Inflation is higher because of the surge in logistics costs. It is not the only reason, but it is a key rationale for the transitory inflation story. The choices made last March are haunting a global economy that is now in recovery. The price of shipping as measured by different freight indices have exploded to the upside although there may be some evidence that the positive acceleration has slowed.
The Fed is optimistic that these increases are temporary like the logistical price behavior after the GFC; however, a flattening of rate of change is not the same as a price reversal. Additionally, warehousing and inventory costs are increasing. Solving just-in-time shipping issues leads to other business costs.
If you are tracking transitory inflation, these logistical indices should be front and center with any discussion.
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