Shipping Chaos? Why? What Is Up With Our Carriers?
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The continued brittleness of our Supply Chain continues to boggle the mind and the world at large is noticing. I worry that it’s the fly in the ointment that is capping economic recovery around the world.
Apparently so does NPR. Last week the organization wrote a scathing newsletter, “How ‘Chaos’ In The Shipping Industry Is Choking The Economy.” That’s pretty direct and the article was eye-opening.
I think we’ve all noticed it by now. Chip shortages are keeping automobile companies from finishing new vehicles: a friend is waiting for his brand-new Chevy truck to get the chip it needs to run so he can take delivery. Many sporting goods are still either out of stock or double the price. Looked for a “bridge camera” lately? For the non-photography literate, bridge cameras are hybrid cameras – one lens like a point-and-shoot but controls that you’d find on a high-end digital camera. They typically have excellent zoom-in capabilities as well. The Lumix brands, at least, don’t exist anywhere. Out of stock. Everywhere.
Home Depot contracted its own container ship in an attempt to avoid delays. Their delays are definitely real. My trainer bought a refrigerator from the company, which he was told at the last minute would be over a month late. He canceled the order and bought one from another retailer with a domestic stash.
Venerable Amazon is doing better than it was in the early pandemic days, but its delivery estimates are often not accurate: either too early or too late. Now, I don’t mind if a package arrives early – I’m home all day anyway. Other shoppers may not have that luxury.
This is the part we can see from the U.S. What we can’t see, and what was highlighted in the NPR article, is that in the rush to meet pent-up demand in this country, containers are being rushed, ‘dead-headed’ back to the Far East to insure we can get more goods here for the holiday season. The problem with that is, of course, we do export items from the U.S. Our exports don’t make it onto those containers, disrupting our already tilted balance of trade even further.
There is one thing residents of the West Coast of the U.S. can see – the insane number of container ships idling off the coast waiting to find space at west coast ports. And there’s another thing that I, here on the East Coast, can also see –the shippers don’t seem to be in any kind of rush whatsoever. They’re frankly making a LOT of money and seem to have no incentive to push the “go faster” button.
I went out on a harbor cruise two weeks ago. It was hot and seemed like a good idea. The Port of Miami (which has been upgraded, along with other East Coast ports after the expansion of the Panama Canal) is not over-full. No container ships are floating offshore. But there was one enormous (and full) container ship in port. It was a Sunday. The ship was full, and no one was touching it. No overtime, no machinery running, no workers, nothing. Seriously, this is wrong. I don’t care if it’s the carriers’ faults or the unions’ fault. It’s wrong and it’s making a mess. Our soon-to-be released study on Location Intelligence will show just how little retailers and their suppliers know about the duration or nature of supply chain disruptions. They have no real ability to respond or react. This is both a problem of technology and of…complacency on the part of shippers.
The reality is Home Depot shouldn’t have to contract its own ships. New cars don’t have to sit idle at dealerships waiting for parts. We shouldn’t have to pay double for kayaks. The pandemic still is active in many countries, but it is waning in others.
Technology analysts like me are obligated to highlight how technology can mitigate problems and help the entire consumer ecosystem become more responsive. RSR is unique in that we’re not afraid to also call out problems that must be fixed through intestinal fortitude. That’s why we call ourselves the candid voice in Retail Technology. Candidly speaking, this problem can and should be fixed by the players involved. Enough.
I can’t say it more plainly than that.