Inflation has dropped rapidly helping the Fed and economy, but there’s a sticky source in the supply chain related to inventory gluts and weak consumer demand.
after its most recent FOMC meeting that "disinflation has begun." December's CPI was the smallest year-over-year increase since October 2021, atThe Fed is now more focused on services inflation, in particular labor prices, as it expects the pressure in goods inflation to remain downward. But the logistics issues suggest that there will be some elements of sticky inflation on the goods side of the equation.
National storage pricing is up 1.4 percent month-over-month and 10.6 percent year-over-year, according to WarehouseQuote. For shippers with inventory imbalances, Brashier says these charges could cost shippers tens of millions of dollars per quarter. Brashier warns these charges, on top of weaker consumer demand will ripple through earnings.
ITS Logistics is advising clients to avoid a hit to their bottom line by considering short-term, pop-up storage offered by third-party logistics providers and grounding operations. "This will reduce reliance on storing freight in ocean containers," Brashier said.
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