Dan from Madison – Page 7

Unpacking the Port Part Two

October 31, 2021 by Dan from Madison

Ginny provided an excellent link to a discussion about the port mess on the West Coast. I read the entire (long) thing and the comments and had a few things to add here.

I doubt that some guy (although he is a logistics company CEO) could rent a boat, put out a few tweets and change a municipal rule. It isn’t like the guy has millions upon millions of followers. I suppose it could have happened but sounds doubtful (8 hours is what it took). And while it is great that they can stack containers higher, that isn’t going to solve the overall problem.

As many others (including me) have pointed out the problem didn’t happen overnight and won’t be fixed overnight. The problem needs a team of people to come up with a game plan that is realistic, and a bunch of rules will need to be changed if the issue is going to be fixed. Mayor Pete is clearly underqualified and probably doesn’t care, as evidenced by his extended time off to play mom. While taking time off to take care of a child in and of itself isn’t a bad thing, taking off so long is, of course, ridiculous and a bad look. Full disclosure – when my wife bore my two children I think I took off one or two days for each.

I have said before that there needs to be a Port Team, or something on the federal level and they need to get with the state and local governments as well as the unions and fix the archaic rules that everyone is playing under, and come up with some out of the box solutions. I figure this would take the team around a month to come up with, and I would involve everyone, including the army logistics people, or anyone else I could think of to help.

This will not happen.

So, back to reality. In the world of industrial distribution, things are somewhat like they have been for the past year and a half. Anything imported is completely crazy and unpredictable as to when it will arrive. Everyone is more accepting of substitutes, as sometimes there is no choice – and many times the substitutes are much more expensive. But if the choice is “heat” or “no heat”, it makes things easier. Winter will have no mercy on facilities or homes that don’t have parts or units that work to keep them thawed. I get very little time off, but I have no choice right now as we need stuff and I have to do whatever it takes to get it.

There are some holes in the inventory but nothing too tragic, with the notable exception of imported finished goods such as ductless mini split systems, all of which are made “over there”. That industry is pretty much tanked. Domestically made products are doing much better, although the continuing labor shortages and problems with getting certain raw materials such as plastics and foam (we really didn’t need that Texas freeze on top of all of this) hurt lead times.

It is still pretty wild with some things, but overall, it isn’t the end of the world unless you are relying on imported stuff. LTL continues to be a major issue and I expect problems with food chain eventually. We need autonomous trucks and fast.

Fixing Something

October 17, 2021 by Dan from Madison

David Foster put up a post linking a site that tracks global ocean freight (and other boats). The ensuing comments were interesting and far ranging. I had started to type this as a comment but it got too long.

The comments for the most part brought up issues with supply chain, a world I am intimately familiar with. We are struggling right now with a massive surplus of inventory at my industrial distribution business. While that sounds like a simple problem to fix (sell it down, duh) it isn’t that easy. Everyone in my industry is hoarding inventory right now – its the new model. Pre Covid, we had patterns that were as old as time. In Spring, we do “this”, in Summer we need to order “these” and so on. Of course manufacturers do the same, and up the supply chain.

With Covid, those patterns are completely blasted out into space, and rather than a nice sine wave looking thing for our inventory, we have severe spikes where we see nothing, or a years worth of product showing up at a time. We don’t dare cancel orders for fear of going to the back of the line. Companies are full now of more and more inept and incompetent people, and good information is very hard to find. When you find a person who is in the know, that in itself is a super valuable thing to have.

Back to the comments of David Foster’s post. Most of them dealt with a part of the supply chain. Last weeks super stupid pronouncements by the Biden administration proved how little thinking and forethought they have. The supply chain problem didn’t happen overnight and their solutions seem to portray that it will be fixed overnight, and we all laugh, of course. I saw something about opening the ports 24/7, having Walmart and Target do something and some more blah blah. Laughable. As if Mayor Pete knows the first thing about transportation. I digress a bit.

When faced with a big problem in my business, or my life for that matter, I break it down into parts and try to tackle the different parts to eventually solve the problem as a whole. You simply can’t take an issue like “Supply Chain”, and make a few pronouncements and make it all better. With an enormous, multi-faceted problem such as the one we are in right now, the solution needs to be comprehensive and flexible. We currently have none of the above and I expect more of that for the future.

Industrial Distribution Update

October 5, 2021 by Dan from Madison

For those not familiar, I own an HVAC distributor, and HVAC distribution is a subset of industrial distribution. Every few months or so during covid I have been putting up a post describing what is going on in my little slice of the world. Time for a new one.