Supply chain issues on multiple fronts have been a major contributor to the inflationary pressure leading to rising costs across the board.  The June CPI (Consumer Price Index) numbers report a 9.1% jump in inflation, a 41-year high.  That number may feel even worse to neighbors paying to fill up a car or looking for a new place to live.  One small sign of encouragement is the price of gas fell slightly from a national average of $5.00 in June to $4.49 for the second week of July– little comfort for those who planned a summer road trip and know gas was selling for about $3.20 a gallon last summer.

Spot Cost of 40-foot Shipping Container

Some relief to the seemingly unending rise in prices may be starting to appear on the supply-chain front.  The overall cost to ship goods has dropped significantly, and the back-up of ships to unload at the ports has also fallen.  The spot price to ship goods in a 40-foot container from east Asia to the U.S. west coast dropped to $7,600 from more than $20,000 last September (see chart above).  Obviously, this is welcome news.  Immediate savings may not yet be realized at your neighborhood store, as high diesel prices are translating into fuel surcharges costing shippers 80 cents per mile.  Freight train delays are also contributing to higher shipping costs.

The moral here- although inflation looks bleak, we may be starting to see some relief on the supply-chain front and that is welcome news!

Read more about the fluctuating components of the supply-chain below and let me know your thoughts!

~ Brian Kasal- The Leadership Matrix

Click here- Freight Rates Are Starting to Fall as Shipping Demand Wavers

P.S.- Did you see my last Leadership Matrix post?  The Recession May Already Be Here

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