Our broken supply chain system

Bloomberg had a good article about the predicament our economy now faces. Of course it's all about the what's and not about the why's (hint: blame multinational corporations and their single-minded goal of short-term profit above all else).
But the article does have a lot of good graphs.

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Here's an observation: If you hadn't moved all of your factories to Asia, and had left them in the United States, then this wouldn't be a problem.

The time it takes for goods originating in Shanghai to reach their destinations through the San Pedro Bay ports has more than doubled to 62 days since January 2020, according to freight forwarder Flexport Inc. Meanwhile, it currently costs $10,000 to $15,000 in the spot market to ship each 40-foot container from China to the West Coast, more than five times the pre-pandemic rate.

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This leads directly to price inflation.

The logjams don’t end at the port. Southern California has some 2 billion square feet of nearly full warehouse space, too. And its railroads and highways serve as arteries for imports reaching as far as the Heartland.
...What started a year ago with a half-dozen container ships that dropped anchor in the bay nearby has ballooned into a maritime parking lot that currently exceeds 70 vessels waiting an average of more than 18 days.

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Of course the negligence of our infrastructure has a lot to do with this as well.
But even then, if the factories hadn't moved across the ocean this still wouldn't be a big problem.

A shortage of truckers and chassis is also making matters worse. The U.S. is currently lacking about 80,000 drivers, according to the American Trucking Associations.

That's because drivers are paid and treated like crap.

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Three decades later, the corridor can’t fully accommodate the thousands of trucks that navigate the region every week. As a result, heavy-duty trucks often drive by residences and schools to avoid the congestion. Sometimes, truckers will go as far as abandoning containers and chassis in those same streets. In Wilmington, a blue-collar community located in the ports’ backyard, more than 400 illegal parking citations have been issued so far in November, according to the Los Angeles Port Police.

But residents say the citations, which range between $73 and $98, aren’t enough. “It’s like the Wild West,” said Gina Martinez, co-chair of the Wilmington Neighborhood Council. The 54-year-old says the majority-Hispanic community has been grappling with truck traffic since at least the ports began expanding a decade ago, but that the ongoing supply-chain issues have made things worse. Containers “just keep coming in and coming in,” Martinez added.

This shows a dysfunctional economic system. Every nation should be able to produce something that other nations want. If they did, then all those now empty containers would be leaving as fast as they come in.
No nation should reply exclusively on consumption. That is an insane system.

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mimi's picture

That's because drivers are paid and treated like crap

11 dollars per hour, no time to go to pee, driving unsafe or even unregistered vans, often driving over 12 hours in the row. But heh, poor folks need a job too.

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mimi

He threw in with the mafia to fight off the "security" goons of the trucking companies. The eventual result was The Master Freight Agreement, which turned driving a truck into a middle class job as of the 1960s.

The Feds, including JFK and RFK, set out to "get" Hoffa and on their fifth try they sent him off to school. With Hoffa out of the way, the Teamsters became a different organization, more in tune with the rest of Organized Labor.

You are looking at the result now.

.

I have one degree of separation from the Hoffa who was sprung from the jug by Nixon. Deposed from any authority by the terms of his pardon, Jimmy started his last campaign to re-take leadership of the Teamies. A management guy I dealt with in the late 70s had gone to Cornell University's Labor Relations school where he saw Hoffa speak shortly before his disappearance. He said that Hoffa said this:

"The biggest mistake I ever made in my life was to throw in with The Mob. I am now in the process of correcting that mistake."

I am not so naive as to take that proclamation from Hoffa at face value, necessarily. What the hell else was he going to say? But I lived through the Teamsters decline and I saw in real time what that Republican Leadership did to their members without Jimmy or The Mafia or some other kind of muscle behind them.

Since then, driving a truck has became a job about like being a 7-11 night manager.

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I cried when I wrote this song. Sue me if I play too long.

The Liberal Moonbat's picture

...in fairness, I suppose a lot of American output has become stuff that doesn't need shipping - websites, finance, and now movies and computer games, all just go out directly over the Internet (the fact that computer games can no longer be bought in stores was and remains an incredible heartbreaker for me - but that is a story for another day...).

That said, what happened to foodstuffs (regardless of who controls their means of production at the moment)? Does America not still produce those in surplus? Last I heard, McDonald's alone gets all its potatoes from a single company in Idaho (I read that in Fast Food Nation, IIRC).

Then there's drugs (the "good" and "bad" kinds, as I was taught to think of them in the '90s - to which now I guess we must add a strange new "ugly" category???), which you yourself wrote about America being a producer of just within the last week.

Who ships the military products, and from where, I wonder...?

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We live in a society in which "we live in a society" is considered a subversive and vaguely-threatening statement.

In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

ggersh's picture

https://jessescrossroadscafe.blogspot.com/

"And then, Wall Street blew up the global economy. Empowered by bank deregulation and regulatory capture, Wall Street enlisted those tough-minded men of the media again to sell the world on the idea that financial innovations were making the global economy more stable by the minute. Central banks puffed an asset bubble like the world had never seen before, even if every journalist worth his byline was obliged to deny its existence until it was too late...

If economists— and journalists, and bankers, and bond analysts, and accountants— don’t pay some price for egregious and repeated misrepresentations of reality, then markets aren’t efficient after all."

Thomas Frank, Too Smart to Fail, March 2012

And now it's Silicon Valley to algorithm us to death

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The correct response to someone who supports going to war if China attacks Taiwan is “Are you enlisted?”

The correct response when they inevitably answer “no” is “Then shut the fuck up.”

Caitlin

gulfgal98's picture

Many manufacturers rely heavily on just in time inventory management. Many retail establishments now are using the JIT systerm, particularly grocery stores, even for non-perishable goods.

Companies employ this inventory strategy to increase efficiency and decrease waste by receiving goods only as they need them for the production process, which reduces inventory costs.

This system is heavily dependent upon all links in the supply chain operating efficiently. If just one link fails, then the whole system falls into disarray because there is no inventory upon which to rely.

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Do I hear the sound of guillotines being constructed?

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

@gulfgal98

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I've seen lots of changes. What doesn't change is people. Same old hairless apes.

cost $200 about a year ago.

The tie up has raised that price to as high as $25,000. The container companies and their affiliates are making big bucks on this. Do not look for them to change anything.

We can all say, "Make stuff here."

"Grow what WE eat, not what hogs in China need, right here and untangle this problem."

As if anybody wants to untangle a problem.

The US way is to benefit from a problem. Not solve it.

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NYCVG

CB's picture

@NYCVG
But they've now taken to creating the problem in the first place in order to benefit.

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zed2's picture

Just look at the situation going on in Africa. Its nuts. NGOS are a whole industry to suck away money and waste it. Its purpose is to employ wealthy elites in low stress jobs.

Why are they tax exempt. The government should be fixing these problems. Not tax shelters.

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