Good thread, I should've expected more supply chain professionals on here as big as this site is.
@DrBanneker basically hit the nail on the head.
Supply chain is interesting because you see economic impacts before they trickle down to the common person.
I'm a logistics manager, but my role overlaps with a lot that is being said I here. I manage warehouses specifically, but I have direct relationships with our internal manufacturing plants, 3PMs, procurement, CSC, real estate, and planning groups.
I actually manage the pallet relationships for our NA supply chain. We use everything from white wood, to CHEP, to PECO, to IGPS plastic pallets. My company is actually one of the biggest purchasers of plastic pallets in the world.
Depending on the region we had contracted rates of 4.75 to 6.00 a pallet. We're paying double that on many shipments because our providers can't support the volumes that we are requesting. In some cases we are purchasing grade A heat treated pallets for domestic shipments, which is fukking absurd, but we have to do it because grade B refurbished are not available in the quantities we wanted.
For labor, most of our warehouse jobs pay $15-17 an hour. We're finding that not only is $20 not enough, but we have to pay sign-on bonuses of anywhere from $500-2000 dollars. In some cases, we have even had to pay to get people to interview.
For drivers/carriers, we have had to pay premiums for loads to be hauled, because carriers don't have enough drivers, and if you're a trucking company; like I said in the other thread; you're not going to turn down more money. So with your limited driver and equipment resources, not only can you charge a premium
BUT you are being
OFFERED a premium because we the customer have to get these loads out. Look at the DAT ratio. This is the amount of loads to available trucks. If the ratio gets too imbalanced, you will see significant price swings for shipments.
Don't even me started on warehouse space. I'm paying an extra $58k a month in Georgia for a building and most of it is sitting empty, because if we didn't get it, it was going to be gone and that would've affected upstream finished goods production because we have no where to put it.
Production capacity at our plants is 130% of their capacity and we still can't hit our forecasts, therefore we've pretty much blown all of our internal budgets and really at a position where we are shipping everything we can at all costs.
It's going to be wild for the remainder of the year at least. And all of it is going to trickle down to higher consumer prices unfortunately.
.
. What is the cause of this, is it covid
