The Biden administration’s efforts to alleviate the supply chain crisis are a “step in the right direction,” according to Moody’s Analytics chief economist Mark Zandi.
President Biden is meeting today with port operators, truckers’ associations, labor unions and executives from Walmart, FedEx, UPS, Target and Samsung as part of his administration’s “90-day sprint” to address bottlenecks.
“There are a lot of parties involved all over the planet. It’s a logistical nightmare by definition,” Zandi said in an interview on CNN.
“It’s a complicated problem. [The ] pandemic is still on, and as long as the pandemic is still plaguing the rest of the globe, this isn’t going to be easy; it’s going to take some time,” he said.
The spread of the Covid-19 Delta variant caused major supply chain issues, Zandi said.
“It really creamed the rest of the world, particularly Asia and more specifically, southeast Asia, and that’s where a lot of these supply chains begin,” he said.
He gave an example of Malaysian semiconductor plants shutting down due to workers being sick, which in turn resulted in shortages of vehicle manufacturing compounded by trucker shortages.
“The pandemic itself has just really made things a jumbled mess,” he said.
Zandi also said as more people have been stuck at home, they are buying “all kinds of stuff.”
“You got all this stuff coming through the pipe, and the pipe is being disrupted by the pandemic, and that results in this jumbled mess. And then it’s an intricate set of relationships, you know, from the factory to the truck to the port to the container ship to the port to the truck to the warehouse,” he said.
Zandi also predicted the cost of goods will stabilize, but it may take until next year.
“Each new wave of the virus will be less disruptive than the previous one. We’ll work through these things and we’ll start to see some price moderation; same in the job market,” he said.
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