Starting with Bush #41, the Republican party married the concept of Free Trade. With that they signed the GATT, the WTO and NAFTA. That is why we have a supply chain that extends to China rather than the 48 contiguous states.
American society is focused on entertainment and politics - not production, peace or responsibility
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It means plenty of overtime pay and theft by the ILA.
Good article.
The Bidet gang couldn’t begin to fix this even if they wanted to...but the reality is they couldn’t care less so they can just hold press conferences announcing “victory” and, if it really gets bad they can just start pointing fingers at everybody else.
The mass media will be happy to participate in the witch-hunt.
I wonder how much government interference there is on building more ports with higher capacity.
We don’t build more refineries because we don’t believe in supply. Just “the environment”
We deserve what we get. Elections matter. Policies matter. See my tagline
I did a stint as a process engineering guy. This whole process needs to be torn down and rebuilt.
Biden’s response of “work harder” simply indicates that the only process he ever managed is Hunters graft. When I would go into an office and the manager would say they just have to “work harder”, I would tell my partner that this guy wouldn’t last the year.
The reasons you mention in your article give reasons why these two principles were sound and effective for the last two decades and why the companies that I worked for enjoyed far fewer headaches for only slightly higher shipping costs.
But now EVERYBODY is making those discoveries. We will be protected for a matter of months (at best) because of our pre-established shipping relationships. But after that, we will no longer be a star in supply chain management.
In am of age and could afford to retire right now, but my company is making it worthwhile for me to stay. Maybe I'll regret it, but I feel duty bound to hang in there a little longer.
Turn the ships around, solve the problem. Next, buy US-made products instead of enemy Communist Chinese products. Yes, that means a bit of pain to set up US manufacturing but the benefit will be freeing ourselves from funding our enemy.
Build Back AMERICAN.
Why are we importing so much?
He is right of course. The math is easy if you know the numbers to put in.
Number of containers
Number of containers per hour loaded by a crane
Number of trucks that can be processed through the terminal per hour
Time to remove the containers
Plugs and his commisars can crap in one hand and dictate in the other and see which fills first. Meanwhile the lunkheads continue to throw up obstacles to getting the job done.
This guy doesn’t need to drive. He’s a phenomenal writer and could easily take that craft “on the road”!
Thanks for this informative post!
I’ll get economics advice from the next MAGA advisor, not some truck driver.
Thanks for posting...good one.
There is an intentional slow down at the ports, and they will just blame the unvaccinated - like they do with everything else
This is the first article I've seen on this subject that actually mentions what is probably the single biggest factor in the supply chain fiasco in the U.S.: an insufficient supply of container chassis at our ports.
The guy's solutions are too simplistic. What the heck is the point of adding more cranes at a port terminal, for example, if other parts of the process aren't working efficiently enough to handle the volume of container traffic anyway?
I'll focus on a few general points here ...
1. If a trucker complains that it takes 3-4 hours (or even longer) to pick up a loaded container at a port terminal, there's a good chance the trucker is part of the problem. Most terminals I've dealt with professionally publish average truck processing times of 25-30 minutes for a single container move (i.e., dropping off a container at the terminal and leaving with no load, or arriving at the terminal with no load and picking up a container) and 50-55 minutes for a double move (i.e., dropping off a container at the terminal and leaving with another one). Port truckers laugh at those numbers because they don't include the waiting time to get into the terminal, but we'll get to that next.
2. Much of the time a trucker spends in line waiting to get into the terminal is completely unnecessary. These drivers line up early in the morning because they want to get in as early as possible, but if you go to these terminals in the middle of the day you'll often find that there are no lines. In other words ... a port truck driver who arrives at 7:00 AM when the gates open, finds himself in line behind 25 other trucks, and doesn't get into the terminal until 10:00 AM could save himself a lot of time and effort simply by arriving at 10:00 AM when the huge queue that built up before 7:00 AM is processed and dissipates.
3. Related to the previous point ... for most of these terminals, the massive queue that builds up before the gates open is no different than the long lines of nitwits who used to camp out for hours or days waiting to buy tickets to concerts or sporting events. Before the days of online ticket sales and secondary markets for these tickets, box offices eliminated these lines by handing out numbered bracelets that guaranteed the holders a specific place in line when the tickets went on sale. Port terminals can deal with their truck queues the same way by implementing appointment systems where drivers don't show up until the terminal is ready to process them.
4. Guess which group in the supply chain has historically been the most strongly opposed to an appointment system like this at a port terminal? Port truckers -- seriously. I've worked professionally on behalf of clients in the freight transportation business who have grappled with this problem for years. In one ludicrous case, a terminal operator at a major U.S. port implemented a change in their container handling process that was designed to help the terminal -- and the port truckers who did business there -- operate more efficiently. The local port trucking association sued the terminal because they said this new process violated the terms of the operating agreement for that particular port. It did, but suing over it was preposterous because the port truckers could not demonstrate that they were being harmed in any way. And here's the real kicker: After the lawsuit was settled and the terminal went back to the "old" way of doing business, the port truckers realized how much less efficient they were and begged the terminal to implement the "new" operation again. You can't make this sh!t up.
The general problem here is that a supply chain for international cargo is like a dozen different lengths of hose that are linked together to move water from one place to another. Putting length of a larger hose anywhere in this chain of hoses doesn't do any good unless ALL of the links are replaced with sections that are the same size as the biggest one.
It will end at some point, but probably not with the same systems for transport, and not very soon.
Cranes cost more than trucks.
Following
First, a big part of the problem is the modern manufacturing principal of “just in time” inventory. This is a “risky” concept designed to lower inventory costs and improve profits. It requires dedicated parts & materials suppliers who are fully committed to their client's success. It also requires a dedicated supply transportation chain. The shut down of business in all parts of the world destroyed the ability to manufacture and ship parts.
Let, me amplify a little on this supply transportation problem. Before the pandemic, if high value and critical parts were needed quickly they would be shipped via air-freight in the holds of passenger airplanes from China. When the pandemic hit, passenger flights were canceled and so the amount of air freight capacity quickly reduced. Also ports were closed as the pandemic swept ports world wide.
Next, a long time I go I was a casual card carrying member of the ILWU (yes, the longshoreman's union). They made it incredibly hard to get anything but a casual card. They wanted a shortage of labor as it helped them boost crane operator salaries to (or higher than) those of doctors and other white collar professionals. The quantity of ILWU members is limited by the union rules and they are a tough union known not not caring about anything but their members pocketbooks.
Now we get to trucking. The assault on independent owner operators and their livelihood has been relentless. Let's look at California AB-5, since the Port of LA seems to be focal point. AB-5 is about making independent contractors into “employees” to make them easier to unionize and to get them to make many more tax and tax-like payments to the State of California. Combine this with increased in state and local fuel taxes and with mandates on converting portions of the trucking fleets into electric vehicles shows why some wonder about their future as truck drivers, especially independent driver owners.
Demographics. The workforce has a real older demographic bulge in many critical supply train industries. Part of it is the baby-boomers, part of it is unions, and part of it is companies retention/hiring policies. So many older people I know, based on Covid shutdowns, crazy work rules, etc. have decided retirement to get out of the craziness is not a bad option. This is especially true for those that have good union pension plans or have equity in assets they can sell (like a tractor trailer rig).
Next let us look at government economic policy and how that plays into the demographics. I know people who when their jobs were ended because of government Covid business closures, lost their health insurance and lost their salaries or income streams. Many of them opted to go on retirement and social security and medicare to make ends meet. Once you start drawing social security (especially before your full retirement age) should you be foolish enough to go back to work, you will find out that social security drops your payments dramatically based on how much you earn. It is a pretty steep tax that discourages going back to work.
Next let's look at the Port's. What are the Port's doing. The Port of LA has been recently facing a huge backlash from areas near the ports. They have been having containers and trailers to park in local neighborhoods, just to get them out of the docks and holding areas. So much so that neighborhoods have complained and the State of California has looked for public lands where containers can be temporarily stored. Storing containers on trailers contributes to shortage of trailers making it more difficult for truckers to move to their destinations and more difficult to find other trailers that can be used to unload containers onto. Right now there is a huge shortage of trailers, as too many are being used for storage rather than transport.
So in another move the Port of LA has gone to 24/7 operations. The ILWU really wasn't happy about that. Furthermore, the Port recently imposed certain fee surcharges based on how long a container stays on the docks. This means that freight forwarders to avoid huge charges need to minimize the time their containers are on Port property. So even if they can't get them to where the goods need to go, the freight forwarder will get the container on a trailer and temporarily park it off of Port property. Hence contributing factors to unhappy neighborhoods and a shortage of trailers. Also some ships are not docking unless they know their their cargo will be unloaded quickly.
Let's not talk about the Covid vaccination mandates and how that is setting with those who work in the supply chain as that is a whole new set of issues.
There are so many interlocking and structural problems with the supply chain and the manufacturing/assembly process that solving them requires skillfully and creatively balancing all kinds of competing goals. Government is not very good at that kind of thing.
That is why this supply chain problem will not end soon.