Opinion: October 15, 2021. Causes of the Supply Chain Crisis

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There is currently a problem with the supply chains. There are several item scarcities in the various markets of the US and Europe. What is causing this problem? It seems that many issues at the same time are responsible for this.

First, and I believe the source of the issue is that the economies of the world are starting to recover from the COVID-19 lockdowns and demand is rising. The various government programs that have placed money in the hands of people are driving this.

Second, a rise in the fossil fuel energy prices, driven by increased demand and a decrease in development projects (mainly for political causes in the US are driving inflation and increased costs of transportation.

Third, not only the costs of transportation are higher, but, due to misguided COVID-19 vaccination policies, there is a shortage of labor in the trucking industry and in the ports where the cargo is received. At this time, there are shipping containers waiting in long lines in the West coast of the US.

This crisis is going to intensify as we approach the Christmas season, the season of highest demand for items. Also the winter is going to have an effect in the price of fossil fuels, specially, the ones used for heating homes in the northern hemisphere.

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.
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