TVW Update

“The Impact”: Supply Chain Breakdown Q & A

Courtesy NW Seaport Alliance

 “The Impact”:  Watch 

From Washington’s ports to warehouses, store shelves, and car lots we’ve got an in-depth look at the supply chain breakdown.  With insight from Steve Balaski, Senior Business Development Manager for the NW Seaport Alliance and Mike Ennis, Director of Government Affairs for the Association of Washington Business.

We start with the implications of the interruptions on the first link in the chain for goods coming into the United States, the ports.

“It is a series of bottlenecks. Product coming off a ship has to then be picked up by a truck which is then driven to a local warehouse where that container has to be unloaded with labor. What we’re seeing is because of this huge surge in demand, warehouses locally are pretty much full and that unfortunately cascades back across the supply chain. So if you can’t unload the container once it arrives at the warehouse it sits there on truck chassis and those truck chassis are then unavailable to be used to pick up another container,” said Balaski.  “We do have ships that have been waiting weeks for an open berth.”

We also examine the effects of the backlogs and shortages on businesses and the customers they serve.

“Delays of materials, shortages, longer wait times for delivering orders, higher prices and then even not being able to find the product that you’re looking for on the shelves,” said Ennis. “Usually these car lots are stocked full and we saw some where there were just a handful.” 

“Most employers, manufacturers especially, operated on a ‘just in time’ inventory and we’re seeing now with COVID and the impact of the supply chains, a shift to a ‘just in case’ inventory.  So manufacturers are purchasing materials well in advance of actually needing them and storing them themselves because they have this disruption of supply chain and they can’t consistently get the products in the just in time model. That’s where we are experiencing a shift and that’s going to have repercussions throughout the economy. I think prices are probably going to go up a little bit because of that storage, these companies, you know, having to store additional materials on their shop floors when they didn’t have to do that before. So that’s, that’s an interesting, I think, consequence of what’s happening and something we need to watch very closely.”

“They’re looking at a disruption the supply of some of the products that they use that they purchase so they’re going to stock up. I mean that’s a pretty natural behavior. I might see a product on the shelf that I don’t always see there. I’m going to buy not only what I need, but I’m also going to buy what I think I’m going to need in the future because that product might not be on the shelf again,” said Ennis. “I’m already buying food for my Thanksgiving dinner that we’re going to have because I’m not sure if my turkey or my stuffing or my whatever else I need mash potatoes and actually going to be on the shelf when Thanksgiving rolls around because I think people are going to be looking to stock all those items. So, start early would be my advice to consumers.”

“When does this ease? There’s, you know, the popular wisdom right now from the container shipping side and airframe side, you know, we’re looking at definitely into, into the first quarter of next year. You’ve seen predictions that this could last through the entire 2022. And I think both scenarios are possible,” said Balaski. “A lot of it does depend on things like consumer demand. What happens with COVID if things open up and spending starts to shift more to services than goods that will have a role to play. So unfortunately, no near term. I don’t think this will be a near term situation where things ease but, it, the balance, it will balance out again eventually.”

“I have to agree with that. It’s not going to be a short term timeline on returning to pre-COVID levels in their supply chain. I think it’s going to be much longer than that,” said Ennis. “Now, whether it’s two, three, five years, I’m not sure, but it took a while for the system to become unbalanced and I think equally it’s going to take just as much time for it to, to enter, rebalance. And we’ve had some pretty significant changes in the economy at a lot of different levels. And that’s, that’s going to take some time to, to rebalance back toward.”

Later in the show we take a look back into some of the scariest characters from Washington’s past.  The Halloween special includes a labor organizer and suspected serial killer from the turn of the century, a doctor who offered the same deadly prescription to all of her patients, and a two-legged creature that needs no introduction.  Washington State Archives Outreach manager Jamison Murphy shares  samples from some of the characters you might hear about in this year’s virtual haunted tour. 

 

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