There are signs the tide may be turning even as challenges continue in some sectors.
A year ago few people outside the shipping or manufacturing industries had never heard the term supply chain.
But now “supply chain issues” are front and center in most investors’ vocabulary, and when it comes to the outlook for inflation, supply chains are seen as one of the primary factors that will help determine how fast price pressures cool off from 40-year highs.
Global supply chains are the networks between companies and their suppliers needed to turn materials into the products they sell. Massive supply chain shortages emerged in the wake of pandemic lockdowns that shut businesses around the world and kept workers at home.
There were hopes that supply chain issues would start to abate in the first half of 2022 as the effects of the pandemic became contained in more countries. But other events, such as the war in Ukraine, have added new bottlenecks. And with lockdowns in Shanghai and other key cities across China, pandemic-driven snags are hurting supply chains again.
Whether it was Tesla (TSLA) missing key materials for production, asset manager Aberdeen (AABVF) postponing an acquisition due to a lack of paper, or the current baby formula shortage in the United States, supply chain issues have been hurting both consumers and companies as rapidly reopening economies have overwhelmed the system.
Across a wide spectrum of industries, companies have been trying to get a handle on when supply chain logjams will improve, but it’s been a moving target virtually everywhere.
“No one really knows,” says Morningstar senior equity analyst Michael Field, who covers shipping and logistics. “Nearly every company has supply chain issues. The number of companies doing anything about it is far fewer.”
Mentioned: A. P. Moller Maersk A/S (MAERSK B), Aberdeen International Inc (AABVF), Bayerische Motoren Werke AG (BMWYY), Tesla Inc (TSLA), Volkswagen AG (VWAPY), General Motors Co (GM), RH (RH), Restaurant Brands International Inc (QSR), BJ’s Wholesale Club Holdings Inc (BJ), Williams-Sonoma Inc (WSM)
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