will require investment, technology and a refashioning of the incentives at play across global business. It will take more ships, additional warehouses and an influx of truck drivers, none of which can be conjured quickly or cheaply. Many months, and perhaps years, are likely to transpire before the chaos subsides.

“It’s unlikely to happen in 2022,” said Phil Levy, chief economist at Flexport, a freight forwarding company based in San Francisco. “My crystal ball gets murky further out.”

For those who keep tabs on the global supply chain, the very concept of a return to normalcy has given way to a begrudging acceptance that a new normal may be unfolding.

Cheap and reliable shipping may no longer be taken as a given, forcing manufacturers to move production closer to customers. After decades of reliance on lean warehouses and online systems that monitor inventory and summon goods as needed — a boon to shareholders — manufacturers may revert to a more prudent focus on extra capacity.

The deepening understanding that the supply chain crisis has staying power poses a daunting challenge to policymakers.

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