It seems like every day the topic of the global supply chain crisis and inflation is discussed from multiple viewpoints across every industry. When reading or watching the news today you see a lot more finger pointing and opinions than really gaining any factual insight on the issues regarding the crisis. Yes, some opinions have factual backing, but sometimes we just need to hear the facts alone in order to figure out a way to overcome and work around the current challenges.
If you have tried to buy anything in the past two years, you are fully aware of the inventory struggles companies are facing. Just take a look at the empty shelves at your local grocery and retail stores along with the Los Angeles and Port of Long Beach, and you see the evident sign of inflation. Freight containers come in twenty- and forty-foot equivalent unit sizes, but the capacity of a cargo ship is measured in twenty-foot equivalent units (TEU). Cargo ship’s average TEU range is between 18,000 and 24,000 TEU. As of November 16, 2021, a new record of 179 cargo ships were at the Los Angeles and Port of Long Beach waiting to dock or unload. That averages out to a capacity of over 3.75 million containers waiting to be unloaded.
Sea container ports need semis and/or trains to transport these containers. The United States currently has a shortage of around 60,000 drivers due to a variety of reasons. Low wages, poor working conditions, and lack of respect are key components of the driver shortage in the US. Typically, drivers get paid by the mile, so anytime a driver is idol while waiting for a container, in harsh weather conditions, or anything else that may slow them down, they are getting paid little to nothing. On top of this, some trucking companies also penalize drivers for late shipments, equipment damage, etc. There are many different fines that the trucking companies may charge directly to the driver that are out of their control. Thus, making it that some drivers end up working for free to pay off their debts to the trucking companies. These traits of the job create a very unappealing aspect to becoming a driver.
With the knowledge we have around the sea and road freight challenges, this holiday season may be very challenging for some companies. With the biggest challenge being receiving their product on time to ensure they can properly serve their customers and maintain brand loyalty. However, it’s not all gloom and doom. Even during a supply chain crisis, there are a multitude of strategies and ways that industry experts can help companies adapt and achieve their business goals.
Reach out to one of our subject matter experts today at firstname.lastname@example.org and let Bricz help you realize your supply chain potential.
Contributor: Chad Markowitz, Senior Supply Chain Consultant at Bricz