Transportation Secretary Pete Buttigieg says inflation should moderate once supply chains get back to normal.
"I don't think anything is permanent, but I think it's clear that this is a serious economic issue," Buttigieg told Yahoo Finance on current inflation levels. "The president has been focused on prices and the effect on Americans for some time."
To that end, the administration unveiled a new program on Tuesday designed to tackle inflation by improving data visibility in supply chains.
The initiative — led by Buttigieg and National Economic Council Director Brian Deese — is formally called "Freight Logistics Optimization Works," or FLOW. The data-sharing initiative focuses on ensuring companies have insight into what and how cargo is being moved around the supply chain.
Some of the key private companies that have signed on early are Target, UPS and FedEx.
"One thing we're hearing again and again, as we talk to the different players in our supply chain, is that there's a lack of data sharing. A lot of things you might assume are shared actually aren't. So that cargo owner for example might not actually know what containers their goods are in. The trucker might not know if a container that they're showing up to a warehouse to pick up is actually going to be there. There can even be issues when you look at those big stacks of containers about making sure that the container you want to pick up first is actually on top and not in the middle. These are the kinds of things that we can improve through voluntary data sharing agreements," Buttigieg explained.
The action plan comes as investors are growing worried about inflation — in large because of ongoing supply chain bottlenecks from the pandemic —sticking around for much longer.
A new survey of fund managers by Bank of America revealed a majority (51%) of respondents now think inflation is permanent while 42% think it is transitory.
Buttigieg is confident FLOW will help alleviate pricing pressures over time.
"What it looks like over time is less pressure on shipping, shipping times and then ultimately on shipping costs, which does mean lower prices or at least less of an acceleration of prices that people are facing every day," Buttigieg added.