What is going on with Logistics?

[CMStPnP]

So my refrigerator is on the fritz and I tried shopping for a replacement and to my great shock, while the showrooms appear to make it look like everything is OK, most of the models on the showroom floor that have not been sold yet are backordered well into next Spring.    I am trying to order a specific Kitchen Aide Model............earliest it will be available is end of April 2021.    Whirlpool in Michigan makes the brand and they have stopped taking orders they just are adding to a long waiting list.     Apparently the pandemic has interrupted parts supplies from China and the company is unable to assemble new refrigerators on some assembly lines.    So they are pushing out the ones that they can make (which is not a lot of variety).     I am not sure if the problem is with just Whirlpool or extends to other brands like BOSCH (German).    Going to make more calls tommorrow though.   Never seen this happen before.

So I wonder if this means a surge in rail traffic downstream once the issue is fixed?

[BaltACD]

CMStPnP

So my refrigerator is on the fritz and I tried shopping for a replacement and to my great shock, while the showrooms appear to make it look like everything is OK, most of the models on the showroom floor that have not been sold yet are backordered well into next Spring.    I am trying to order a specific Kitchen Aide Model............earliest it will be available is end of April 2021.    Whirlpool in Michigan makes the brand and they have stopped taking orders they just are adding to a long waiting list.     Apparently the pandemic has interrupted parts supplies from China and the company is unable to assemble new refrigerators on some assembly lines.    So they are pushing out the ones that they can make (which is not a lot of variety).     I am not sure if the problem is with just Whirlpool or extends to other brands like BOSCH (German).    Going to make more calls tommorrow though.   Never seen this happen before.

So I wonder if this means a surge in rail traffic downstream once the issue is fixed?

I was 'web shopping' a dishwasher from Home Depot's 'Black Friday' offerings - expected available date late February 2021 or later.

JIT appears to be only a memory of years gone by.

[SD70Dude]

CN's traffic is surging already, our western Canada mainline is as congested as ever, just like in 2013-14 before oil prices crashed.  According to the western region GM our traffic is currently up 20-30% over pre-pandemic levels. 

So your Chinese-made washing machine parts just might be stuck in a Saskatchewan siding, waiting for a signal.

[Murphy Siding]

CMStPnP

So my refrigerator is on the fritz and I tried shopping for a replacement and to my great shock, while the showrooms appear to make it look like everything is OK, most of the models on the showroom floor that have not been sold yet are backordered well into next Spring.    I am trying to order a specific Kitchen Aide Model............earliest it will be available is end of April 2021.    Whirlpool in Michigan makes the brand and they have stopped taking orders they just are adding to a long waiting list.     Apparently the pandemic has interrupted parts supplies from China and the company is unable to assemble new refrigerators on some assembly lines.    So they are pushing out the ones that they can make (which is not a lot of variety).     I am not sure if the problem is with just Whirlpool or extends to other brands like BOSCH (German).    Going to make more calls tommorrow though.   Never seen this happen before.

So I wonder if this means a surge in rail traffic downstream once the issue is fixed?

 

You've just described the entire building materials industry. I doesn't matter where the parts come from, there are shortages of parts to build things.

[CMStPnP]

Murphy Siding

You've just described the entire building materials industry. I doesn't matter where the parts come from, there are shortages of parts to build things.

OK, so maybe this is partly due to increased new home building which is also at record levels.    One of the sales ladies on the phone stated they had to buy the appliances at auction just to get floor models in the store and even then they had to take what they could get as there wasn't a lot of ability to cherry pick.

[CMStPnP]

SD70Dude

So your Chinese-made washing machine parts just might be stuck in a Saskatchewan siding, waiting for a signal.

I think Texas imports via Long Beach in Southern California via Sunset route.    It would surprise me if it went through the Canadian Ports.    Canadian Ports do handle the Midwest stuff though.    I know CP in Milwaukee advertises it can ship via Canadian ports faster than West Coast U.S. Ports as well as being one line service to the port.

[JPS1]

 

I decided in early October to replace my old refrigerator before it gave up the ghost.  BestBuy said it would take six to eight weeks.  I turned to Home Depot and was able to get a frig in two weeks.  I ordered it online.  My first choice was white; it was not readily available, so I opted for brushed chrome.  Home Depot delivered it when promised, set it up, and hauled the old one away.

 

I am an avid cyclist.  My local bicycle shop has sold all of its inventory of new bicycles, with the exception of some electric bicycles.  The supplier has told the owner that it will be months before he can get any new bicycles.  That is the bad news.  The good news is his service business is going great guns.  Seems many folks that had not ridden their bike in decades decided to get it fixed up and begin riding since most of the fitness centers where I live are closed or highly restricted. 

 

I suspect a lot of U.S. manufacturers will rethink whether it is a good idea to outsource most if not all of their manufacturing capabilities to other countries.  If they bring some of it home or to neighboring countries, it could have a significant impact on how it is transported. 

[SD60MAC9500]

 

Lead time on most goods right now is 3-6 months. The backlog will extend into late 2nd, early 3rd Qtr 2021. Port capacity can't keep up. Many sailings are now 50-100 days behind..Container slots are about booked through March 2021. Welcome to the COVID crunch..

 

 

[SD70Dude]

JPS1

I suspect a lot of U.S. manufacturers will rethink whether it is a good idea to outsource most if not all of their manufacturing capabilities to other countries.  If the bring some of it home or to neighboring countries, it could have a significant impact on how it is transported. 

Especially with increased automation.  Robots earn the same wage no matter where they are in the world.

[Euclid]

Covid is no doubt part of the problem, but not all of it.  In winter 2018-2019, over a period of 7 months, I bought and received 4 refrigerators.  Two had 7 week wait time, with no guarantee of not extending it indefinitely.  Those two came in and were both damaged.  The first one, I was assurred it was not damaged so I drove 110 miles to pick it up, and could see extensive damage on the back from 20 feet away.  I canceled the deal, got a refund, and drove 110 miles back empty.  A couple days later, they wanted to make it right so they said if I buy another one, they would deliver it 110 miles for free. But that second one came in and they called me and said it was damaged, so they wanted to let me know before they delivered it for free.  They wondered if I could just position it with the damage hidden.  I told them I did not want it, so they cancelled without delivering. Two more I got from two different dealers, and got them home to find they made a lot of noise.  I returned both of them.  The very first one, I ordered and then they changed the terms to say I could not cancel the order and there was a 7 week delivery that they were free to extend, but I was not free to back out of.  I canceled that order in five minutes after placeing it.  The next day they told me they made a mistake in their terms.  This was the state of things a year before Covid.  Now, it is much worse, and prices are rapidly rising.  So I think it will get worse before it gets better. 

[CMStPnP]

I finally found a Home Depot with a 25 cu ft Whirlpool in stock.   I wanted white which was unavailable, so I had to settle for stainless steel.    My first choice of 25 cu ft was unavailable (Energy Star certified), so I had to go with another model that was similar.    At least I will get it by Monday.    Last one in stock at the Home Depot distributorship.    Lots of compromises had to be made by me.  2-3 days of calling around to various stores to see what they had in stock.

They need to really fix this mess.

[SD70Dude]

CMStPnP

SD70Dude

So your Chinese-made washing machine parts just might be stuck in a Saskatchewan siding, waiting for a signal.

I think Texas imports via Long Beach in Southern California via Sunset route.    It would surprise me if it went through the Canadian Ports.    Canadian Ports do handle the Midwest stuff though.    I know CP in Milwaukee advertises it can ship via Canadian ports faster than West Coast U.S. Ports as well as being one line service to the port.

Carload freight from western Canada to Texas often goes via Chicago and Memphis, and CN also does a brisk intermodal business between Prince Rupert, Vancouver and Memphis.  It wouldn't surprise me at all to find that they reach out as far as Texas from the Memphis intermodal terminal.

[tree68]

CMStPnP

2-3 days of calling around to various stores to see what they had in stock.

I had a similar experience.  Found out the company websites are not to be trusted.  I showed up at the store with my trailer, fully expecting to take the washer home with me. Not.

Ended up with a similar model, delivered to the house about two weeks later. Only had to hit the laudromat once.

[Shadow the Cats owner]

In the beginning of this year when the pandemic hit most of the excess capacity in the OTR industry was switched over to hauling desperately needed supplies for PPE food paper products medical equipment and such.  Then throw in government decisions on which businesses were essential and which weren't plus massive layoffs and production disruption worldwide.  Some of my drivers 8 months later are still operating on a HOS waiver meaning they are turning on average 6k miles a week solo.  I have one driver that in the last 6 months alone has run 200k miles.  If he stops running like that then one of the largest toilet paper plants in the USA runs out of paper treatment chemicals.  As his wife says when she comes in to get his paycheck stubs without him 25 percent or more of this nation couldn't wipe their rear ends in a week.

[greyhounds]

According to the Wall Street Journal the amount of money held in US savings accounts increased by two trillion dollars from February through October in 2020.  

Many folks have lost their jobs because of lockdowns, and those people who are still employed and earning have lost places to spend their money.  For example, I can’t go to a bar and watch a football game.  (I’m retired.)  Vacations are on hold.  This loss of the ability to spend means loss of employment for the laid off staff but it also means other folks have extra money in the bank to spend.  They’re spending some of it on things like new flat screen TV’s, new refrigerators, new washing machines, etc.  This stuff is overwhelmingly made in Asia and shipped to North America.

 

The supply of these goods was interrupted by the virus and inventories ran low.  Now the inventories must be rebuilt while the demand for the products also increases.  Eastbound container business across the Pacific Ocean is booming.  This means the eastbound ocean freight charges have increased considerably.  You know, that “Supply and Demand” thing. 

 

The eastbound revenue has increased so much that the ship lines are sending the containers back to Asia empty instead of waiting around for a westbound load of agricultural products.   The ship lines will forego the lower westbound revenue to get a much higher revenue eastbound load.  So now there’s a problem with US farmers finding containers unavailable for exports. 

 

Predictably, some of those farmers have gone running to the government in an effort to force the ship lines to provide containers.  This is also from the WSJ and it’s behind a paywall:

 

Maritime Regulators to Investigate Container Shortage Impact on U.S. Exporters - WSJ

 

I really do not like those farmers’ actions.   The farmers can have all the containers they want if they’re willing to pay enough, which they’re not willing to do.  So, they’re trying to get the US Government to literally confiscate containers owned by the ship lines and force them into low price service for the farmers’ own benefit.   The US farmers are simply attempting to control the use of someone else’s property.  They want to shift their financial burden to the ship lines through government edict. 

 

There has been a logistics disruption caused by COVID-19.  So, some people have to wait a few days for a product they want.  No big deal.  The market will work through it just fine if the government stays out of the logistics system.  And those complaining farmers can either pay up or go pound sand.

 

Edit to add:  I thought I'd just include the quote from the WSJ article.  I find it to be an amazing statistic.

 

"Despite all the spending on Peloton bikes, TVs and laptops, and despite the 10 million people who remain unemployed, between February and October, U.S. savings account balances rose $2 trillion, notes economist Ian Shepherdson of Pantheon Macroeconomics."

 

 

 

[BaltACD]

greyhounds

...

There has been a logistics disruption caused by COVID-19.  So, some people have to wait a few days for a product they want.  No big deal.  The market will work through it just fine if the government stays out of the logistics system.  And those complaining farmers can either pay up or go pound sand.

Farmers are just like any other internet users - they want free shipping.