Posted on 09/13/2021 2:55:19 PM PDT by blam
UPS, one of the world’s largest delivery companies, expects global supply chain woes to carry into 2022. The disruption to the complex web of airports, seaports, and land ports, cargo freight and container shipping lines, and trucking companies that move goods worldwide remains strained and is expected to leave a permanent scar on globalization.
Scott Price, president of UPS International, told FT that multinational retailers and manufacturers are regionalizing their supply chains:
“A lot of companies are coming to us saying ‘where is the best place to put manufacturing and assembly?'” he said. “There’s an understanding that reliance on stretched supply chains puts you at risk.”
Price, who manages the company’s international businesses, said the pandemic downturn of the travel industry had made it challenging for companies moving large amounts of cargo in the belly of passenger aircraft.
He forecasted recovery in the air travel industry may take until 2025.
Price expects multinational companies to reshuffle their factories in Asia to North or South America to shrink supply chain footprints.
“One of the reasons it [supply chain regionalization] accelerated is companies were surprised how little optionality existed during this period,” he said.
Shipping prices for the Atlanta-based logistics company said annual price increase for customers would be about 2.8%, well below the 10-year average.
In a separate interview, Price told AFP News that:
“I half-jokingly tell people’ Order your Christmas presents now because otherwise on Christmas day, there may just be a picture of something that’s not coming until February or March.'”
A few weeks ago, UPS’ competitor DHL made a similar warning about congested transpacific shipping lanes.
“We do not expect freight rates to stabilize in the near term,” according to Karsten Michaelis, head of ocean freight at DHL Global Forwarding Asia Pacific.
“The combination of a year of disruption, lack of containers, port congestions and a shortage of vessels in the right positions is creating a situation where cargo demand far exceeds available capacity.”
Last Friday, new data from ports of Los Angeles and Long Beach, California, showed vessel congestion was at a record high.
The latest word from top shippers on the frontlines is that supply chains disruptions are not waning anytime soon and have pressured producer prices higher. The Labor Department’s August Consumer Price Index print will be released on Tuesday is expected to remain elevated.
GOOD.
Redundancy is GOOD.
Even better if we bring manufacturing back to the US
With the help of government, Wall Street and the Federal Reserve, American business and consumers spent the last 40 years sending supply-chains to the cheapest possible places to squeeze out every possible penny of lower cost and debt-service possible.
Now we’ll spend the next 40 years bringing them back.
The chickens of Just In Time inventory management and de-industrializing the United States have come home to roost.
A consequence of allowing MBAs to convert what were once American corporations into rootless, global firms with no real connection to this country.
Yep. The only reason we have FedEx Ground is because UPS went on strike in 1997. Disruption creates opportunity. Always.
All because of a hyped cold virus that is lied about HOURLY!
Wake up humans.
Guess they might pull their craniums out the buttocks when they can’t get their Chinese made crap delivered instantly.
Reading Shelby Foote’s three volume set on the Civil War. If the south had half the manufacturing that the north did, we would probably be a different looking country.
I just can’t help but think the same with a large majority of it occurring in China. One of the things Grant was really good at was keeping his supply lines open to his troops.
All the preppers are quietly laughing at everyone else.
Just-in-time inventory is all about major corporations offloading risk onto their suppliers, who are expected to be able to supply stuff on demand, rather than companies maintaining proper inventories in case of sudden demand.
The MBAs are discovering that you can't reliably do that.
Government must take over the Supply System!
How’s that JIT working out for you now?
For years I’ve wondered when JIT was going to come back and bite us in the ass. Factor in moving all your manufacturing offshore and you are screwed.
The normalcy bias has again worked it magic.
Imagine a war with China and China cutting off all the things we need to run our war machine. What a very sick joke.
Post of thread!
Ping.
Imagine a Chinese invasion or blockade of Taiwan that cuts off everything we import from Taiwan.
There are a lot of "Just-In-Time" Kool-Aid drinkers. A lot. It's one thing to stretch a supply chain, it's another to believe it's going to work perfectly 100% of the time.
One consequence of the ignorant MBAs selling supply chain snake oil to companies is that they chased a lot of logistics professionals out of the career field. The companies really believed the computer program the consultants sold to them was going to figure out everything for them.
No one ever asks “Why are we not making critically supply chain components here in America?”
The retarded people running this country actually think they can outsource industry and still remain a superpower. Idiots.
About 20 years ago there was an article in one of the high-end business magazines (Harvard Business Review?) that made the argument that the primary effect of MBAs is to destroy their employers.
No. Well, none of the ones I know. They are helping and educating others.
The WW2 lesson of the Indonesian rubber plantations has been lost.
Gee, does that mean the mail order bride I ordered will be eligible for SS by the time she gets here?
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