"Costs are going up across the supply chain. Raw material prices for U.S. producers are at a six-year high.
...Notably, service costs include transportation. With transportation networks struggling to keep up with demand, prices have been soaring. The Shanghai Containerized Freight Index, a composite index of 15 export routes out of China, shows shipping prices more than tripling since 2019. Closer to home, the U.S. PPI shows intermediate transportation and warehousing costs for goods rising at an 11% annualized pace over the past three months, the fastest clip in more than a decade.
...There are signs of labor costs increasing as well. The Employment Cost Index shows compensation in the manufacturing and transportation & warehousing industries strengthening on a sequential basis in Q4, while the latest ISM survey and the Beige Book report from the Federal Reserve note some manufacturers increasing wages to attract workers."
(Supplies Inspection, Sourcing Problems Limit the Pace of Economy's Rebound dated April 1, 2021 by Tim Quinlan, Sarah House, and Shannon Seery of the Economics Group of Wells Fargo Securities, LLC)
Full article can be read here: https://wellsfargo.bluematrix.com/docs/html/d35f85c1-2a44-4d8d-8224-aee994ca0ed8.html