Saturday 08 March 2025
As global supply chains continue to grapple with disruptions, a new study sheds light on the economic impacts of rising delivery times and tariffs. The research, which analyzed data from US manufacturing imports and inventory levels, reveals that delays in shipping can have a significant effect on production and pricing.
The study found that between 2018 and 2024, the average delay in importing goods to the US rose by nearly three weeks. This increase in delivery times was driven largely by the COVID-19 pandemic and subsequent supply chain disruptions. However, even after these disruptions subsided, delays continued to rise, suggesting that other factors are at play.
Tariffs imposed during the US-China trade war also played a significant role in the study’s findings. The researchers found that when tariffs rose, firms shifted their production away from Chinese inputs and towards domestic or regional suppliers. This substitution effect led to a decline in imports from China and an increase in inventories held by US manufacturers.
However, as delays increased, so too did the need for inventory buffers. Firms were forced to hold more stock on hand to mitigate against the uncertainty of delivery times, leading to a rise in overall inventories. This trend was observed across multiple sectors, including manufacturing, production materials, and maintenance, repair, and operating supplies.
The study’s authors used a model to simulate the effects of rising tariffs and delays on output, prices, and inventory levels. They found that even small increases in delivery times can have significant impacts on the economy. For example, a 21-day delay in importing goods was shown to reduce output by 2.6% and increase prices by 0.4%.
The researchers also explored the effects of larger tariff increases, finding that a 19 percentage point rise in tariffs would lead to an 8.5% decline in output and a 2.1% increase in prices.
While the study’s findings may seem abstract, they have significant implications for businesses and policymakers alike. As global supply chains continue to evolve, understanding the complex interplay between delivery times, tariffs, and inventory levels is crucial for mitigating disruptions and promoting economic growth.
The study’s authors suggest that policymakers should prioritize measures to reduce delivery time variability and invest in digital technologies that can help streamline production and logistics. Businesses, meanwhile, must adapt to these changes by developing more flexible supply chain strategies and building buffers against uncertainty.
Cite this article: “Disruptions in Supply Chains: The Economic Impact of Rising Delivery Times and Tariffs”, The Science Archive, 2025.
Supply Chains, Delivery Times, Tariffs, Inventory Levels, Manufacturing Imports, Covid-19 Pandemic, Trade War, Production, Pricing, Economic Growth
Reference: Maria Jose Carreras-Valle, Alessandro Ferrari, “The Cost of Delivery Delays” (2025).
