Message in a Bottleneck: Supply Chain Disruptions and Manufacturing Output in the United States

ABSTRACT We examine the effect of container shipping disruptions on US manufacturing output before and during the Covid‐19 pandemic. We augment maritime trade with a global production network model, where the reliability of container logistics is critical for the on‐time and full availability of inputs and the delivery of output to foreign markets. We combine a US container shipping reliability dataset with input–output and trade data to construct a novel supply chain disruption index that captures the integration of upstream and downstream linkages of the US manufacturing sector into the global supply chain. Our findings suggest that a one‐unit shock leads to a very similar response on output through the upstream (import) and downstream (export) channels. Industries adjust their inventory strategy to cope with supply chain disruptions. Container disruptions affect non‐durable industries through the downstream and durable industries through the upstream linkages. Our study highlights the importance of understanding the drivers of a resilient global supply chain.