The Sources of Global Supply Chain Tensions

Figure 1.

Non-Technical Summary

Global supply-chain disruptions have become a central concern for policymakers, as the Covid-19 pandemic and disruptions to maritime shipping routes have shown how sectoral shortages can propagate through production networks and affect activity and inflation. Yet an important question remains: which supply-chain disruptions generate persistent inflationary pressures? Common indicators such as supplier delivery times and shipping costs are useful for tracking supply-chain stress, but provide limited information about its underlying sources. Similar movements in these indicators may reflect economically distinct disturbances, with potentially different macroeconomic consequences.

We distinguish three sources of global supply-chain tensions within a common empirical framework. Transportation shocks disrupt logistics and shipping capacity, while input-production shocks reduce the availability of difficult-to-substitute intermediate inputs; a third shock captures congestion associated primarily with expansions in global activity. The key distinction between the two adverse supply shocks comes from transportation costs: both lengthen supplier delivery times and reduce economic activity, but transportation disruptions raise freight costs, whereas input-production disruptions lower them as weaker production reduces demand for transportation services. This allows us to identify the source, rather than only the intensity, of observed supply-chain tensions.

Using this structural decomposition, we construct the Global Supply Chain Tension Index (GSTIX), a monthly measure of supply-side tensions covering 1969–2025. GSTIX separates transportation from input-production tensions and captures the dynamic effects of both current and past disruptions. Positive values indicate above-average tensions, while negative values capture periods of easing as adverse disruptions unwind. The index can therefore track not only the build-up of supply-chain stress but also its persistence and normalization over time. GSTIX is regularly updated and publicly available through the Banque de France data portal.

Figure 1 summarizes the historical evolution and changing composition of global supply-chain tensions over more than five decades. The decomposition identifies numerous episodes of tightening and easing, with substantial variation in the relative importance of transportation and input-production tensions. A few examples illustrate these patterns.  During the rapid expansion of global trade in 2003–04, associated in part with China’s integration into the world economy, transportation tensions increased as trade pressed against available shipping capacity, while input-production tensions eased as global manufacturing capacity expanded. The pandemic shows a different sequence: input-production tensions initially dominated amid factory closures and shortages of intermediate inputs, before transportation bottlenecks became increasingly important as production and trade recovered. The subsequent normalization of global supply chains appears as a pronounced easing of supply-side tensions, followed more recently by renewed transportation tensions during the Red Sea crisis. These episodes illustrate how similar levels of overall supply-chain stress can conceal very different—and changing—underlying sources.

To assess the macroeconomic consequences of these global shocks, we feed the identified transportation and input-production disturbances into a second-step model of the U.S. economy covering activity, inventories, prices, labor-market conditions, and the one-year Treasury yield. Both shocks are contractionary and inflationary, but their persistence differs markedly: transportation disruptions resemble a comparatively transitory cost-push shock, whereas input-production disruptions generate more persistent effects on inventories, economic activity, unemployment, consumer prices, and the monetary-policy response. The pandemic illustrates this distinction: transportation-related inflationary pressures faded as logistics normalized, while input-production disruptions remained inflationary for longer. The broader lesson is that the intensity of observed supply-chain stress is not sufficient for assessing its macroeconomic consequences: its source matters.

Keywords: Global Supply Chains, Transportation Shocks, Input-production Shocks, Structural Vector Autoregressions, Inflation Persistence, Monetary Policy, Congestion..
Codes JEL : C32, E31, E52, F60, R40