From computer chips to wine bottles, the supply chain mess is disrupting Idaho in a big way
A headache of one Idaho business is a lack of a bike parts. Another's is a shortage of paper products. Yet another's is long-delayed wine bottles.
Rampant supply chain disruptions, exemplified by the scores of container ships anchored off of west coast ports, are hobbling nearly ever business sector in North America.
“The ports are just one piece in the whole supply chain,” said Dr. Jim Kroes, professor at the College of Business and Economics at Boise State University. “And we call it the supply chain because if any link breaks, the whole thing falls apart.”
“There's so much turmoil in each of the different transportation areas of the supply chain right now that it's becoming impossible to predict how it's going to work out.”
Read the full transcript below:
GEORGE PRENTICE: It is Morning Edition on Boise State Public Radio News. Good morning. I'm George Prentice. A recent story in The New York Times had this as a headline: “Why does everyone suddenly care about supply chains?” Of course, it's a hypothetical. Just look about anywhere… if you're looking for an auto part or if you've gone grocery shopping… and maybe most importantly, if you've seen those pictures of scores of container ships off the California coast, there is probably something going on… and maybe there’s a crack in the global supply chain. So, let's welcome Dr. Jim Kroes back to the program. He is a professor at the College of Business and Economics at Boise State University. Dr. Kroes, good morning.
DR. JIM KROES” Thanks for having me, George.
PRENTICE: Is it your sense that the backlog is worse, or is it that more people are now aware of this problem?
KROES: I think the backlog is definitely gotten worse. The underlying issue is that we're spending more than ever on imported goods. That trend has not decreased, and all that spending has gone on. We just have not built up the infrastructure to support the increased demand for flow through the ports. So that's why we're seeing a lot of these pictures of,70 ships anchored off the Port of Los Angeles - an estimated 20,0000 containers waiting to be unloaded.
PRENTICE: And I think the conversation gets very interesting when you divide “need to have” versus “want to have.” “Need to have” in well, personal protection equipment, automotive parts probably. “Want to have” is, well patio furniture, toys, et cetera, and all of that is on those ships.
KROES: It's such a mixture of products. A lot of what's sitting there are retail goods destined for shelves and online stores for Christmas. September is typically when retailers start ramping up their Christmas supply chains, and there's going to be some delays in getting those goods to where they can actually get to the customers in time for Christmas.
PRENTICE: I think you get a lot of people's attention when you start talking about that particular item…that particular toy… and whether it will be under the tree by December 24th,
KROES: It's hard to say if things are going to get straightened out by then. There are just so many bottlenecks happening throughout the supply chain industry at one time, that as soon as we fix one problem, the next problem comes up.
PRENTICE: What other real world examples have you seen or heard of?
KROES: So, one that was really interesting was this weekend, I was talking to Will Wetmore, who's the owner of Veer Wine Project out in Caldwell. And I asked him how his supply chain issues… if he's having any. And he said he can't get bottles; and it's a commodity that they've never thought about before. They could always order them and get them within a couple of days. And now they're ordering out for January because the there's so much uncertainty in supply. So, simple things like that… that we just take for granted. We're finding we can't find things like bike parts. I went to a bike shop to find something that was always on bike shelves, and they told me it would be January before I could get it in. So, there are lots of things that you don't think about that you just assume are going to be there that we're finding shortages for.
PRENTICE: The Biden White House got involved in this recently. And there is some political risk with that, which is to say, taking ownership of a problem that won't be solved any time soon. CNN quoted the director of media relations at the Port of Los Angeles, which is North America's biggest container port, and he said currently there are no cargo owners who are looking to use that 3:00 a.m. to 8:00. window that the Biden White House is pushing for. They would like a 24 hour operation, but if you don't have the workers, that's just a wish. That's a bit of a pipe dream.
KROES: I think the 24-7 operations is a step in the right direction. But with supply chain management, as soon as you fix one bottleneck, the next one pops up. And the next bottleneck is there aren't enough truck drivers. We have had a shortage of truck drivers in the U.S. for a dozen years, and they just can't recruit enough people to come drive trucks. So now that we reduce the bottleneck in ports, that next bottleneck of finding truck drivers is really going to be tough to solve.
PRENTICE: And then, of course, we have our warehouses. We're seeing a growing number of strikes across the U.S. To be clear, this problem is much, much bigger than container ports.
KROES: The ports are just one piece in the whole supply chain. And we call it the supply chain because if any link breaks, the whole thing falls apart. So, it's really important to manage all the operations at one time and take that holistic view. But there's so much turmoil in each of the different transportation areas of the supply chain right now that it's becoming impossible to predict how it's going to work out.
PRENTICE: So, I have heard… and I'm guessing you have too… of some projections - not predictions but projections - that this might not even really begin to clear up until possibly the Lunar New Year…the first part of next year,
KROES: I think that's a pretty good projection. You can't fix this quickly. Even if they could find people who wanted to be truck drivers, the training takes a while and then you have to get them into the operations. So, it's not an overnight fix. It's going to take a while. And again, the underlying cause is we're spending so much more. We just weren't prepared for it. The shift in spending due to COVID has just created this incredible demand for tangible retail goods, instead of people spending money on restaurants or travel. So, we just weren't prepared for the shift in the economy that happened.
PRENTICE: This must be a fascinating semester for you and your students. I would love to be in your classroom… and listen to the conversations that you're having with students. My guess is that they are being inspired by what's on the front page of the paper on any given morning.
KROES: It's really fascinating, and it's great that supply chain is finally getting some visibility. Our students are pretty sought after. Somebody told me, you can’t throw a rock and hit a supply chain job right now. And here at BSU, we're a small major, but we put our students in really good positions to go out and find great careers when they graduate. But yeah, we're talking about - every week - what's new and what's going on. So, there's a lot of material this semester that we can relate to… what they're seeing with their own eyes.
PRENTICE: You can almost nudge the textbook to the side, and basically just engage on the past 24 hours.
KROES: You know, every week we could just sit and talk for hours on what's going on and not really even have to fall back on what we traditionally taught. But it has caused us to reassess, at least in my class, how we teach risk management. Because it's definitely become more important than… or more visible… than it was in the past. So, we've spent a little more time on that than I did in the past, that they're considering what risks can happen to a supply chain since we're seeing them firsthand now.
PRENTICE: Well, thanks for bringing a lot of that home to us. He is Dr. Jim Kroes and we always look forward to getting some of his time. Thank you and have a great rest of your morning.
KROES: Thank you. Thanks for having me.
Find reporter George Prentice on Twitter @georgepren
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