Consider This from NPR - Why The Global Supply Chain Is Still Clogged — And How To Fix It

Episode Date: October 21, 2021

Last week the White House announced a plan to help move the port of Los Angeles into 24/7 operating status. But that will only "open the gates" of the clogged global supply chain, Transportation Secretary Pete Buttigieg told NPR on the NPR Politics Podcast. Another crucial supply chain link is the trucking industry, which is short tens of thousands of drivers. Bruce Basada, President of the Diesel Driving Academy in Shreveport, Louisiana, explains why. The clogged supply chain is leading to delays and shortage on all kinds of products. NPR coverage in this episode includes excerpts from Scott Horsley's report on a shortage of glass bottles, Petra Mayer's story on the slowdown in book production, and Alina Selyukh's look at shipping delays for children's toys. Special thanks to Scott, Petra, and Alina for editing help on this episode. In participating regions, you'll also hear a local news segment that will help you make sense of what's going on in your community.Email us at [e-mail] more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This message comes from Indiana University. Indiana University performs breakthrough research every year, making discoveries that improve human health, combat climate change, and move society forward. More at iu.edu slash forward. In Los Angeles, traffic just keeps backing up. Not on the highway, in the ocean. So to put this in the proper context, we have 52 container vessels waiting in the harbor to get into the port, whether it's the Port of Long Beach and Port of Los Angeles. So in normal times, there is zero.

So that's how bad the crisis is. Mario Cordero, the executive director for the Port of Long Beach, spoke to NPR this past week. And he used the word crisis because those two ports, Long Beach and L.A., represent about 40 percent of shipping containers that come into the U.S. And unlike comparable ports, say, in China, they don't normally operate around the clock. So when you talk about the epicenter of manufacturing of the world, China, that movement is 24-7, including their ports, the international carriers are 24-7. So what happens when they come to the United States? We're not.

So part of the problem is the delays that happen when we have this kind of volume. Volume meaning higher consumer demand, colliding with staffing shortages and supply chain bottlenecks, all caused by the pandemic. It's why last week, the White House announced it would help move L.A.'s port into 24-7 operating status. You can think of that as basically opening the gates. Transportation Secretary Pete Buttigieg spoke to NPR after the announcement. Next, we've got to make sure that we have all of the other players going through those gates, getting the containers off of the ship so that there's room for the next ship, getting those containers out to where they need to be.

Now that is easier said than done. Here's Long Beach Port Executive Mario Codero again. I think the challenge in the supply chain, there are labor challenges. For example, enough truck drivers, that's an issue. Enough people who are working at distribution centers and warehouses, that's an issue. Enough people who are working at distribution centers and warehouses. That's an issue. So needless to say that for this to work is just not what happens at the docks or at the terminals. It has to be a supply chain solution. Consider this. The supply chain you've been hearing so much about is made up of people. People who are still struggling to operate in a pandemic. From NPR, I'm Adi Cornish. It's Thursday, October 21st.

This message comes from WISE, the app for doing things in other currencies. Send, spend, or receive money internationally, and always get the real-time mid-market exchange rate with no hidden fees. Download the WISE app today, or visit wise.com. T's and C's apply. It's Consider This from NPR. Today and tomorrow, we're taking a hard look at the world's clogged supply chains and what can be done to fix them. On tomorrow's episode, we're going to talk about workers and the struggle to find more of them. Today, we're focused on the systems that are failing those workers. Demand is high. Logistics are slightly out of whack. There's import congestion.

And production is fairly well operating at max capacity. So put those things together, and there's going to be some wrinkles. That's Scott DeFife. He's talking about glass. DeFife, who spoke to NPR this month, is president of the Glass Packaging Institute. It's a trade group. Glass bottles for, say, spaghetti sauce or liquor are running short right now because 20 to 30 percent of the bottles used in the U.S. are typically imported. And a lot of those bottles may be stuck in some of that shipping traffic out in the ocean. And American producers simply can't make any more. There is no shortage of the raw materials to make glass in this country. And the plants are all operating at full capacity to make new glass

containers. The underlying issues here, import congestion, meeting maxed out demand, logistics issues, all kinds of industries are dealing with those right now. Here's one you might not think about, books. Here's Candace Huber, who owns Tubby & Co.'s Mid-City Bookshop in New Orleans. The paper, the printing, the shipping, the warehouses, just like every single step of the process has been affected. Books have been slower to get to shops like Hooper's because there's a high demand for paper pulp, which of course is also used to make shipping boxes, boxes that increasingly are going to be filled with holiday gifts, if, that is, they can make it to the U.S. With a fair amount of dread, I read our shipping reports every week.

Mary Higbee is with Goliath, a children's toy company that makes games like Pop the Pig and Rummy Cube. And a lot of her products are floating in those traffic jams at a high cost. Shipping containers that used to cost $4,000 to move across the ocean can now cost a company more than twice that. And some of them, like Higbee's, are floating out in that ocean traffic. And I can't commandeer a helicopter and rifle through containers to get the products that I need. Toymakers saw this coming. Ahead of the holidays, Mattel has already made the call to make fewer toys. Hasbro, which sells My Little Pony and Ugly Dolls,

started its holiday shipments weeks in advance, which incidentally only added to the shipping traffic. And all of this could translate into products that are harder to find this holiday season. My advice and what I've been doing is when I see something that I'd like to give for a holiday gift this year, go ahead and buy it. Even if it is in the store today, it may not be there next week. You may be waiting for another shipment and it's sitting on a boat in Puget Sound. Glass, books, toys. Why can none of this stuff make it into the ports quickly enough? Well, for one thing, the pandemic led to rolling closures of factories and ports worldwide. And there have been other hiccups, like bad weather or a giant shipping vessel blocking the Suez Canal. And now in China, plants are struggling through power outages caused by high demand and the rising cost of coal.

Through it all, Americans never slowed down their online shopping. So we're trying to import more cargo than ever before. And at this point, even if your stuff does make it to a U.S. port, there aren't enough truck drivers to get it where it needs to go next. I mean, yeah, I have students. I have enrollments have increased, but they hadn't increased to meet the demand. Bruce Busada is president of the Diesel Driving Academy that's in Shreveport, Louisiana. He's got 180 students there, and he told me demand is so high.

You know, I could double that number and easily place them with trucking companies. But for a lot of the trucking world, that's not an option right now. Students cannot be turned into drivers as quickly as the industry needs. Bruce Busada and I spoke about why. Help us understand the training pipeline. What are all the parts of this process from schools to permits to driver's licenses. How did things get affected by the pandemic? Well, I think, number one, they have to get a DOT physical and a drug screen. So that's Department of Transportation in their states? Well, no, nationally. A national test that they give, that the medical examiners have to give,

and you have to be a registered medical examiner. I imagine that got slowed down because I think those doctors were dealing with the crisis. We had that problem. And then the permits going into the state, those offices were closed. Even in our state, we were having to do it by appointment only because they had to restrict the number of people that could go in to an office. And then once they complete the school, then you had to do the skills part. But even after they were tested for that and pass it, sometimes they couldn't get into the DMV office. And then when you take into consideration, you have people retiring early because of age or

because of the, you know, they don't want to work and have to deal with all the things you have to do with the virus, you've got a problem, big problem. What does that mean in terms of the pay right now and working conditions, right? In the past, people, drivers would complain that because they were contractors, they weren't necessarily employees with benefits and other protections, that they didn't really have the bargaining power that they would like. What's the situation now? Well, the pay's gone up tremendously. Some companies are even paying students bonuses to sign on and come to work with them. Can you give us any numbers? I have no idea what truck drivers make right now. I would say

average is probably 60,000 coming out of school on up to, I'd say, 85,000 the first year. And the benefits are always been there. And I really think that we need to do, the trucking companies and the schools need to do a better job of letting people understand that these are good jobs now. They're clean jobs. They're safe jobs now. I mean, I had a gentleman that graduated from our school, and he told me, yeah, I've been able to educate all three of my kids, and I helped buy him a house because of driving a truck. And he even had one of his sons come to our school. So what will it take to improve the shortage? Because this is certainly an important part of

the kind of slowdown in the supply chain. You know, we've been hearing that phrase all the time. And what do you think will make the difference? I think number one's time. Number two is to get all the state motor vehicle offices open to full capacity. And once we can get that done, I think we can catch up pretty well. I think we're back down to needing under 100,000 drivers. I think to about 60,000, I think the American Trucking Association said that are needed immediately. Bruce Posada, that is a huge number of drivers. I mean, when you look at the containers at these ports, you're telling me we're a long way away. We are. We are. That's why I'm saying we need, you know, the states to help us somewhat. And I think more of the states need to look at, you know, maybe doing things a little differently

with letting schools third-party test, which we're able to here in Louisiana, and it works real well. So I'm not complaining about our states, but I think some of the other states are having problems. So to your mind, is the problem lack of drivers, the bureaucracy, or what? Is it a combination? It's a combination. But I think what's really driving the need to is online has increased the demand for drivers. People are just purchasing more things online. If it's office supplies or home supplies like soap or food or detergent, I think it's just increased everything so dramatically. And I don't see that ending anytime soon.

I see. So you're saying that it's not just a shortage, the surge in demand when it comes to e-commerce. You're saying we're all moving more goods. It's not necessarily that there's fewer drivers. Well, there's fewer drivers on top of that. But you got e-commerce moving so fast. I don't think we can catch up to it for quite a few years. Bruce Busada from Shreveport, Louisiana, talking to us about trucking, yet one of many economic sectors still struggling through the pandemic. You know, hotels that say, well, we can't open up enough of our hotels, they really mean our franchisees can't open up the hotels. And the franchisees are finding out the subcontractor can't get enough people to clean rooms. So you get so remote that

the people at the top don't understand how fragile it was. In our next episode, dissecting the weak links in the supply chain. A lot of these firms that are running into problems with their supply chain never fully appreciate it. At the end of the day, the supply chain ends up being people. We'll hear from some of those people who are part of what's being called the Great Resignation about how the pandemic changed work for them. That's tomorrow. It's Consider This from NPR.

I'm Adi Cornish.