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The global supply chain was not built for this

The global supply chain was not built for this thumbnail


Wayne Kaylor knew his shipping container was parked somewhere in a Chicago rail yard. He just did not know where, and for 78 days, no one could tell him.

Thanks to roaring consumer demand, US rail yards, ports and warehouses are choked with freight, with too few people to move it quickly, causing delays and rising prices for companies and consumers. Kaylor heads Way Interglobal, an Elkhart, Indiana distributor selling refrigerators, stoves and other appliances to big-name RV manufacturers like Winnebago Industries. From May 4 to July 21, Kaylor’s shipping container holding dozens of electric fireplaces got lost in the shuffle.

“It’s crazy,” he said, noting the delay cost the company sales. “Even though everything is GPS-tagged, they lost it in the rail yard.”

California ports in Long Beach, Los Angeles and Oakland reported delays earlier this year, and this month the Union Pacific and BNSF railroads made it clear that the problem had reached inland. UP halted freight shipments and BNSF began metering them as the railroads moved to purge their metro Chicago rail yards of containers that, like Kaylor’s, had been rendered inaccessible.

Manufacturers are tacking on surcharges and bemoaning lost business, with industrial conglomerate Honeywell International blaming supply chain difficulties for a revenue hit of up to $200m. Retailers are scrambling to secure enough products to sell for the holiday season, with big chains ordering larger amounts of inventory than normal, hoping at least some of it arrives on time.

“The global supply chain was not built for this,” said Brian Bourke, chief growth officer at Seko Logistics in suburban Chicago. “They were built for seasonal surges of demand annually. When you have 12 peak seasons in every mode, things begin to break down.”
CH Robinson, a Minnesota-based logistics company, said the over-ordering has exacerbated shipping disruptions. Goods coming from China are delayed by 15 to 20 days after their arrival at US ports, and up to a quarter of intermodal shipping containers are unavailable because some are being used as temporary storage, according to the company.

Ports on both US coasts are straining. Long Beach moved more than 907,000 containers in May, the highest number since 1995. Nine out of the port’s 10 busiest months in the past quarter century have all come in the past 12 months. Across the country, the port at Savannah, Georgia moved 5.3m containers for the 12 months ending June 30, a record for the port and 20 per cent more than the previous fiscal year.

“I don’t think there’s a port in the country that hasn’t been touched by congestion,” said Todd Tranausky, a transportation analyst with FTR.

At the railroads, aggressive furloughing has left companies without the necessary staff to handle the surge in demand, Tranausky said. Rates have risen commensurately, with shipping prices up to 15 per cent higher than they were a year ago. Though he forecasted the increase will slow in the second half of the year and in 2022, “it’s not going to be, by any stretch of the imagination, a shipper’s market”.

Shoppers already are feeling the hit. With costs on the rise, companies that make everything from tissues to salad dressing have been raising prices to help make up the difference. US consumer prices in June jumped 5.4 per cent from a year ago, a fresh 13-year high after rising 5 per cent in May, according to the US Bureau of Labor Statistics.

Procter & Gamble, the company behind Tide detergent and Gillette razors, plans to raise prices on some of its products after warning of a $1.9bn after-tax hit in the year ahead from higher commodity and freight costs.

Colgate-Palmolive is also charging more. “Logistic networks are taxed, whether it’s the trucking and warehousing here in the US or ocean freight coming from Asia to the rest of the world,” chief executive Noel Wallace said on Friday.

General Mills, known for Cheerios cereal and Haagen-Dazs ice cream, has said it is boosting prices across most of its grocery categories and global markets, citing in part the rising cost of shipping. Price increases have also been implemented by Conagra, the company behind Chef Boyardee pasta and Orville Redenbacher popcorn, toy maker Hasbro, and motorcycle manufacturer Harley-Davidson, which added a 2 per cent surcharge to cover freight costs.

Kleenex parent Kimberly-Clark said it “moved decisively” to raise prices in June and the early part of the third quarter to offset inflationary pressure, having previously announced that it would increase prices on a range of its consumer goods like baby care products and Scott toilet paper. In some cases, the company raised prices by double digits.

Mike Hsu, chief executive, said Kimberly-Clark is facing “significantly higher” costs, which the company attributed to higher prices for materials such as pulp and distribution costs.

“Since we spoke in April, commodity inflation has spiked higher and our supply chain has been challenged,” Hsu told analysts on an earnings call.

While strong demand has given companies the leeway to raise prices, it remains to be seen how long people will be willing to pay up. Hsu noted that other industries have observed a reduction in spending, which could leave customers with some extra money in their wallets for consumable goods.

However, “consumers are facing broader inflation in this environment across all categories beyond consumer packaged goods,” a trend that “makes it a little more challenging,” Hsu added. Sean Connolly, Conagra’s chief executive, said the “ubiquity” of price increases in grocery stores and restaurants could soften the blow to demand.

For Kaylor, the math is simple. A shipping container fits 79 electric fireplaces. A year ago, it cost $4,500 to ship. Now if his company can even secure one, $20,000 is a good deal. That is nearly $200 more per fireplace.

“So you mark up to your customer, and it becomes a trickle-down effect,” he said. “It really is a problem for everybody.”


29 Comments on "The global supply chain was not built for this"

  1. mustang19 on Sun, 1st Aug 2021 2:06 pm 

    It’s actually just incompetence, the 7nm chips with quantum effects require more equipment, combined with there not being any warehouses or anyone caring. The land is full and that’s why societies always collapse.

  2. Duncan Idaho on Sun, 1st Aug 2021 4:16 pm 

    Florida Breaks Record For COVID-19 Hospitalizations

    At least they are first at something—
    They do excel at ripping people off, but I don’t think that has been documented.

  3. Duncan Idaho on Sun, 1st Aug 2021 4:19 pm 

    ‘It just went boom’: Florida ICU’s swamped with younger COVID victims

  4. Outcast_Searcher on Sun, 1st Aug 2021 5:08 pm 

    Is the “electric fireplace” ironic, or what.

    In the real world, though it might be annoying or disappointing, we CAN live without electric fireplaces and MOST other consumer fancy-pants products, especially in the short term, if there are temporary constraints raising shipping prices.

    Much less, longer term.

    I think the “crash” most insta-doomer types keep yelping about is actually more about adjusting to doing without some of the luxuries (and all the whining that comes with that).

  5. makati1 on Sun, 1st Aug 2021 6:06 pm 

    Duncan, more fear mongering? Isn’t there enough of that bullshit on MSM? Do YOU live in Florida and have YOU visited the hospitals there recently? If not…

  6. makati1 on Sun, 1st Aug 2021 6:10 pm 

    “Inflation” “Inflation” “Inflation” will soon replace “Cases” ” Cases” “Cases” in the “news”.

    Real inflation, not the fake government numbers will be over double digits for years, wait and see.

  7. makati1 on Sun, 1st Aug 2021 6:14 pm 

    How do you like the Davos Mafia Plan? The pain is only beginning if the serfs don’t soon revolt. But…but, those stimulus goodies are tasty and the piggies want mohr, Mohr, MOHR!!!

  8. Biden's hairplug on Mon, 2nd Aug 2021 2:14 am 

    Uproar and division in the Anglo hen house!

    “YouTube BANS Sky News Australia over videos that question the effectiveness of masks and lockdowns because they break so-called ‘Covid misinformation’ rules”

    Covid is the pretext, the real reason is the constant dissing by Sky News Australia of Joe Biden.

    Sky News is the only one who is open about its panic about China and the mortal threat that country represents to the very survival of Mao’s Lonely Continent.

    “Why China’s rise exposes Australian vulnerabilities”

  9. Biden's hairplug on Mon, 2nd Aug 2021 2:33 am 

    “Social media giants ‘are failing to deal with anti-Semitism’: Tech companies took no action on 84 per cent of abusive posts, report reveals”

    The media enabled the Jewish Century…

    …the social media are going to take it down.

    Good riddance to the 20th century!

  10. Dredd on Mon, 2nd Aug 2021 5:51 am 

    The seaport problems talked about in the article are little-to-nothing compared to what is headed their way (Seaports With Sea Level Change – 16).

  11. Duncan Idaho on Mon, 2nd Aug 2021 4:41 pm 

    “McCarthy is a loose-lipped fool, always has been. His only talents are fundraising and licking Trump’s boots.”

  12. Duncan Idaho on Mon, 2nd Aug 2021 6:55 pm 

    A message from OZ:

  13. YouFuckItSoBadItIsFunny on Tue, 3rd Aug 2021 11:43 am 

    The western world is so fucked up that it is funny. I am not sure your biggest problem is peak oil anymore. It is the lack of quality whites peoples. There is not enough Whites people to rebuild anything. All you have now is ugly pathetic parasitic reptilian trying to control the world and fucking up like always.

    Make sure you know what you are doing, because expect form Whites people the destruction of the internet grid, electrical infrastructure, water infrastructure.

  14. YouFuckedItSoBadItIsFunny on Tue, 3rd Aug 2021 11:46 am 

    Some of us are already preparting for what is next. Seet this comment from ZeroHedge

    JuliaS il y a 15 minutes

    You can see where this is going. Soon you will be given no option. This is the same extermination that Nazi’s did. Slowly at first.

    But if you’re here, that means you still have water and electricity. They haven’t banned you from commenting, or taken your internet/cell service away for not getting jabbed. You still have something worth losing, which is why these politicians are still on TV, and every business that complies isn’t burning and being smashed by angry citizens.

    I know that through the mere fact of you being here, you still have something worth losing. Make a plan for when you have nothing left. When you are cornered. When the whole country becomes a Warsaw ghetto.

    You all know where this is going. Make a plan.

  15. Duncan Idaho on Tue, 3rd Aug 2021 6:25 pm 

    “A secret question hovers over us, a sense of disappointment, a broken promise we were given as children about what our adult world was supposed to be like. I am referring not to the standard false promises that children are always given (about how the world is fair, or how those who work hard shall be rewarded), but to a particular generational promise—given to those who were children in the fifties, sixties, seventies, or eighties—one that was never quite articulated as a promise but rather as a set of assumptions about what our adult world would be like. And since it was never quite promised, now that it has failed to come true, we’re left confused: indignant, but at the same time, embarrassed at our own indignation, ashamed we were ever so silly to believe our elders to begin with.

    Where, in short, are the flying cars? Where are the force fields, tractor beams, teleportation pods, antigravity sleds, tricorders, immortality drugs, colonies on Mars, and all the other technological wonders any child growing up in the mid-to-late twentieth century assumed would exist by now? Even those inventions that seemed ready to emerge—like cloning or cryogenics—ended up betraying their lofty promises. What happened to them?”

    David Graeber is gone—
    What a loss

  16. FamousDrScanlon on Wed, 4th Aug 2021 12:41 am 

    “The global supply chain was not built for this”

    So? clog’s ass-hole was not built to be a vagina, but he still uses it as one.

    I give him extra points for ingenuity.

    Actually it should read “but his boy friends still use it as one”.

  17. Duncan Idaho on Wed, 4th Aug 2021 10:10 am 

    Some Fat Boy news:
    “The good news is that he may not run again. I’m sure he’ll either be a big Fox News star or the head of a major right wing think tank if he decides to retire, though. This kind of stupidity is extremely valuable to the burgeoning GOP neo-fascist movement.”

  18. Duncan Idaho on Wed, 4th Aug 2021 1:28 pm 

    America’s most famous pants-wetting cowards pardoned by Republican governor

    Repugs? Cowards?
    Lets not put down cowards comparing them to Repugs.

  19. FamousDrScanlon on Wed, 4th Aug 2021 1:32 pm 

    Stop Expecting The Government to Admit We’re in Collapse

    They never acknowledge what they can’t or won’t fix

    “If you think the same government that propagandizes its citizens on UFOs or healthcare is suddenly going to admit we’re in a free fall toward collapse — especially before the wealthiest finishes the job of raiding the treasury — you haven’t been paying attention.

    Any time politicians must address the subject, they will use carefully orchestrated messaging which will be repeated across news programs and social media.

    To create a unified front, their caucus steps forward to reinforce the chosen message. That’s pretty much the only time politicians appear on camera — when they have a message to deliver.

    You can expect to hear about “market contractions” or “supply chain disruptions” instead of “wealth inequality” or “resource depletion.” If you believe them, your store shelves are empty because a ship got stuck in a canal. It’s a “bubble” — a light yet temporary problem.

    It’s not that they suppress the truth, one can still find it if they dig a bit. Politicians aren’t interested in changing doomers’ minds but to keep the rest of the drones from waking up. Instead of hiding the truth, they drown it out. When one monkey flings poo around the cage, soon everything smells like shit.”

  20. Duncan Idaho on Wed, 4th Aug 2021 5:59 pm 

    US is First!
    (I must admit, I should not put them down)

  21. YouWantItFuckFaceYouHaveItNow on Thu, 5th Aug 2021 8:58 am 

    A modern civilization will never be build again because we lack intelligent masculine Whites man, because of peak oil, and global cooling.

    You cannot find one main street median willing to say something nice and encouraging about the masculine white man. It is all about the shit brown diversity, wahmen, disable children. I guess white man don’t exist. So I guess you should not expect white man to help build and maintain a new civilization. Look below if you don’t believe me:

    Immigration Minister Marco Mendicino on arrival of Afghan refugees – August 5, 2021

    Vigil held for Black man shot and killed by police in Repentigny, Quebec

    Expect pedo lego to agree with the ugly negros

    Another Whit3e man like that has given up on this society and enjoy watching it collapse.

  22. IHatePrisonEarth on Thu, 5th Aug 2021 9:09 am 

    I hate this piece of shit fake sun that damage treated wood. My patio deck and the neighbor one look like shit three year after installing the new wood. What kind of shit earth is that.

    Sun simulator odd shape march 2021

  23. Duncan Idaho on Thu, 5th Aug 2021 9:27 am 

    A Texas GOP leader railed against vaccines and masks. Then he died of covid.

    Repugs are so stupid.
    But, we are getting the genetically challenged out of our gene pool.

  24. EarthIsYoursReptlilianIWillStepAsideAsOrdered on Thu, 5th Aug 2021 11:08 am 

    I just came back from Réno-Dépôt where I bought some treated wood to finish my patio table. Inflation is really here. Stop by Super C for groceries.

    I am not sure what is going on but I am the only White man alive in the area where I live. I guess I can now beg reptilians bitches for carnal sex. Here is my pickup line. Hey baby I am the only White man left alive. What about I procreate with you and we build a race of hybrids mi-man and reptilian. Imagine that, I could become the King of the world and I have my own race build form my strong masculine White man sperm.

    Since the White man is extinct, I guess the responsibility to build a low energy civilization comes down on the shoulder of reptilians.

    It is pretty obvious by looking at the press release from pedo lego and TurdDope that the White man that does not matter. I get the message and I will sit on my ass and let the brown shit diversity, Wahmen and disable people build us a new and better world. After all the own planet earth, they should be the ones take care of it, not the Whites man because he is extinct.

  25. FamousDrScanlon on Thu, 5th Aug 2021 3:12 pm 

    “A Texas GOP leader railed against vaccines and masks. Then he died of covid.”

    Thanks Duncan. I’m seeing a few of these, ‘evolution in action’ articles everyday now. Very entertaining & instructive.

    Unfortunately, that 45 year old texass gop leader successfully reproduced, a son, before he won his Darwin Award. If the kid is half as dumb as dear dead dad, he just might end up a Darwin Award winner too.

    In a strange kinda way these people are heroes in their tribe – courage of his convictions & dying for the cause.

    Anti mask-N-vaxxing is one of the most costly forms of virtue & loyalty signalling.

    Over and over, the same refrain from people sick with covid: I wish I’d gotten the vaccine

    Darwin Awards: Evolution In Action

    “In the spirit of Charles Darwin, the Darwin Awards commemorate individuals who protect our gene pool by making the ultimate sacrifice of their own lives. Darwin Award winners eliminate themselves in an extraordinarily idiotic manner, thereby improving our species’ chances of long-term survival.”

    “So how are the Darwin Awards actually determined?

    Nominees significantly improve the gene pool by eliminating themselves from the human race in an obviously stupid way. They are self-selected examples of the dangers inherent in a lack of common sense, and all human races, cultures, and socioeconomic groups are eligible to compete.”

  26. Duncan Idaho on Thu, 5th Aug 2021 5:42 pm 

    Texas Republican Leader Dies of COVID-19 Five Days after Dissing Vaccines on social media

    Is this the same one?
    Texas is full of idiots, who knows?

    I could of looked, but why bother?
    Idiots everywhere in Texas.

  27. Duncan Idaho on Thu, 5th Aug 2021 6:48 pm 

    When the fascists get offended

    It is not about American Fascists (repugs in US)

  28. FamousDrScanlon on Thu, 5th Aug 2021 11:04 pm 

    I heart dead Covid deniers

    I heart dead Climate deniers – wildfire fried or face down flood floaters – I luvs em all.

  29. Biden's hairplug on Sun, 8th Aug 2021 8:33 am 

    “Army on standby to stock Britain’s shelves: Up to 2,000 HGV drivers from Royal Logistics Corps are on five-day to notice to deliver food and essentials to UK supermarkets due to shortage of 100,000 truckers”

    As if a war is going on. The British army is going to make itself useful for a change and supply the British population with food.

    The poor Brexiteers have a lot to explain in the coming months. In Brussels, they are trying hard to suppress Homeric laughter.

    The cohesion of the EU grew massively in strength, thanks to the Brexit-idiots.

    Unoutspoken message: “of course you can leave the EU, but have a good look first at Britain to see what the consequences are.”

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