Our Supply Chain Is Hanging By A Thread

Our Supply Chain Is Hanging By A Thread

Our Supply Chain Is Hanging By A Thread

The warning signs are all there. There are container ships backed up in ports. There are huge holes and empty shelves in the big box stores. Last month, Kamala Harris warned to buy early if you want Christmas presents. Our supply chain is hanging by a very slender thread.

They may be used to empty shelves in other countries, like Russia. Here in the good ole U.S. of A., we are not. Go into any grocery store and you will see, if not empty shelves, holes in the the shelves where a stock keeping unit (SKU) is missing a package size or a flavor is missing. You may only get one choice in your favorite detergent brand. It’s all because of the supply chain. Remember the beginning of the PANDEMIC, the run on toilet paper? That was partly due to panic buying. It was also due to an abrupt change in buying habits. Since people were not going to work, corporate style toilet paper was not needed, more consumer 2-ply was needed. That is how delicately our global supply chain network is balanced.

A year and a half later and the problem has gotten much worse. Government intervention in how people work, or if they work, has totally disrupted supply chain management. Last month the Wall Street Journal reported on grocery stores not getting their orders fulfilled:

Industry executives say new problems are arising weekly, driven by shortages of labor and raw materials. Groceries including frozen waffles and beverages remain scarce as some food companies anticipate disruptions lasting into 2022. A wider range of products is running short and logistical challenges are compounding for many retailers.

Donny Rouse, chief executive of Louisiana-based Rouses Markets, said he is struggling to fill shelves as his company runs low on everything from pet food to canned goods. The chain of more than 60 supermarkets is sometimes receiving as little as 40% of what it orders, prompting Mr. Rouse and his staff to try to secure products earlier and more often. Before the pandemic, Rouses received well over 90% of its orders.

“It is difficult for customers to get everything they want to get,” said Mr. Rouse, grandson of the chain’s founder.

Our government is paying people to stay home, still. Logs don’t get cut for paper products. Factories aren’t producing and, if the stores have stock, they can’t get anyone to stock the shelves. Long Beach, California has a record number of ships (about 60) waiting to unload. The ports of Savannah, Georgia, New York and New Jersey have back ups because of the dearth of truck drivers. From Yahoo News!:

The need for workers is weighing on the trucking industry, where freight operators are struggling to raise wages fast enough to find drivers.

Eric Fuller, the CEO of U.S. Xpress (USX), said that his company has doled out 30% to 35% in total pay increases over the last 12 months — but suggested more may be needed.

“The driver situation is about as bad as I’ve ever seen in my career,” Fuller told Yahoo Finance on Monday.

Data from the Bureau of Labor Statistics showed that in the depths of the COVID-19 pandemic, the truck transportation industry lost 6% of its pre-pandemic labor force of 1.52 million workers. As of July, the industry had recovered about 63,000 of those lost jobs but still remains about 33,000 jobs short of employment levels in February 2020.

If you are looking for a job, long haul truckers make about $60k per year. Owner-operators can earn six figures. Just so you know.

New cars are on back order because the Delta Variant has shut down much of China. All cars need chips. Apparently, electric cars really need chips. No chips are forthcoming.

Because of all this prices are going sky high. Inflation is a tax on all of us. James Rosen explains that Creepy Joe Biden has a plan in this tweet:

How much you want to bet those four government agencies didn’t call in business or supply chain executives to find out best practices? Swamp creatures never invite people with skin in the game in to pick their brains. You can bet they didn’t find out about the aluminum, glass or cotton shortages:

The disruption in the supply chain is expected to last another year. Unless Creepy Joe gets involved. Then, my advice is to go semi-prepper and have a month’s worth of food and other consumer goods on hand. To paraphrase a former President, never underestimate Creepy Joe’s ability to feck up anything.

Featured Image: Fotos_PDX/Flickr.com/cropped/Creative Commons Attribution 2.0 Generic (CC BY 2.0)

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6 Comments
  • Don says:

    Maybe automakers should consider cheaper vehicles that require fewer chips and electronics. A modern day VW Bug that is just basic transportation without all of the “modules” that drive the prices of cars up and give luxury where some is not needed or requested.

  • You mean WHEN * fecks it up. I clicked on that video – and soon quit, after I heard the recommendations of the “government experts.”

    Push more electric vehicles – that require just about every component to be imported from overseas. When they can get the components, have them assembled by more union workers, so that productivity will be far less – and the final product even more a dangerous piece of junk than most of them are now.

  • John in Indy says:

    Part of the problem at Long Beach/San Pedro and LA is that the Longshoremans’ Union refuses to run the port 24/7. There are also backups there from problems loading rail shipments fast enough, on top of the “shortage” of truck drivers willing to work for the pay offered.
    Further, the containers not unloaded here are not available as empties to enable our exports to be shipped out. Note that almost all of these containers are made in China, and that they are shutting down factories because they stopped importing Australian coal to run their power plants in an attempt to control Australian policies towards China.
    John in Indy

  • […] aren’t typically a hot topic.  Yet over the last 18 months, they are an increasing point of concern not just for policy makers, but everyone.  Do we really think this is the administration who can […]

  • […] know what? I’m going to say a big fat NOPE to Micheline’s little lecture. The supply chain issues we have right now are the fault of politicians from the state to the federal level. It isn’t […]

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