This Is Why the Supply Chain Crisis Can’t Be Solved

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A 20-year old Class A truck driver, Ryan Johnson, published an article on Medium explaining that “nothing is going to change in the shipping industry.” After you read this, you will feel helpless. The crisis is very serious.

First, most trucking companies won’t touch shipping containers. There are long lines to get in, to wait, and to get out. One line alone can take eight hours of waiting. Most port drivers are not paid by the hours, they’re ‘independent contractors’, leased onto a carrier who is paying them by the load. They only get paid a set amount no matter how long they wait.

When COV hit and they could only handle about 2/3rds of what they handled before, they took a huge pay cut. They were working 12 hours a day.

Earlier this summer, railways shut down their yards and they haven’t caught up. There are lots of shortages. One critical shortage is the container chassis (the trailer the container sits on). They are essential but there is a backlog. Drivers sit around, sometimes for days, waiting.

Containers are pulled out of ports and dropped anywhere because ports are desperate to get them out so they can unload new boats. When this happens, there is no plan. Eventually, the ports will not be able to move the containers. The priority is not delivery, it’s to clear the ports.

When containers do get to warehouses, they have to be unloaded by hand since there are no pallets, and the warehouses laid off people when the pandemic hit and they are short-staffed.

What used to take 20-30 minutes now takes 3-4 hours.

Freight drivers cannot pick up as much freight as they used to and freight simply isn’t moving.

Most freight moves cheaply but those days are coming to an end.

Owners of shipping and carrier companies won’t invest in the needed infrastructure because they make more money this way.

Mr. Johnson writes, “What we have is a system with a limited amount of trucks and qualified drivers, many of whom are already working 14 hours a day (legally, the maximum they can), and now the supposed fix is to have them work 24 hours a day, every day, and not stop until the backlog is cleared. It’s not going to happen. It is not physically possible. There is no “cavalry” coming. No trucking companies are going to pay to register their trucks to haul containers for something that is supposedly so “short term,” because these same companies can get higher rate loads outside the ports. There is no extra capacity to be had, and it makes NO difference anyway because If you can’t get a container unloaded at a warehouse, having drivers work 24/7/365 solves nothing.

“What it will truly take to fix this problem is to run EVERYTHING 24/7: ports (both coastal and domestic), trucks, and warehouses. We need tens of thousands more chassis, and a much greater capacity in trucking.

Many supply chain workers are paid minimum wages and any point that fails bottlenecks the whole system. Truckers aren’t going to work without guaranteed wages or facing a possible loss of money.

There are no laws compelling the companies to do anything and every business is reliant on transportation.

No one in the supply chain wants to pay to fix it.

“At the point we are at now, things are so backed up that the backups THEMSELVES are causing container companies, ports, warehouses, and trucking companies to charge massive rate increases for doing literally NOTHING. Container companies have already decreased the maximum allowable times before containers have to be back to the port, and if the congestion is so bad that you can’t get the container back into the port when it is due, the container company can charge massive late fees. The ports themselves will start charging massive storage fees for not getting containers out on time — storage charges alone can run into thousands of dollars a day. Warehouses can charge massive premiums for their services, and so can trucking companies. Chronic understaffing has led to this problem, but it is allowing these same companies to charge ten times more for regular services. Since they’re not paying the workers any more than they did last year or five years ago, the whole industry sits back and cashes in on the mess it created. In fact, the more things are backed up, the more every point of the supply chain cashes in. There is literally NO incentive to change, even if it means consumers have to do holiday shopping in July and pay triple for shipping.”

He doesn’t see any hope and predicts it will get a lot worse. Meanwhile, our government is planning reparations for illegal aliens and they pour in by the millions. Money is going for ridiculous fake infrastructure and they waste time on meaningless laws that won’t help anyone but a handful of Democrat voting blocs. And what is Biden doing? Nothing! He doesn’t even know or care what the problem is. All he worries about is making truckers buy electric trucks they can’t afford or use efficiently.

Read the article on this link.

 


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