Friday, May 21, 2021

This is Why We Are Experiencing So Many Bottlenecks in the Economy

The bottom line is that when you shut down economies around the globe for good parts of a year, you are going to get all kinds of distortions. The economy is a finely tuned instrument. Clueless politicians may think it is a simple turn-off/turn-on situation. But it is about major changes in demand and some sectors of the economy where it takes time to adjust to the new supply and demand factors.

Below is a great interview with a supply-chain services expert that will help you understand some of the transportation issues out in the field.



  1. Interesting interview. However, "going out to eat more" remains a problem. My wife and I recently completed a road trip from California to Colorado and back. Many of the usual dining places had clear staff shortages (Olive Garden, Chili's, Applebees, etc). Particularly in California and Colorado where wait times can be 1 hour or more instead of the usual 15 minutes. Even upscale restaurants in Colorado with no reservations had unusually long wait times and sparse seating due to separation. And managers frequently stated that they were short staffed. We solved some of the problem by taking convenient foods with us on the road. The middle of Utah along route 70 and 15 was a bright spot. Few masks, normal seating and great service. From Green River to Richardson to Beaver and even in St. George.

    The distortions from the hysterical mandates appear to be receding slowly and differently in different places. But never completely. We are still saddled with the TSA and the "Patriot Act" from previous hysterias.

  2. I think his vague assessment on when things will even out is telling. JIT has been a money saver when flows are normal ... now that they are NOT normal the fluctuation back will take much longer than many believe.

  3. I was talking to a young trucker who was telling me that there is a huge driver shortage because all of the older generation was retiring and there weren't enough new people to take the jobs. He said they're currently offering starting pay of $30/hr to new truckers. As a result of the shortage, they're putting much more freight onto rails, but they're not happy about that. This is in the Philadelphia area.