Supply Chain and LTL

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LTL means “less than load”. For those not in the know, a “load” means a full truck. Full trucks in the USA can be those huge 53 footers, or something smaller.

In industrial distribution for most products, we utilize LTL for the majority of our inventory. It’s a serious disaster right now.

I have been carping for the better part of a couple years about the issue. As with most things, there are several factors at play.

1) No new entries in the truck driving industry – we simply have a driver shortage, and have for a very long time. From what I am reading we are around eighty thousand short and the problem is only getting worse. All trades have this same issue. Kids growing up simply don’t want to do actual work, and would rather spend time making their money in front of screens or doing “soft labor” as I call it. Not that “soft labor” such as cutting hair or being an accountant are necessarily bad in and of themselves, mind you.

2) Nobody gives a f – this is harsh, but there it is. The work that is getting done, when it gets done in LTL is slow and sloppy. We have record amounts of damage and missing freight. It is absolutely maddening when you wait with these extended lead times for a specialized piece of equipment, and it finally arrives with a fork passed through the center.

3) I firmly believe that the cops, Teamsters and insurance companies have teamed up into a strange cabal to “slow roll” driverless vehicles. This is a bit of tinfoil had stuff I will admit but it is a theory I have had for a while. If we had driverless trucks a lot of these problems would be solved almost overnight, however there would be no speeding tickets to write, labor contracts to negotiate or premiums to collect. Well, virtually none anyways. This wouldn’t solve the issue of a lack of mechanics to service the vehicles, but that is grist for another post.

4) Lack of sense of urgency in government. As I have pounded the table on before, we need a “port team” or “transportation team” to get industry experts together, and start solving problems. Flying into LA and waving a magic wand over the ports, like has been done so far, is getting less than nothing done.

So the result is that we have this insane mess across the whole country. I have been trying to figure out ways to pick up freight that is within a reasonable range and trying other ideas such as even partnering with competitors or people outside of my industry to come up with a full truck to get a non stop delivery to the area.

A few anecdotal stories to end this rant.

I have a manufacturer that is 45 minutes from one of my stores. They sent out five pallets of stuff to me last Friday and it still isn’t here. The reason is that the trucking company has it parked at some sort of re-sorting facility as they lack drivers and need to consolidate their shipments. Meanwhile, people are getting cold.

This is an interesting article I spied the other day about a local chocolatier waiting forever for a skid of chocolate. I would bet a large amount of their extended lead time is transportation. It affects everything.

Duly Noted

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A marked increase in the number of rude, rotten, and outright dangerous drivers is a local thing that my daughter and I, and a scattering of friends have noticed over the last several months. It has been, as my daughter noted, an increased number of Third World drivers, on our local roads. A lot of near-misses, carelessness in lane-changing, ignorance of use of the turn indicators, and a fair amount of road rage… including a shooting on a stretch of the IH-35 on the South Side of the city. While the South Side is largely and traditionally Hispanic, and has neighborhoods in it which have a reputation for being violent, especially after dark, I used to drive clear across town on my daily commute, from the largely Anglo, or white north-east side of town, to the Southside, and I often noticed that the drivers on the South side were a hell of a lot more courteous about allowing merges and lane changes on the IH-35.

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The Microprocessor is 50

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Andy Kessler, writing in the WSJ, notes that the Intel 4004 microprocessor was introduced to the market on November 15, 1971.

Here’s a history of the project, and here’s an article which describes some of the related projects that were going on at other companies.

Busicom’s decision to give Intel the rights to sell the 4004 for non-calculator applications in exchange for a break on prices–rather than royalties or equity or warrants in Intel–has to rank as one of the most expensive business mistakes ever.

 

Dangers of National Dependency

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I recently read a history of the French Air Force–The Rise and Fall of the French Air Force, Greg Baughen–which includes much analysis of aircraft design and construction.   One historical fact I thought was interesting: in 1939, the French licensed the design of the Rolls-Royce Merlin engine (the engine that powered the Spitfire and Hurricane, among other airplane) and contracted with the Ford Motor Company to manufacture these engines.

But when war was declared on September 3 of that year,   Henry Ford–who had strong neutrality and ‘antiwar’ beliefs–pulled the Ford equipment and people.   No Merlins for you, Mr Frenchman!

Closer to our own time, during the Iraq War, the Swiss company Swatch Group refused to supply contracted components for the JDAM missile.   In this case, there was a US company that could provide the items, and the Swiss refusal was ultimately overcome by diplomatic pressure.

In this retro-reading post, I cited an old copy of Mechanical Engineering magazine, which discussed the shortage of certain chemicals for which the US was largely dependent on Germany:

America did not make much progress (with aniline dyes) owing to certain complications and the lack of consolidated action.  What was produced here was in most cases equal to the imported product, but owing to the greater facilities for producing the color, the greater attention given to research, substantial government financial aid, and, primarily, the exceedingly low labor cost abroad, competition was out of the question.  Hence up to 1914 we had practically no dye industry and depended on Germany not only for dyes but also for many valuable pharmaceutical preparations as well as for phenol, the basis for many of our explosives.  

This problem was solved by intensive efforts during the First World War.

Prior to 1914, most people, including government people, probably thought (if they thought about it at all), “Well, dye for fabrics isn’t exactly a strategic resource…sure, we like wearing & seeing attractively-colored clothes, but it’s not really a matter of life and death”…but missed the connection to the pharmaceuticals and the explosives.

If we do wind up in a military conflict with another major power, the time constants are likely to be relatively short–more comparable to the time pressures the French faced in 1940 than to our situation in 1914, separated by oceans from any immediate threat to the country.

And today, we have a report on US companies investing significantly in Chinese semiconductor companies and related software providers.