The Sinking Supply Chain

The supply chain in the United States seems to be once again on the forefront of all news media outlets.  As farmers we rely heavily on trade, moving products out of the country for export, but also moving supplies into the country as imports.  And I’m also a mom who (like possibly a few of you out there) relies (arguably, possibly, too much) on the supply chain to also front porch delivery many items for our family.  I’m not a trade expert, I know enough to spread out the risk on our farm and try to make the best business decisions that I can.  So I reached out to those who are in the thick of this whole transportation situation and have been for a very long time.  Below is a recent article from BOSSCO Trading & Boshart Trucking.

It’s likely that you’ve seen something come across the news or on your Facebook feed now about the extreme congestion of container ships sitting outside of Los Angeles/Long Beach waters, waiting to berth, you’ve probably felt the impacts of supply chain disruption at home and/or your business.

All container ship traffic in the Western Hemisphere. There are many more ships out in the oceans (tankers, fishing, etc).

BOSSCO Trading and Boshart Trucking have been in the drayage/export shipping business for over 15 years, and these challenges are some of the greatest we’ve faced to date. And we aren’t alone; an experienced employee at Tyson Foods, who has been in logistics for 45 years said this is the worst he’s seen. There’s a lot of finger-pointing, but this isn’t an easy situation you can’t blame one party or fix with one solution. There is no silver bullet. The supply chain is not flexible and we are seeing that in full force, not to mention butterfly effects creating bottlenecks everywhere. Many are at fault, and many will need to work together to successfully work through these challenges.

Here are a few of the key issues and pressure points in our supply chain:

  • Americans are buying again.
  • Container Terminals/Ports are full.
  • Terminal Hours aren’t long enough.
  • Truck Driver Shortage & Trucking Regulation Challenges
  • A long list of other challenges and bottlenecks

Americans started making many purchases as soon as the economy opened back up after intense 2020 lockdowns.

This quickly emptied inventories of stores and factories, and thus began a race of imported goods from Asia to the United States in efforts to fill warehouses. As this race began, container shipping lines did all they could to get more goods to the U.S., such as loading empty containers to sail back to Asia (instead of loading with export goods) and adding every available vessel into the loop. Previously, U.S. exports were the back haul to help get containers to Asia, and as rates rose significantly, shipping lines no longer needed export goods to help move containers west. They saw record profits by prioritizing imports, and they have been greedy about it since. These volumes are likely to continue until warehouses have normal inventories, which could easily be through 2022.

Container Terminals/Ports are full.
American port systems were warned of an incoming surge of imports and as expected terminal grounds/extra warehouses all filled quickly. As a result of the surge, containers are being stacked higher and being placed in every nook and cranny to make more room.  But that’s not the only issue, the containers aren’t leaving as fast either.  Containers aren’t available for a trucker to pick up as soon as they are offloaded from the ship to the container terminal. It may take weeks before a container is unburied from a stack and available for a truck or to be loaded for rail. And of course the trucking issues (more on that below).

So the result of this is terminals that are full of both loaded import containers and loaded and empty export containers waiting to be loaded onto vessels. Which in turn leaves vessels waiting outside of ports until there is enough terminal space for them to unload. Which is why you’re seeing 70+ containers sitting outside of LA/LB.

Terminal Hours aren’t long enough.
In non U.S. terminals such as in Asia, many terminals operate 24/7, maybe closing for some holidays. U.S. Longshoremen say they are willing to operate extra hours, but in a world where no one works for free; there would be a bill to pay.  U.S. Longshoremen would charge the ocean terminal, who would then charge the ocean carriers. And unfortunately at this point, ocean carriers aren’t willing to pick up the extra bill for container handling without opening the door to renegotiating contracts. And as you can imagine, currently this is a non-starter.

Truck Driver Shortage & Regulation Challenges
Not only are there not enough drivers, but limited terminal hours and appointments also make it difficult for truck drivers to pick up containers. Some terminals require “dual” transactions, such as, you cannot return an empty import container without picking up a loaded import container. Some terminals won’t accept empty import containers because of the severe congestion, leaving a trucking company’s chassis to be the storage. With the increase in containers physically at the ports, importers have to wait for containers to be unburied.  This process is taking up to weeks before it’s even available for them to send a trucker to pick it up. But if marine terminals are going to add extra hours, regulations may also need to change to help make this a successful move in the right direction.

PNW (Pacific North West) vessels. Note the “squares” – those are anchored container vessels.

Regulation continues to tie the hands of truckers and the trucking industry.  Clean Energy mandates don’t help keep trucks on the road, rules around independent contracting for drivers just add more hoops for truckers to jump through along with added costs get passed on to the customer.  The trucking industry and truckers need consistent regulation that they can work with in order to plan out their weeks without going over their FMCSA hours of service.  Not only that, they also need the warehouses/distribution centers to have enough staff and longer hours to accommodate additional loads as well. The 24/7 port operation pledge will not work if all the players are not on board.

Long List of Other Challenges.
Everything as you can see is connected, which is why this is not a simple problem to solve.  This is also not a problem that will be solved by telling the private sector to figure it out, it won’t be solved by more government intervention, honestly, we don’t know how in the end this will get going in a better direction and unfortunately, it’s going to take a very long time.  For now all we can do is continue to flow with the changes, keep trying to be patient and continue to advocate for those things that will make improvements start to happen.

Thank you BOSSCO & Boshart Trucking for helping to keep us all up to date on what the supply situation looks like here in the U.S. Follow them on social media for many updates as this drama unfolds.

Here is another article that does some explaining from a very firsthand port experience from the CEO of FlexPort Ryan Petersen.  I think that this article gives some great descriptions of what is happening, but also offers some great real world solutions that could help right now. 

“We must OVERWHELM THE BOTTLENECK and get these ports working again.  I can’t stress enough how bad it is for the world economy if the ports don’t work.  Every company selling physical goods bought or sold internationally will fail.  The circulatory system our globalized economy depends has collapsed.  And thanks to the negative feedback loops involved, it’s getting worse not better every day that goes by.  I’d be happy to lead this effort for the federal or state government if asked. Leadership is the missing ingredient at this point.”

LA/Long Beach vessels – note the “squares” – those are anchored container vessels.

Will changes be made?  Will things start to budge at all?  Time will tell. But as BOSSCO said at the beginning of their article, one thing is sure,

“There is no silver bullet. The supply chain is not flexible and we are seeing that in full force…Many are at fault, and many will need to work together to successfully work through these challenges.”

If this blog wasn’t long enough for you….here are a few more articles that give more history and background on the entire supply chain situation.

Hot Weather in Oregon

We have been getting some above normal temperatures here in the Pacific Northwest. Last week we saw some record breaking temperatures go up into the 110-115 range (even higher in some areas), which made air conditioning feel incredible and the stress of what was happening to our crops not so amazing.

It’s hard to say how it affected our crops. When I walk around assessing what might be damaged it all seems very inconsistent. Some crops seem unaffected, while others have shown that it was clearly too hot for them.

We have green beans that were trying their best to bloom during this time. We poured the water on and I think escaped with not too much damage to the blooms, but the plant themselves have seemed to have stalled somewhat. Sort of like saying “What on earth was that??!!”

This is in an area that got consistent water through the hottest days.
These beans plants were on the edge of the field and only got about half as much water as the rest.

Our hazelnuts in some areas look like you took a blow torch to them; and in other areas they look just fine.

We had about half of our grass seed cut for harvest, and I’m sure knocked a fair amount of seed onto the ground while cutting in less than ideal conditions.

So when asked “How did the crops do in the heat?” I honestly have nothing more to say beyond “We will know more after harvest.” Because until our crops get trucked across scales it’s always a tough call on what the effects actually were. Until then we will keep taking care of our crops the best we know how, keep trying to protect them from the things that we can control, and pray Mother Nature is done with the “extremes” this year.

Please Don’t Silence the Rural Voice in Oregon

The Oregon legislature is currently taking on the enormous task of redistricting. This happens once every 10 years and coincides with census data. This year is a bit different because census data is not planned to be compiled until after the deadline of redistricting here in Oregon. So the question then becomes, how can this process be done fairly and accurately so as to not marginalize or silence the voices of so many? The answer is that it truly needs to be done by an independent commission, not politicians.

So why as a rural Oregonian do I even care about district lines? To answer that question you will have to check back with my last blog. A few weeks ago I wrote about a terrible experience where my rural voice was marginalized to about half the weight of those who were speaking in opposition to my testimony. I know I’m in the minority in many situations, but does that give my voice less importance than anyone else’s? It certainly shouldn’t. And yet I am supposed to sit back while our voice gets cut up into tiny pieces along district lines, just so this can continue?

When you break it down, you can’t deny the fact that rural voices are being marginalized. And this isn’t the first or the last time this will happen, we need to do better, Oregon needs to do better. Which is why I still showed up, just a few hours after being silenced, to testify yet again and try to be heard.

In listening to testimony on the issue of redistricting, I have heard people question the term rural and question MY identity. This is wrong, and it’s offensive.

Did you know…
**25 of Oregon’s 36 counties are categorized as “non-metro” rural, meaning they have no communities of 40,000 or more residents.
**Ten of those counties have population density of less than 6 people per square mile.
**Even Oregon’s most populous counties have many rural and agriculture-dependent residents.
**The lower population of these communities makes them more vulnerable to gerrymandering, where districts are drawn to dilute the voice of these rural citizens.

As a farmer, I know when something doesn’t work. When it doesn’t work, we must change the process. Having legislators choose their electorate is innately a conflict of interest – perhaps the greatest conflict of interest. Seeing how the committees are split up with majority Democrats, knowing the Democrats have control of the Secretary of State and the Governor’s office, I can only believe those that hold all the power want to keep that power, and will draw the lines accordingly. I also can’t help but notice both chairs (Rep. Taylor & Rep. Salinas) of the committee formed for this project are from the greater Portland metro area. I have spent enough time in the Capitol and advocating for the agricultural community to know how “understanding” Portland legislators are of communities outside Portland. In fairness I would also guess that I don’t understand a lot of what needs there are to be determined within the metro area either.

In listening to public testimony over the past multiple weeks, the overwhelming ask is to move this responsibility out of the hands of partisan politicians and into an independent nonpartisan commission and I completely agree.

We know how partisan and divided our state and country is. There is an opportunity to choose people over political power, and ultimately choose what is best for Oregon. The current political situation we find ourselves in makes it difficult, maybe impossible, to achieve fairness without political gerrymandering. Rural district boundaries have been superseded and overshadowed by larger metro areas, and because of this, has diluted voices just like mine.