Supply chain, inflation impact NYC food insecure
The disruption in the global supply chain caused by COVID-19 extends beyond toys and microprocessors for new cars. The impact is felt by millions of people struggling with food insecurity and the organizations that help put food on their table. (Dec. 21)
AP
People are talking about supply chains,although it wasn’t as much of a focus before the COVID-19 pandemic.
“Now in the last two years we’ve got this spotlight on us, probably for the wrong reasons,” Ted Stank, executive director of the Advanced Supply Chain Collaborative, told a virtual audience at an Oak Ridge Chamber of Commerce Zoom event.
“I think most of us are familiar with the consequences of what’s happened. I just wanted to get into a little bit of the why,” he told his virtual audience.
He said supply chains involve people in different countries.
Issues were already building to make supply chains more difficult. Nowadays, he said, there are 8,000- or 10,000-mile supply chains where multiple players have to be involved to bring goods to consumers or businesses. This makes these chains complex domestically, as well as internationally. However, he said, due to the Great Recession, there are very few major ocean carrier companies at present.
He said because of various policy decisions over the last 100 years, the United States doesn’t have domestic ocean carriers.
“It takes a long time to make an investment in an ocean carrier,” he said.
Other issues that were building before the pandemic included a limit to ports that could handle large carriers, he said.
“And then COVID hit. Crazy swing in demand,” Stank said.
Due to people staying at home, demand for some products dropped while demand for others rose. He specifically talked about the demand for toilet paper, hand sanitizer and baked beans.
There were other disrupting factors throughout 2020 and 2021. They included shutdowns of Asian ports due to COVID-19, the 2021 Texas winter storms, and protests that emerged during the time period.
He said there were “explosions of almost every area in the integrated supply chain.” He said there was a rise in China freight rates and also shipping rates.
He said another “root cause of the problems we have in the United States is the driver shortage.”
“A big part of the problem is they can’t clear their ports of the existing freight,” he said, and added that problem was in part due to a lack of drivers to drive the supplies away from those ports.
In response to an audience member who asked if the military could take over shipping, he said the military isn’t trained for that kind of work.
He said trucking involves long hours and high stress.
“They get paid by the mile, not by the hour,” Stank said. “Sometimes to earn that 80 to 100 dollars they’re working 100 hours a week.”
He said more recent increases in pay may be attracting more drivers.
He said the use of smaller carriers and more use of rail might help resolve supply chain issues. Specifically, within the next year and a half, he said, it may be easier to ship goods across oceans, he said.
Ben Pounds is a staff reporter for The Oak Ridger. Call him at (865) 441-2317, email him at [email protected] and follow him on Twitter @Bpoundsjournal.
