Monday, April 06, 2020

Supply chain strained: sometimes you can't get what you want

This morning I ventured out to the grocery store, all be-masked and gloved, taking advantage of senior hour. It wasn't so bad. The only must-find items I wanted -- matzah, grape juice, and wine -- were easy to find. In general the store seemed well stocked except for frozen vegetables. Not bad. But my happy experience in wealthy San Francisco may not be representative of what's happening in the food supply chain.

The powers-that-be keep telling us not to hoard; there's no real problem with getting food to all of us locked away in our cities. (So long as we can afford to buy, that is. I'm sure people who find themselves without a pay check aren't feeling so confident.) Some sample stories and where some glitches happen:
No need to hoard: There’s plenty of food in the system
Don’t be fooled by the barren grocery store shelves: There’s plenty more food on the way. ... “If you see depleted rice shelves in your local grocery store, it is not a supply problem; it is a signifier of changing logistics in the retail market,” said USA Rice President Betsy Ward in a statement.
The Supply Chain Is Fine. So When Will Everything Be Back In Stock?
Demand for toilet paper is generally pretty stable, which makes it even more likely to be out of stores for some time. "It's not like [manufacturers] have a lot of surge capacity they can suddenly bring on. They can maybe work a little bit longer, but most of those plants run 7 by 24 anyways," said Shih. ... Manufacturers [of hand sanitizer] have to decide whether to just ramp up production using existing infrastructure or to invest in new facilities — which would take additional time, and may not pay off when demand dies down.
Several years ago, Cronig's built solar arrays over its parking lots.
On Martha's Vineyard island off Massachusetts where we lived last fall, much of the grocery business is dominated by a locally owned independent chain named Cronig's consisting of two stores. The owner, Steve Bernier, shared with the local newspaper what the experience of the pandemic has been like from within a very personal business.
“So the crazy day here was Friday March 13,” Bernier said. “At Cronig’s, the third of July is always our busiest day of the year. We surpassed that by 30%." ... “We got scared,” he said. “It was out of control. ..."
In the summer, the stores employ shifts of temporary workers -- the island population balloons from around 15,000 to 100,000 in summer. Now, suddenly, Cronig's pattern of supply was thrown into chaos. Food for the island, all carried in via ferry on trucks, ordinarily is destined for both grocery stores (there are two others besides Bernier's) -- and restaurants. The shutdown means no restaurants. But no trucking company wanted to send over a partially empty trailer truck.
Then shipments started to shrink. “The next 10 days, the trailers came with less and less product.” At the time, everybody just soldiered through without much reflection but now Bernier said something has become evident.

“Looking back now the pattern was starting to develop that the warehouse was emptying out,” he said. Over the next week, Bernier said he had calls with a key warehouse and they didn’t seem to realize what was happening either. Bernier said the revelation was “they’re in as much trouble as we are.” Modern efficiency is one cause of the shortfall in supply, Bernier said. The world is on demand with no surplus today, he said. And because of that, when the pandemic came, he said, “our pants were around our ankles.”

Bernier pointed to a regional supplier, Sid Wainer and Son of New Bedford, a company that recently changed hands. He said 95 percent of that company’s business comes from restaurants. Cronig’s regularly buys from them and all of a sudden “they don’t have anything.”
That development scares the grocer. For the moment he's getting what people need, but the supply chain to purchasers who don't buy in corporate or industrial scale is being damaged, perhaps permanently.
The knock on effect, he said, is that if companies like Sid Wainer and Son go under, when the restaurants open back up, the suppliers they rely on won’t be there.
There have been other hurdles in the supply chain that show the failure of federal oversight in the emergency.
Trucks that come to Cronig’s are often interstate, he said, and that’s become problematic.

“We heard from a truck driver,” he said. “He was heading across country to New York — going east — and was stopped on the border going into New York. A state trooper stopped him and said you don’t have New York plates. Get out of here.”

That driver was going through New York and Massachusetts to get to a distribution hub in Brattleboro, Vermont, C & S Wholesale Grocers. He had “product we needed,” Bernier said. 
I thought having a "United States" federal government under the Constitution was the mechanism the country chose over 200 years ago to avoid that sort of thing.

Every day brings new challenges.
“We’ve been receiving no milk. Guy says to me, ‘are you ordering milk?’ I said yeah, we order milk every day. He says, ‘well where’s the milk?’ I said if it ain’t here, it’s probably in the cow.”

He added, “I don’t know what’s going on. There’s no communication with that stuff. Today we received our best dairy load, our best grocery aisle load that we’ve had since day one of the problem. But I don’t know what tomorrow is going to bring.”
Actually, this Reuters report explains where the milk is going.
U.S. dairy farmers dump milk as pandemic upends food markets
Despite strong demand for basic foods like dairy products amid the coronavirus pandemic, the milk supply chain has seen a host of disruptions that are preventing dairy farmers from getting their products to market.

Mass closures of restaurants and schools have forced a sudden shift from those wholesale food-service markets to retail grocery stores, creating logistical and packaging nightmares for plants processing milk, butter and cheese. Trucking companies that haul dairy products are scrambling to get enough drivers as some who fear the virus have stopped working. And sales to major dairy export markets have dried up as the food-service sector largely shuts down globally.
So it goes amid this poorly managed pandemic. Thank goodness for state governors and all the essential workers still trying to patch up broken links within and between communities.

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