There always seems to be a new stone to overturn in the global supply chain crisis. One of the almost farcical delays facing outbound shipments from Asia is that there just aren’t enough containers making their way back to be refilled. The problems that manifest in ports or cargo shipping lines slowly reverberate to other areas of the chain, and then back to where they started. So where are all these cargo containers? A recent Washington Post article reported that a lot of them are stuck on railway lines.
Inland rail yards have emerged as the latest pain point for companies trying to move goods internationally. Trains full of clothing, computers, furniture and appliances have been streaming for months into Midwestern hubs.
When the system works as designed, containers are lifted from arriving trains and placed directly onto a wheeled chassis, which is then hauled away by a local driver. The chassis is quickly unloaded by the final customer and returned to the rail yard.
But this year’s flood of cargo has overwhelmed the system, leaving the yards without enough chassis. So containers have piled up by the thousands.
Rather than a single movement from train to truck, containers now are lifted off, placed in storage and then moved a second or even third time before eventually exiting the yard, according to Lawrence Gross, a transportation consultant in Durango, Colo.
Even when goods get to their final destination, there are still logistics issues.
Learning Resources, which designs its products in the Chicago area and manufactures them mostly in China, is accustomed to a steady flow of 20 to 30 containers each week.
When 70 arrive, Woldenberg won’t have room to unpack the boxes of toys, games and puzzles inside, repack them on wooden pallets and move them into inventory. He already has raised some retail prices by up to 30 percent to cover the increase in his freight costs.
Sorting and managing the goods at their intended destinations is increasingly complicated, which means more staff and space is needed, incurring further costs on top of more expensive raw materials and logistics. Scale the above numbers up for bigger companies and it’s hard to imagine this getting better quickly.
Similar flare-ups are occurring in Bangladesh, Cambodia and Indonesia, said Steve Lamar, CEO of the American Apparel and Footwear Association.
“Nobody can get anything,” he said. “Do your Christmas shopping now.”
There are all kinds of landmines going off in global supply chain and the Washington Post does a good job highlighting them, but especially the recent rail issues. Read the whole article here.