business

UPS exec sees supply chain disarray extending into 2022

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By John BIERS

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It seems a "just in time" supply chian that spans thousands and thousands of miles might have a flaw.

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Inflation.

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It seems a "just in time" supply chian that spans thousands and thousands of miles might have a flaw.

Only two and a half years ago freight rates for ocean shipping were so low and there was so much over capacity shipping lines were scrapping container ships that were less than ten years old. Shipping lines like HMM teetered on the edge of bankruptcy. Shippers were combining resources such as Ocean Network Express. Now nobody is scrapping container ships and there are not enough to meet demand. Shipyards can't build new ships fast enough. This is temporary though. In a couple of years there will be overcapacity and freight rates will fall dramatically. Ships last decades but these trends are short term. Soon there will be overcapacity again. The underlying deflationary forces affecting the global economy have not disappeared. This is a temporary disruption to that trend.

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