Tags: Purchasing, Supply Chain
With a Covid-19-induced labor shortage and supply bottlenecks at the nation’s ports and warehouses affecting both businesses and consumers, customers of The Macomb Group can rest assured the company is working tirelessly to keep its parts inventories fully stocked.
According to Purchasing Manager Brandon Perilli, who oversees the supply chain of the company’s approximately 26,000 individual parts, the labor shortage, especially among port workers and truckers, has been the most disruptive impact he’s ever witnessed.
“At the ports, drivers who haul containers to warehouses and staging areas are compensated not by the hour, but by the number of loads they are able to transport per day,” Perilli explained. “The labor shortage at the ports is reducing the number of loads being transported by 50%. That translates into a 50% cut in pay for the truckers. Who wants to do that type of work under those circumstances?”
The ongoing truck driver shortage is now estimated at 80,000, up from 61,000 just three years ago. A new study by the American Trucking Association (ATA), estimates that the industry will have to recruit one million new drivers within the next nine years to replace retiring drivers.
And according to the Bureau of Labor Statistics, the average age of a commercial truck driver in the U.S. is 55 years old, with an alarming amount of these drivers retiring within the next 10-20 years.
Perilli said that PVC products have been the most difficult products to readily obtain.
“The shortage started about a year ago when Texas, a leading place for resin production, suffered sub-freezing temperatures,” he said. “In addition, the hurricane season affected several resin manufacturers, and many repairs had to be made. Coupling that with the labor shortage, PVC continues to be a difficult commodity to acquire.”
The Macomb Group has stepped up to address supply chain challenges with several strategies, says Perilli, including broadening its vendor base, strengthening existing vendor relationships, and boosting its product inventory by 18-20%
“We’re trying to carry more inventory whenever we can,” Perilli explained. “When we would otherwise keep 100 parts on the shelf, we’re now stocking 300 pieces, working to stay ahead of the curve to serve our customers.”
Will these supply bottlenecks continue into next year? For now, the future looks murky.
According to the Wall Street Journal, the global supply-chain struggles are “beginning to recede, but shipping, manufacturing and retail executives say that they don’t expect a return to more-normal operations until next year.” Those same executives noted that cargo will continue to be delayed “if Covid-19 outbreaks disrupt key distribution hubs.”
Staying focused on the challenges, The Macomb Group is working through all of the issues head on, allowing it to continue supporting clients needs, and work through what are clearly unprecedented times for the all aspects of the global supply chain.
