4 indications that the supply chain is getting better

The new year is a time to look ahead and to reflect on where we've come from. And when it comes to the supply chain, it's been every which way but linear. The supply chain's challenges are years old as are the attempted solutions. One of the more recent strategies involved making the nation's two largest ports — those of Los Angeles and Long Beach — 24 hours a day, seven days a week operations. This directive came straight from the White House. In doing so, it provided an additional 60 hours of work to free up the backlog.

Nearly three months since this policy was enacted — and more than a year since COVID-19 largely fueled the supply chain issues in the first place, it raises the question: Have conditions improved? While no one denies that snags continue to exist and the remedies aren't working as quickly as everyone would like, things do appear to be getting better. Here are a few indications that the nation's supply chain is gaining strength:

1. 90% on-shelf availability
From grocery stores to delicatessens, products that are true staples of a business have been temporarily unavailable. But according to President Joe Biden, at a year-end meeting of his Supply Chain Disruptions Task Force, "temporary" is the keyword when it comes to merchandise. The current average for products at retailers in 90%. Before the pandemic struck, on-shelf availability was 91%.

Data from the White House suggests the supply chain is showing many signs of improvement.

2. Dwell times cut in half
A core component to improving the flow of goods and uncorking the bottleneck at shipping ports is speeding up the processes that are occurring there. A combination of carrots and sticks from the port authority and the 24/7 policy seems to be paying dividends. John Porcari, who serves as the port envoy for the Supply Chain Disruptions Task Force, told Pres. Biden on Dec. 22 that shipping containers are being unloaded and removed from stations much more swiftly. Dwell times now average approximately four days at the Port of Los Angeles. In October, when the task force was first formed, the average was nine days.

At the Port of Long Beach, the wait is slightly longer (five days) but the reduction in dwell time more significant, being down from 12 days.

3. Dip in backlogs
A major concern among both consumers as well as business owners heading into the holiday season was whether gift items would show up before Christmas, a worry fueled by diminished productivity and heavy demand. Here as well, though, backlogs aren't as deep as they used to be. Indeed, according to the Institute for Supply Management, the backlog of orders index in November reached 61.9. That's a marked recovery from 70.6, a record high in May 2021.

4. Ocean shipping prices down 25%
A major trading partner with the United States is not only China, but much of the Asian continent. Higher shipping rates have been passed on to consumers. Those costs are coming down, though. White House Press Secretary Jen Psaki informed reporters that containers are now 25% less than what they were in September.

Based on these numbers from the government, 2022 is shaping up to be a year of improvement for the supply chain and the world economy as a whole.