The state of the supply chain affects both how quickly we can get the goods we need and what those goods ultimately cost. Improvements are good both for the transportation business and consumers.
Given its importance to retailers, consumer goods companies and inflationary pricing, our colleagues in Goldman Sachs Research developed a proprietary scale to measure its health.
They put together data on ships backlogged off the east and west coasts, days to delivery, shipping container and chassis street dwell times, intermodal volume and more. The goal is to try to quantify the health of supply chains between being “Fully Bottlenecked” and “Fully Open” relative to before the pandemic (February 2020).
The good news? In late April, this scale fell to a level of 1 or Fully Open, marking an official return to the pre-pandemic supply chain environment, following three years of atypical congestion.
Let’s dive into some of the details:
Why are we seeing improvements?
The key question remains whether the last stumbling blocks around congestion will soon ease – notably the still-full warehouses, as well as East Coast port backlogs. If so, it’s possible we could stay at level 1 throughout the first half of the year, at least.
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs® but may not reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.
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