Why America Is Choking Under An Everything Shortage

[hanselthecaretaker]

America Is Running Out of Everything

The global supply chain is slowing down at the very moment when Americans are demanding that it go into overdrive.

www.theatlantic.com

Looks like the chickens are coming home to roost. Maybe it’s about time manufacturing does too instead of still relying on the terrible place called China for everything.

 

[BrawlMan]

America Is Running Out of Everything

The global supply chain is slowing down at the very moment when Americans are demanding that it go into overdrive.

www.theatlantic.com

Looks like the chickens are coming home to roost. Maybe it’s about time manufacturing does too instead of still relying on the terrible place called China for everything.

​

 

[SilentPony]

I mean this seems very regional. Here in St. Louis, Im fine. I go to the store, they have soup. I go to get an oil change, they have oil. I go to Games Workshop for paint, they have paint.
Aside from the original run on toilet paper and masks in 2020 things have been just fine.

 

[Xprimentyl]

I've mentioned this before, but I work in supply chain analytics, and I saw this coming before it made news.

All it takes is ONE vessel delay/disaster to choke the finite capacity of our infrastructure. When you've got dozens of vessels out at sea waiting to make port, it doesn't matter when that delay is resolved because once it does clear, we've still only got so many port staff/trucks/physical capacity available to move the now-flowing goods. Years ago, my director, in an attempt to curry favor with our CEO, chartered a UPS plane to move some hot-selling underwear that had been delayed to the tune of a million dollars. Said CEO was livid; the quote was something along the lines of "you think I wanted to spend a million dollars to deliver panties?!?!" Yeah, that conversation was overheard by a dozen of us because the CEO was literally yelling at the top of her lungs behind a closed door.

OT, the supply chain is being taxed right now because COVID at one point shut everything down, and even now is mitigating risks. That has nothing to do with our demands that haven't changed in in the near two years since the pandemic. Everything is moving more slowly, but we still want our shit today. We're only running out of shit because we didn't temper our consumption with the pace of an industry hamstrung by the pandemic. Imagine you're a restaurant that has to close for a few hours to clean up a mess, but the line outside your door just keeps getting longer and longer. When you open up, you've still only got so many tables, so the last person in line hears the restaurant is open again, but there's still a 3-hour wait.

TL;DR? Don't bring a party of 100 people to an all-you-can-eat buffet with a single chef, America.

 

[BrawlMan]

I mean this seems very regional. Here in St. Louis, Im fine. I go to the store, they have soup. I go to get an oil change, they have oil. I go to Games Workshop for paint, they have paint.
Aside from the original run on toilet paper and masks in 2020 things have been just fine.

Mainly the same in Michigan. Though there has been a shortage in certain parts of the state. We got the change shortage too.

 

[Phoenixmgs]

It's more than just the global supply chain, it's domestic too. The hospital I work at doesn't have hamburgers and chicken sandwiches in the cafeteria many days and I don't think we're getting beef and chicken from China. It doesn't concern me too much personally right now because I really don't eat too much and I'm not really all that consumer-istic as I've only ever bought what I need or really really really want. Some people have Amazon shipments everyday and I order from Amazon not even 5 times a year. My view on money is whatever I spend today that I don't really need is merely extra work I have to do in the future (work longer in life to earn the money I wasted today basically).

 

[Mister Mumbler]

OT, the supply chain is being taxed right now because COVID at one point shut everything down, and even now is mitigating risks.

That and...
Global Economy: "I fear no man, but that thing..."


"It scares me."

 

[Xprimentyl]

It's more than just the global supply chain, it's domestic too. The hospital I work at doesn't have hamburgers and chicken sandwiches in the cafeteria many days and I don't think we're getting beef and chicken from China. It doesn't concern me too much personally right now because I really don't eat too much and I'm not really all that consumer-istic as I've only ever bought what I need or really really really want. Some people have Amazon shipments everyday and I order from Amazon not even 5 times a year. My view on money is whatever I spend today that I don't really need is merely extra work I have to do in the future (work longer in life to earn the money I wasted today basically).

The domestic supply chain is affected by the global supply chain. Say I'm the owner of Roadway trucking. Typically, I dispatch 1,000 drivers to make 1,000 deliveries from both international and domestics suppliers. Now, I've got the same 1,000 drivers and 1,000 trucks, but the demand to move international goods from port after a singular delay pulls my pool of drivers and equipment to a port... suddenly, I can't meet domestic demands. It's a cascading effect; the supply chain can only juggle so may balls, and when demands mandate it juggle essential goods, suddenly, your want for a particular spice or pair of jeans is back-burner'd in lieu of what's more important or what someone paid enough to prioritize. In the intra-structure, domestic suppliers have an advantage, but it's mitigated by those within the inFRAstructure willing to pay a premium to expedite their goods. It's a cash game.

 

[Kwak]

What's intrastructure compared to infrastructure?

 

[SilentPony]

Mainly the same in Michigan. Though there is a bee surge in certain parts of the state. We got the change shortage too.

And I am sure there are major shortages around the place. Ive heard the stories, entire docks empty with no one to unload cargo containers. But also part of that is over-relying on China and India for cheap products. In STL we have the merging of the Mississippi and Missouri rivers, one of the largest confluences in the world. We're set on water and fish.

Not that I mean that's all the products we care about, but different regions have different resources and scarcities

 

[The Rogue Wolf]

Looks like the chickens are coming home to roost. Maybe it’s about time manufacturing does too instead of still relying on the terrible place called China for everything.

You're ready for the higher prices that will entail, right? Because you're not getting China prices with America wages.

 

[hanselthecaretaker]

You're ready for the higher prices that will entail, right? Because you're not getting China prices with America wages.

That’s the traditional rationale, but there are other avenues that could lead to more equitable results. Plenty of smaller domestic companies are making it work, and the biggest end up exploiting because they can get away with it more, not because it’s necessary. Same goes for domestic labor, albeit in a different scale.

The long term damage will only hurt worse too, with the loss of talent and the resulting brain trust being leveraged more overseas instead. Plus on the other end of the spectrum the elephant in the room is how unethical all that cheap labor really is. It’s a wonder with the changing social norms it’s still considered acceptable.

Outsourcing is not cheap labor | Outsource Accelerator

Companies have slowly become concern on the ethical conditions within their operations. Though outsourcing may involve saving costs and resources. Find out why here.

www.outsourceaccelerator.com

 

[Dwarvenhobble]

Ok so I've not seen anyone bring it up but a lot of the shortages etc are because of how much "efficiency" has been pushed that the supply chain can't flex.

Efficiency being in this case maximum profit minimum required spent. This matters because it's made a "Just in time" economy where it's more profitable for the delivery of lets say light bulbs to arrive just before the time the system predicts the last light bulb in the shop gets sold. The problem being the system doesn't count on anything breaking it so lets say there was a phantom power surge that blew out a load of bulbs in peoples houses now their will be a run on bulbs that wasn't predicted and the next delivery won't come until they run and and adding a new delivery would cost money.

To put it another way if a disposable battery goes in your TV remote, most people will have some spare batteries on hand somewhere to replace it. However the way our present system works having those spare batteries is seen as a waste because they might get damaged, they have to be stored, and you've spent money that could be sitting in an account earning interest or invested earning money. so you'd want to only get new batteries just before your remote ran out to be super efficient.

The inefficiency of the past is gone but that also allowed companies to be flexible. The guy who was fine to go out and get coffee orders is no more and everyone is at their desk because everyone must work fully all the time and there isn't room for another person who shares the work load but because it's not a fully load he's free to do other things too that benefit the company in other ways.

Another example. My father worked in the steel industry for 25+ years. The site he worked at before retiring had a new system put in for orders. Previously orders were colour coded based in priority with Green being plenty of time. Amber being due in the mid term and red being needing to be done immediately. The original way they worked was they'd do runs of orders. Whatever order was due soonest they'd stick on the plates and kit onto the machines to produce that order then they'd immediately carry on producing for any other orders with the same specs until they were done or another order turned red. They'd then switch the plates and kit on the machines to output the newly required specifications and do a batch of orders. The new owners saw this as inefficient so made it so they waited for orders to go red before sending them to the shop floor and so the shop floor was always busy. The problem being due to them being different specification orders the workers had to keep changing over the kit and plates all the time so it looked like a busy floor but was hugely inefficient because the efficiency standards and ideas being employed were about making sure to work the workers the maximum amount not as such have them have down time which was seen as inefficient even though the way to remove that down time was forcing them to do more silly busy work constantly changing plates. This caused the whole place to become less efficient so then they started getting rid of people to save costs which caused the problem to keep getting worse. Their efficiency plan to keep the furnaces doing and keep the machines running a peak wasn't efficient because it mean the machines were sitting idle while workers changed kit over but technically they were still working and processing something so their system deemed it efficient.

 

[CriticalGaming]

And I am sure there are major shortages around the place. Ive heard the stories, entire docks empty with no one to unload cargo containers. But also part of that is over-relying on China and India for cheap products. In STL we have the merging of the Mississippi and Missouri rivers, one of the largest confluences in the world. We're set on water and fish.

Not that I mean that's all the products we care about, but different regions have different resources and scarcities

In california the port of Long Beach has like 70+ container ships it cant unload because there is not only a lack of staff in the harbor but also a lack of trucks.

Additionally big companies like Costco, Wal-Mart, Target and Amazon have made millions to charter entire container ships to carry 30k containers of only their shit. And even paid extra for the port to prioritize their containers.

I import a lot of goods every year, on a normal year i bring in about 15 containers with 25k mugs/shots each. Bringing my containers from Taiwan and China into the US used to cost 3000. Now those same containers cost me 28000 and still have been so delayed that ive barely got inventory, some pushed back as far as six months.

People like to blame companies on relying on imported goods and Chinese manufacturing for this but they are ignorant. The truth is, the American worker has priced themselves right out of a job.

Wages arent as big of a deal as all the regulations. For example, to make a ceramic coffee mug in the US, i need to have a massive kiln which is a big ass oven that gets really hot and has exposed open flame vents. In California i have to pax a gas tax to run that kiln, i have to pay a very high insurance premium, i have to pay a manufacturing tax, and i still have to import clay from somewhere like Mexico. So even without paying the workers a higher wage due to the harsh heat and possible danger, i already have to charge customers 20+ for each mug wholesale, which would mean a 50 dollar mug at retail.

That is why things have been pushed overseas because of all the regulations and fees added on when trying to build anything here. Some companies can do it when the cost of their goods are already high. Something like American made Guitars and Cars because those price points are in the thousands anyway and people accept the higher cost.

Oversea it isnt even about the cost of the labor. They have no extra rules and taxes that they have to pay into things. So the labor comes at a much more straight forward cost. A mug that cost me 20 to make in the US now only cost me 1.60 to make in Thailand, plus an every dollar to ship over seas.

So instead of needed to have 20 warehouse people working to make a coffee mug, i now only need 2 people to put labels on boxes and ship them out the door. Which also means i can afford to pay my warehouse people 20 bucks and hour with ease. That wage however only comes because of tbe amount of production overhead ive saved by moving overseas.

Inflation and higher demand on wages plus regulations, fees, taxes, inspections, all those comforts have an extremely high cost. Which is why im not a fan of unionization, because they tend to hold expensive demands that are hard to keep up with in terms of profitability. It can put people out of business and the employee gets fucked anyway.

In some places unionization can be fine, construction for example, because the union protects the worker by keeping the job site safe and making sure employeers dont cut corners while also providing health coverage when accidents happen.

I dont think it is good in something like game development. I just think game development companies need to stop breaking the fucking labor law and everything would be fine.

 

[Silvanus]

You're ready for the higher prices that will entail, right? Because you're not getting China prices with America wages.

Well, we could have lower prices and higher wages simultaneously, if the manufacturing corporations were happy to lower profit margins.

 

[stroopwafel]

The world is too dependent on China from manufacturing down to the amount of ocean carriers and port terminals with the U.S. trade deficit compounding this problem further but the upside is that long supply lines guarantees a lasting if uneasy peace. With so many interdependent parts it makes countries with something to lose think twice before doing something funny. Politics is for show but trade relations between nations have never been stronger. I think at this point one of the biggest problems is China's 'zero covid' strategy where they shut down an entire terminal or port if they register as much as one infection. It adds even more delay to a situation where supply already can't meet demand and cost China like 5-8% of their economic growth. But the regime probably don't want to backpedal on the choices they made in the past to appear that these were unnecessarily severe.

 

[Trunkage]

The world is too dependent on China from manufacturing down to the amount of ocean carriers and port terminals with the U.S. trade deficit compounding this problem further but the upside is that long supply lines guarantees a lasting if uneasy peace. With so many interdependent parts it makes countries with something to lose think twice before doing something funny. Politics is for show but trade relations between nations have never been stronger. I think at this point one of the biggest problems is China's 'zero covid' strategy where they shut down an entire terminal or port if they register as much as one infection. It adds even more delay to a situation where supply already can't meet demand and cost China like 5-8% of their economic growth. But the regime probably don't want to backpedal on the choices they made in the past to appear that these were unnecessarily severe.

You know that a lot of products don't come from China. China is now too expensive, generally

 

[Eacaraxe]

I've mentioned this before, but I work in supply chain analytics, and I saw this coming before it made news.

Being a former Amazon worker, I've had to explain this to folks myself. The best possible comparison I've found that hits contemporary ears, is the difference between storage, bandwidth, and latency. The US supply chain is comparable to a cloud-based network with low to moderate bandwidth, optimized for latency. It's going to struggle with events that demand high throughput, upstream slowdowns or outages are going to interrupt usability, and if servers crap out, everyone's screwed.

The cargo ship, container, and berth shortage is just one big piece of it; "because China" isn't the catch-all folks think it is. Even if production were still somehow domestic, the "everything shortage" would still be happening. Literally every step in US inventory transport, infrastructure, and management is involved. All the way from trucking from points of origin, to just-in-time inventory management for outlets.

And, frankly, this is just the beginning of it. The part that's gone woefully unnoticed, is the truck part shortage (of which semiconductor shortages is only part). We have a shortage in truck parts, because we can't get the materiel to make truck parts. At the same time, we have increased load on the supply chain, stressing the trucks currently in operation which is going to increase breakdowns and the need for maintenance.

So what happens when the trucks currently on the road start breaking down, and can't be re-entered into service thanks to a lack of replacement parts? And when that happens, where does the money for the Highway Trust Fund come from because it's funded by fuel and heavy use taxes -- when Congress has already been having to divert money from the general fund to keep it solvent for a decade? And when factory, transportation, maintenance, and store workers start getting laid off in the middle of a "labor shortage"?

Or to put this another way, from Caliban's War in the Expanse series:

It’s the basic obstacle of artificial ecosystems. In a normal evolutionary environment, there’s enough diversity to cushion the system when something catastrophic happens. That’s nature. Catastrophic things happen all the time. But nothing we can build has the depth. One thing goes wrong, and there’s only a few compensatory pathways that can step in. They get overstressed. Fall out of balance. When the next one fails, there are even fewer paths, and then they’re more stressed. It’s a simple complex system. That’s the technical name for it. Because it’s simple, it’s prone to cascades, and because it’s complex, you can’t predict what’s going to fail. Or how. It’s computationally impossible.

Prax, here, describes how Ganymede is already dead and people don't realize it yet. And it's what's only begun in the case of the US supply shortage.

I mean, I can at least give you all a little bit of insight as to what's going on inside Amazon right now.

Spoiler

Amazon's fulfillment network is optimized that warehouses specialize in a certain kind of inventory: perishables (Fresh), hardlines, softlines, etc. They relied near-exclusively on transshipping inventory between warehouses, predictively or reactively, to fulfill customer orders by injecting those orders into shipping networks at the nearest point to the customer.

Say, for example, you bought some T-shirts, a Muppets DVD, and a great big black dildo (which isn't even close to the weird end of customer orders, by the way). All three of those items would probably come from different warehouses, and be transshipped to one of them to be packaged together. Right there, that's two different transshipments requiring two trucks that do nothing but move between Amazon warehouses. Probably three, if all three items go to a fourth warehouse that happens to be closest on the supply chain to you, or if AMZL delivers direct from a fourth FC.

Which is why if you watch order tracking on Amazon, it'll show the inventory you ordered going halfway across the country in the opposite direction to you at times. They're transshipping the shit you ordered to an FC closest to a USPS hub, so it can be packaged and sent directly to that hub where it'll be delivered with minimal time in transit.

The problem Amazon's facing, is transport capacity (which I'll refer to as T-cap). My old FC's outbound capacity is a million units shipped per day, easily; peak capacity exceeding that by 25-50% depending on how derpy outbound operations is that year. That same FC is operating at about 30% capacity right now, if my sources and math are solid (and I have every reason to believe they are) -- just because they can't get the trucks, and the fulfillment network downstream doesn't have the capacity in turn.

Which has led to comical situations, like having to offer voluntary time-off (i.e. sending people home for the day) with more than a week's order backlog and all shifts on mandatory overtime, simply because the FC hit T-cap for the day -- even though they realistically have three to four times the fulfillment capacity. And, corporate has had to do the unthinkable -- de-specialize and decentralize so that FC's store multiple types of inventory, to relieve transshipping pressure.

 

[09philj]

In Britain we're having significant problems because we left the EU so now there isn't so much cheap labour to work in abattoirs or picking crops or driving HGVs and absolutely everyone failed to prepare for this, also the wholesale price of oil and gas has skyrocketed so a bunch of utility companies have gone under and people have been panic buying petrol so there's none left.

 

[Seanchaidh]

You know that a lot of products don't come from China. China is now too expensive, generally

Eliminating absolute poverty really put a damper on the job market.