What to Expect With Supply Chains in 2022

What to Expect With Supply Chains in 2022

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What to Expect with Supply Chains in 2022

 As far as supply chains go, we are still “in” the pandemic.  And supply chains are going to stay in the pandemic well into 2022.  The driving factors of demand spikes, bullwhip effects, labor shortages, political agendas and elections, Fed policy, and oh yeah…remaining pockets of Covid infection are all inter-related. What to expect with supply chains in 2022 is a complicated query!

For 2022 I expect:

  • Economic growth to continue, although at a moderated pace of 2-3%
  • Transportation networks at a macro-level to “catch-up” and normalize by EOY 2022
  • LTL operators to push for above average general rate increases and simultaneously adjust other tariff rules to discourage certain freight like overlength.  At the same time, carriers will add trucks and drivers as possible making for a potentially competitive rate environment in 2023 or when the economy slows.
  • FTL operators will see rates crest before EOY 2021.  Higher contract rates that rolled in during 2021 will hold prices above the multi-year average but growth in rolling stock as new trucks deliver predict rate softening by EOY 2022.
  • Small package operators, which are already near monopoly status, will put through staggering general rate increases for 2022 on the heels of 2021.   They are building out the future final mile networks and growing profits for shareholders.
  • Maritime operators, who as a group, have been the most disciplined of operators through this pandemic by restricting volume early and raising prices often will continue to be disciplined in 2022.  They are just making too much money not to be.  But, container flows will normalize mid-2022 and that will allow constrictions to clear and more dependable transit times to return.  Don’t expect rates to return to pre-pandemic levels…ever.

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