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:
— James Rosen (@JamesRosenTV) September 30, 2021
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.