Supply-Chain Problems Show Signs of Easing

By Stella Yifan Xie, Jon Emont and Alistair MacDonald WSJ

Global supply-chain woes are beginning to recede, but shipping, manufacturing and retail executives say that they don’t expect a return to more-normal operations until next year and that cargo will continue to be delayed if Covid-19 outbreaks disrupt key distribution hubs.

In Asia, Covid-related factory closures, energy shortages and port-capacity limits have eased in recent weeks. In the U.S., major retailers say they have imported most of what they need for the holidays. Ocean freight rates have retreated from record levels.

Still, executives and economists say strong consumer demand for goods in the West, ongoing port congestion in the U.S., shortages of truck drivers and elevated global freight rates continue to hang over any recovery. The risk of more extreme weather and flare-ups of Covid-19 cases can also threaten to clog up supply chains again.

An easing of supply-chain choke points would allow production to move toward meeting strong demand and would lower logistics costs. If sustained, that, in turn, would help alleviate the upward pressure on inflation.