Washington, D.C, politicians continue to propose wide-reaching solutions to the seemingly fragmented and dysfunctional supply chain. But economists at JP Morgan have effectively gone on the record stating their efforts are an exercise in futility. Supply chain relief may be coming in 2022, but not due to government officials.
“I should never do this, but I’ll make a forecast,” JPMorgan SEO Jamie Dimon reportedly said. “This will not be an issue next year at all. This is the worst part of it. I think great market systems will adjust for it like companies have.”
The JP Morgan CEO also pointed to a variety of reasons why imports are running hot and Americans are pouring an excessive amount of money into local economies.
“Keep in mind, the consumer’s buying other stuff,” Dimon reportedly said. “They can’t buy cars. They’re buying home improvement. They can’t travel internationally. They travel domestically. The spend level is very high.”
That reasoning certainly syncs with the record-setting number of cargo ships idling off the coast of California. Logistics and freight transportation experts predict the country will process upwards of 4 million more containers than it did in 2020. But even the data being used to track historically high import levels appears skewed. With idling ships topping 110 at one point on the Pacific Ocean and other regional seaports suffering delays, the container tally is yet to be fully realized in the numbers.
“Cargo doesn’t get counted until it comes off the ships, and the wait times are long enough that cargo from ships arriving near the end of each month can slip over into the following month,” National Retail Federation vice president J. Craig Shearman reportedly stated. “That is likely to continue until the congestion situation improves.”
Although lawmakers have proposed changes and the Biden Administration formed a seemingly rudderless Supply Chain Disruptions Task Force, JP Morgan’s CEO indicates the slow solution will mirror the tedious recovery from the Great Recession. Government provided no effective solutions during the Obama-Biden years, and none seem viable to date. It’s like Deja Vous all over again. Dimon, who comes across as something of a pragmatist, suggests refocusing on other aspects of the economy.
“There’s not one company I know that is not working aggressively to fix their supply chain issues. I doubt we’ll be talking about supply chain stuff in a year,” Dimon reportedly said. “I just think we’re focusing on it too much, and it’s simply dampening a fairly good economy. It’s not reversing a fairly good economy.”
Other market experts agree that the country may be experiencing the peak of the supply chain crisis as 2021 winds down. Given that federal and state government leaders neither saw the upheaval coming nor put forward any actual solutions, self-adjusting markets may not comfort truckers who were subjected to scrutiny and pressure.
Sources: jpmorgan.com, supplychaindive.com
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