Global Supply Chain Pressure Reaches Highest Point Since January 2023

Global supply chain pressure is at its highest level since January 2023, according to data released by the Federal Reserve Bank of New York.

The Global Supply Chain Pressure Index (GSCPI) rose to 0.68 in March, up from a revised 0.54 in February, according to the New York Fed’s website.

The figure for March is the highest since the 1.09 recorded in January 2023, according to an Excel spreadsheet released along with the update.

The GSCPI reached its recorded high of 4.49 in December 2021, per the spreadsheet. The Index’s data goes back to January 1998.

The GSCPI uses data from the transportation and manufacturing sectors to gauge the state of global supply chains, according to the website.

A zero in the index indicates that it is at its average value, while a positive value indicates higher global supply chain pressure, according to a staff report on the GSCPI.

PYMNTS reported March 16 that the war in Iran was pressuring the freight sector and that the geopolitical risks of the Middle East engagement had already reshaped global trade patterns around air freight and shipping, directly impacting energy supply chains as well as other critical high-value goods like electronics and pharmaceuticals.

While the current trade flow shifts resemble earlier shocks such as Russia-Ukraine and the Red Sea attacks, they are concentrated around a much more central trade checkpoint: the Strait of Hormuz, where ship attacks and security risks reduced non-Iranian sea traffic to near standstill.

Earlier in March, PYMNTS reported that geopolitical tensions in the Middle East were disrupting physical supply chains and critical digital infrastructure. For example, seven of the world’s largest maritime insurance mutuals announced that they would automatically terminate their risk insurance coverage for ships entering the Persian Gulf.

Rising costs in fuel and logistics have led to companies introducing or increasing their fuel and logistics-related surcharges. According to recent reports, Amazon, the U.S. Postal Service (USPS), FedEx and UPS are among the organizations that have done so.

When announcing the fuel charges it has scheduled across multiple fulfillment services, Amazon said: “Elevated costs in fuel and logistics have increased the cost of operating across the industry.”