In our previous article, we covered how the global pandemic has affected manufacturers and shipping firms in Asia. Today, we’ll discuss the impact COVID-19 has had on the domestic supply chain.
Shipping problems are not unique to Asian markets. Here in the United States, the coronavirus has reduced the number of longshoremen, truck drivers, and rail workers. Between the shortage in American personnel and the volume of imports coming into Los Angeles and Long Beach, cargo ships often have to anchor for a week or more off the coast before they can come into either port and unload.
A lack of longshoremen at destination ports means vessels cannot be unloaded in a timely manner, and it’s forcing some operations to cancel voyages. In turn, this means empty cargo containers cannot be cycled back into the shipping chain, making the container shortage even worse.
Could shipping firms reroute their vessels to ports besides Los Angeles and Long Beach? Yes. However, dock workers are already overwhelmed in other ports and a change in destination would increase ocean transit delays.
There are about 80,000 fewer truckers this year compared to 2020. While COVID-19 has been a contributing factor to the drop-off, many truckers are also leaving the workforce because the U.S. Department of Transportation set the maximum number of hours that truckers can work per week. Since drivers are usually paid by the mile, they cannot earn as much as before. Thus, they’ve either left for greener pastures or retired.
The trucker shortage, however, is likely to deepen. Almost 60% of all current drivers are 45 or older, and nearly a quarter of truckers are over 55. Prior to the coronavirus, there were 14 million job openings for drivers, but only 1.9 million hires were made in 2019. Since March 2020, there has been a 40% decrease in driver training because of smaller classes or commercial driver’s licensing schools have closed.
Fewer drivers means fewer goods moving overland to warehouses and store shelves. In other words, lead times stretch out longer and shortages continue.
Many Lean Six Sigma black belt types who mastered “just in time” supply chain management have seen their training and certifications upended by the coronavirus.
This is leading to a rethinking of lean inventory. For instance, manufacturers of computing equipment may keep a higher stock of chips in reserve. This change would build resiliency into their organizations and lessen the effects of a future shortage. Companies would spend more on inventory, but then again, lean supply works only if manufactured products and their components are readily available.
Strengthening the Chain
Cable Plus has taken steps to improve our supply chain and shipping services. While there will continue to be disruptions to the overall supply chain for some time, we want to assure you that Cable Plus will continue to provide you with the right solutions at the right price — right away.