How our obsession with online shopping choked the supply chain

0

And the The port of LA just changed to 24 hours a day, law?
Biden urged them to do it. And the problem is, every time someone clears one bottleneck, another becomes apparent. So they switched to 24/7 operations, but the CEO of Flexport [a shipping logistics company], Ryan Petersen, sent people to investigate and discovered that trucks do not show up on night shifts when longshoremen are working. So this 24/7 thing didn’t really help because you don’t have enough truck drivers coming in to pick up these containers.

Why is this happening? Well, because this market is completely screwed up, too, for a million reasons. Part of that is because there just isn’t enough warehouse capacity for all of these goods. The capacity available in the warehouses of the Inland Empire, where these goods are transported before being transferred to long-haul trucks, has fallen to around 3%. The ports have so many containers that it’s blocked. The warehouses where these goods go have so much material that it’s blocked. It’s like the LA freeway during rush hour.

And we haven’t even reached the stage where the goods are shipped to customers.
This is the fulfillment level, i.e. Amazon warehouses and last mile delivery, like UPS, FedEx, and Amazon’s dedicated truck drivers. They face a labor shortage, as well as a lack of trucks and warehouse capacity. The old promise of “you will receive your goods tomorrow” has in fact evaporated for many deliveries.

So basically this whole system that we’ve gotten so used to – endless variety and everything will be delivered tomorrow – is so beyond its capacity and ability to expand that you are seeing reduced inventory, reduced selection. Where [goods being entirely] Out of stock. Part of that is the “big resignation,” in quotes, which really isn’t a big resignation. These are just people who say to themselves: “Okay, I have my stimuli. I will wait. I’m going to be choosy about the job I’m taking and maybe I don’t want to go back to work for Uncle Bezos, because it’s a pretty brutal environment.

I was doing math on the back of the envelope to try to figure this out – if they have to sort a package every 14 seconds in a 10 hour shift, that’s thousands of packages a day.
They are entitled to half an hour for lunch and two 15-minute breaks. So [it’s] nine hours of absolutely solid work at the maximum rate you can sustain, basically.

When you describe the ship that goes from China to Los Angeles, you use the word “efficient”. Do you mean that in terms of energy consumption? Because to me it looks like an ecological nightmare.
If we could locate these supply chains and make them work, that would be better. Even though the highest cost of shipping from Texas to China is the cost of fuel, it is still a very low cost overall because these ships are so gigantic. It’s literally the size of the Empire State Building on its side. There are up to 10,000 40-foot containers. Each container can hold 50,000 pounds of cargo. Once you’ve put that much on a ship, the amount of fuel it costs to move any of these items is tiny. That’s a lot more fuel to drive it from the store to your house, honestly. Because you get into a two-ton vehicle to, for example, bring your shoes home from Foot Locker.


Source link

Share.

Comments are closed.