With the holidays ahead, supply chain issues will get worse before they get better
AILSA CHANG, HOST:
To Houston now, where the supply chain bottleneck at ports in the U.S. is going to get worse before it gets better, especially with Black Friday and the holiday shopping season approaching. Now, this logistics backup is because of COVID-related factory shutdowns in Asia, coupled with lots of consumer spending here at home. NPR's John Burnett visited the Port of Houston, where cargo is stacked up everywhere.
JOHN BURNETT, BYLINE: When you click add to cart and expect those personalized decorative pumpkins to be delivered to your front door by tomorrow, you may not appreciate just how they arrived to American shores. It's complicated. There's a reason why global logistics management is now a college major.
(SOUNDBITE OF SHIPPING CONTAINER CREAKING)
BURNETT: That's the sound of your adorable pumpkins arriving - well, figuratively speaking. This container is one of thousands plucked off a huge blackholed cargo ship nearly as long as three football fields. It called at the Port of Houston last week on its way from the Bahamas to Malta. The container is dropped onto a waiting truck, which disappears into a canyon of steel boxes stacked as tall as a five-story building. Reality check - the main reason for the supply chain logjam is us.
ROGER GUENTHER: When everybody was staying home, and they were getting stimulus checks, they started buying. Since they weren't going on vacation and going to restaurants and buying services, they started buying furniture and bicycles and home improvement goods.
BURNETT: Roger Guenther is executive director of the Port of Houston, the nation's sixth-largest container port and number one in total waterborne tonnage.
GUENTHER: What you're seeing at our port and, you know, a lot of ports across the nation is this surge in import is really putting a strain on the supply chain. It's filling up our terminals, filling up all of our extra space. The container terminals are becoming the warehouse for all these goods.
BURNETT: The bottleneck is bad on both sides of the international supply chain. In Asia, manufacturers shut down for weeks as the delta variant raced around the world earlier this year. For instance, orders for Nike sneakers will be months late because of lockdowns at footwear factories in Vietnam. Over here, congestion at the Port of Houston is exacerbated by a shortage of truck drivers and trucks to haul containers. When there are not enough trucks to deliver the steel boxes to, say, the Walmart distribution center in a timely manner, they pile up at the port's storage yard, and then there's no room for arriving ships to unload their containers.
GUENTHER: We've had as many as five to 10 ships sitting outside, waiting for a berth.
BURNETT: It's not as bad as the Port of Los Angeles. Last week, there were nearly a hundred ships parked in San Pedro Bay, waiting for dockside space.
(SOUNDBITE OF ARCHIVED RECORDING)
CHRISTINA: This is Christina (ph). How can I help you?
BURNETT: For the freighters that anchor in the Gulf of Mexico, off of Galveston Island, it's welcome news when a dispatcher from the Houston Pilots Association sends a captain to guide the vessel into the Houston ship channel.
(SOUNDBITE OF ARCHIVED RECORDING)
CHRISTINA: All righty, Ruben (ph), I got your (unintelligible) with a draft of 8.5. That is confirmed, sailing out of 5TC7 (ph), starboard side going out to sea. That is for today at 1600. ISS picking up visual. Jorge (ph) will be the point of contact.
BURNETT: The backup at the port is rippling throughout the vast logistics community on Houston's gritty, industrial east side. Here at Canal Cartage Company, forklifts dart back and forth, loading pallets of T-shirts into tractor-trailers waiting to deliver them across the country.
(SOUNDBITE OF FORKLIFT BEEPING)
BURNETT: This warehousing and short-haul trucking company is working frantically to keep up. Chief operating officer Randall Morris offers me the Cub Scout tour of his work site.
RANDALL MORRIS: That is a container. They're basically like Legos. They sit on top of each other on the ship, and they lock them down. OK? When we go over to the port, they pick that thing up and put it on our chassis. A chassis is basically a piece of steel with wheels.
BURNETT: There's currently a worldwide shortage of chassis, which you have to have if you want to move containers on land. That's yet another glitch in the supply chain slowdown.
MORRIS: We probably have about 250 on order that have been on order for the last year. And they just - they can't produce them fast enough.
BURNETT: So let's review. The overseas factory has to produce. The container ship has to transport. The port has to receive. That truck has to deliver. The warehouse has to store. And the retailer has to get it to the customer.
So this is just - this is like an orchestra. It's all finely tuned, and everybody's got to play when their part comes up in the symphony.
MORRIS: Correct. And if one piece falls off - like, let's say, the maestro increased the tempo, and no one's ready for it - it all falls apart. And that's essentially what happened.
(SOUNDBITE OF ORCHESTRAL MUSIC)
BURNETT: And all of this is not just a matter of you not getting your stuff tomorrow. It affects the lives of the people involved in the logistics, like Josh Maddox, the 32-year-old warehouse supervisor at Canal Cartage. He says a couple of weeks ago, it was rough.
JOSH MADDOX: I didn't see my kids for four days, which is very unusual for me. I'm home at night. You know, I at least get to see them for a couple of hours before we tuck them into bed. But you get home at 7:00, 8:00, 9:00 at night, and it makes it tough, for sure.
BURNETT: So what's the answer? President Biden recently asked the Ports of Los Angeles and Long Beach to stay open 24 hours. The Port of Houston has tried later hours and opening on Saturday, but that's not a silver bullet, says BJ Tarver, CEO of Gulf Winds International, a local trucking company that works closely with the port. Tarver says extended hours are great in theory.
BJ TARVER: But I don't know that that's an immediate impact. You have to have an infrastructure that could support 24 hours a day, right? So drivers have to restructure their lives to be able to support that. Your customers have to be open to receive it and load it. It's not something that happens immediately.
BURNETT: Meanwhile, shipping costs, trucking costs, warehousing costs have all skyrocketed. These are windfalls for the logistics companies, to be sure, but a huge headache as well. Margaret Kidd, a supply chain and logistics expert at the University of Houston, says the Port of Houston is facing challenges, but they have a lot more space available than ports in Southern California.
MARGARET KIDD: What we really need to see is supply chain managers diversifying their ports of entry for imports. I mean, it is a classic risk mitigation strategy. So Texas Gulf Coast ports, Southeast Atlantic ports, Florida ports are all natural choices.
BURNETT: Currently, the Ports of Los Angeles and Long Beach dominate the container trade because West Coast ports are closest to Asia. At the Port of Houston, the largest share of imports also come from Asia, even though the ships have to sail 5,500 nautical miles further through the Panama Canal. But with California's glutted ports, Houston expects its container traffic to grow, along with Americans' insatiable appetite for online goods.
John Burnett, NPR News, Houston.
(SOUNDBITE OF AME'S "POSITIVLAND") Transcript provided by NPR, Copyright NPR.