Why Global Supply Chains May Never Be the Same | A WSJ Documentary

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πŸ‘οΈŽ︎ 1 πŸ‘€οΈŽ︎ u/AutoModerator πŸ“…οΈŽ︎ Mar 26 2022 πŸ—«︎ replies

Oh no! What will happen to the consumers and their increasing expectations of convenience?

πŸ‘οΈŽ︎ 51 πŸ‘€οΈŽ︎ u/peachy_JAM πŸ“…οΈŽ︎ Mar 26 2022 πŸ—«︎ replies

I work in logistics and am looking for a new job and potentially new career path altogether. The shortages are getting worse in terms of raw materials. I’m becoming quite depressed these days as my line of work in specialized medical supplies quite literally means life and death for many and we are not in a good spot right now.

Collapse isn’t something to look forward to or glorify in any way. It is full of suffering.

πŸ‘οΈŽ︎ 28 πŸ‘€οΈŽ︎ u/Angeleno88 πŸ“…οΈŽ︎ Mar 26 2022 πŸ—«︎ replies

SUBMISSION STATEMENT

Every day, millions of sailors, truck drivers, longshoremen, warehouse workers and delivery drivers keep mountains of goods moving into stores and homes to meet consumers’ increasing expectations of convenience. But this complex movement of goods underpinning the global economy is far more vulnerable than many imagined.

Behind everything we buy is a massively complex system that gets it from a factory to our doorstep. That system is maxed out and breaking down. And that may change life for many people around the world.

πŸ‘οΈŽ︎ 24 πŸ‘€οΈŽ︎ u/oheysup πŸ“…οΈŽ︎ Mar 26 2022 πŸ—«︎ replies

So maybe, some day in the future, we won't be so dependent on global supply chains? If we want to keep civilization chugging along for at least a few more millennia we really should be thinking about what a sustainable and resilient civilization would look like. Here is a reasonable option: www.aspenproposal.org

πŸ‘οΈŽ︎ 11 πŸ‘€οΈŽ︎ u/kentgoodwin πŸ“…οΈŽ︎ Mar 26 2022 πŸ—«︎ replies

To some extent, globalization was a mistake, for people's and cultures. Seeing McDonald's in Europe and Asia makes me fucking sad...

πŸ‘οΈŽ︎ 3 πŸ‘€οΈŽ︎ u/pooper_meister_5 πŸ“…οΈŽ︎ Apr 01 2022 πŸ—«︎ replies

Great video! Thanks for posting

πŸ‘οΈŽ︎ 2 πŸ‘€οΈŽ︎ u/doctorhoctor πŸ“…οΈŽ︎ Apr 09 2022 πŸ—«︎ replies
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look at this sold out can you believe this stuff so they were supposed to deliver it in october this is going to be an update on the kettlebell shortage of 2020. i just want my shoe give me my shoe please then i was supposed to be november no then december give me my playstation am i wrong for wanting this bro i mean everything just sucks lately take my money take my money i don't want it give me my shoe every time i check my email it's stuck on this right here i don't even know what that means tonight one word sums up the feeling along every line of the supply chain frustration well the shortages and delays in the global supply chain threaten a total paralysis when the pandemic hit businesses anticipated that the coveted recession was coming they thought that demand was going to drop but something funny happened the opposite of what all of these businesses and economists predicted happened demand exploded people bought things like crazy and now supply chains are choking on that record demand everyone has had the experience of not being able to get something and everyone has had the experience of paying more for something prior to the pandemic most of us just took it for granted that we could get things ever faster e-commerce made it seem like everything was right at our doorstep but that obscures what was a 14 000 mile journey halfway around the world it took months and when you add up all the automation all the algorithms all of the hundreds of people who had to touch those goods or transport them in some way it's in total one of the most complicated endeavors that human beings ever engage in and yet it happens millions of times per day and we take it for granted because all of that has been rolled behind this ultimate convenience of just one click e-commerce shopping but the pandemic showed us just how unsustainable and unrealistic that expectation is [Music] so consumer electronics like usb chargers they feel like they are readily available to us right we can get it the same day usb chargers are an interesting product they're relatively simple the key thing is those chargers don't sell for a lot so you have to keep your labor costs down and you have to really focus on efficiency the invention of the shipping container and ocean going shipping made it cheap enough to move manufacturing wherever labor costs were lowest global supply chains have really brought us a cornucopia of products that we might not otherwise be able to have as much variety as or as attractive costs that we see when you buy a product off of the store shelf or online that's actually the tail end of a journey that might have begun a year ago in a factory that might be half a world away [Music] vietnam has been attractive because of relatively low-cost labor if we take the example of a simple usb charger it's assembled in a factory in vietnam and then usually it's placed on a shipping container that travels on a barge to an ocean-facing port there it's loaded onto a ship for a trip across the pacific ocean [Music] the trip across the pacific ocean can take anywhere from 20 to 30 days [Music] working on a ship can be like living in an office that you can't ever leave it's high stakes and it's often mundane and boring [Music] because sailors tend to be confined to these ships and it's almost impossible for outsiders to get on or off of them this is a part of the supply chain that remains invisible to most of us a watch local is done visually and also by radar fortunately some of these sailors like to record their experiences the watch officer is in charge of the navigation and overall status of the ship safe navigation of the ship is the highest priority the fog is so thick in this area we can't really see around us so we have to use a radar each one of these container ships can carry up to 10 000 containers but they can have a crew as few as 20. so it puts enormous pressure on each sailor to do their job because if anything goes wrong the results are going to be catastrophic for supply chains the last thing we want is containers falling into the sea if we ever run into bad weather we keep watch on the overall conditions of the ship checking the mooring lines and looking out for suspicious activities like stowaways or pirates sea conditions like this can last for days the relentless pounding the never ending pitch and roll i can only describe it as living under a 24 7 airplane turbulence the biggest container ships are as big as a skyscraper laid on its side and one reason they've gotten so big is that when you look at all the costs crew fuel etc the bigger your ship the more money you can make on every container the cheaper it is ultimately to ship these goods but the bigger you make these ships and the more efficient you make these supply chains the worse things go when there's a bottleneck at one of these single points of failure the 400 meter long ever given got stuck on tuesday morning running aground in high winds reportedly after a power failure on board more than a dozen ships are waiting to pass through the suez canal that's one of the world's busiest trade routes and each day of backlog more than 9 billion worth of goods is stuck and that translates to about 400 million dollars an hour more and more shipping containers have been flowing toward us from asia and of course we're not really shipping stuff back [Music] [Music] now we see a large number of ships in san pedro bay eventually that cargo is going to land eventually it's going to hit the beaches [Music] as ports get bigger as more and more flows through the biggest ports they become single points of failure in a global supply chain that used to be more robust the port of los angeles and neighboring port long beach represent 40 of our u.s imports and nearly 30 percent of america's exports showing just how critical this gateway is to the american economy [Music] we have more than 15 000 international longshore and warehouse union members that work on the docks my job as a longshore worker is to help in the operations that move cargo through the terminals on long beach and los angeles ports what i typically do is drive a utr that stands for utility tractor rig it's just kind of a compact truck that's strong enough to haul the tonnage so what i do is i take cargo from point a to point b to a designated spot out in the yard to be stacked for outside truckers to come pick up to take to the retailer's destination we've been averaging 900 000 container units for 14 consecutive months that used to be one really good month in our peak season we use these giant ship to shore cranes to unload containers typically it takes three to five days but with all of the problems we're having right now productivity is suffering big time it's taking up to two weeks to process a ship that would typically take three to five days once a container is on the dock a mix of humans robots and software is going to be picking it up and moving it to stacks of containers inside the port itself where it's going to be sorted and re-sorted so that it's available for trucks or rail that are going to move it out of the port there is no room we've gone even higher in the piles for our ground cranes to have to dig through and we've also used every square inch available on our ports in order to put containers and it's very very hard to move them in a timely manner ports are in some ways amazingly democratic places which means that they're often very contentious places you have the longshoremen that's an extremely strong union you have the terminal operators you have the city of los angeles or long beach who actually owns the port you have the ships coming in and finally you have the drivers who are picking up shipping containers from the port if you want to make a change like maybe you operate the port 24 hours a day because you're trying to eliminate a backlog nobody owns that entire system and can just dictate that that happens there has to be consensus and consensus with these groups of people is very difficult congested ports and higher shipping costs have threatened to derail our nation's economic recovery after weeks of negotiation the port of los angeles announced today that it's going to be begin operating 24 hours a day seven days a week it does no good to keep a terminal open 24 hours a day in the hopes that truckers will come pick up a load at 3am because if they do they have to bring it somewhere so not only do you have to get a trucker who's willing to come at 3 a.m he or she has to bring it to the distribution center and that distribution center has to be willing to accept the load in the in the dead of night we're going to try everything we're increasing our gait hours number of days that we worked we're going to be working overnight we're required but we're also asking others to step up too and trying to find new ways to move cargo out we can't be a one-man show when it comes to 24 7 operations we're depending on the terminal operators to order the work and the rest of the supply chain to also open 24 7. [Music] when we get full on the docks that means everyone else is not functioning properly either and we really can't do anything about it until the other aspects of the supply chain start functioning properly when there's congestion in a port like this it just reverberates and the congestion gets worse and worse the more that shipping times slip the fewer ships there are to take empty containers back to asia so the entire system is like a traffic jam you know what starts as one person gawking at an accident pretty soon turns into standstill traffic for two hours for thousands of cars most goods like our usb charger when they leave the port are taken a short distance by truck to the inland empire region where they're processed in a warehouse before they're distributed to the rest of the country [Music] after our usb charger is unloaded from a shipping container the next leg of its journey is by long-haul truck that's okay right there am i getting lucky and get loaded early i'm probably going to be here about an hour i hope it possibly could be three we'll just see how busy they are today and and what's the uh what their schedule is like how fast they are i'm not rolling so i'm not making money so that's part of the problem is when you sit around and wait all this time the wheels aren't turning you're not not making any money i am a professional truck driver all told over 30 years i've been driving the truck there are 19 pallets did you want me to floor loaded you want me to double stack you're not going to pick up another load right no how heavy is it i'm an over-the-road driver i'm gone typically two weeks at a time roughly 3 500 to 4 000 miles a week hauling all types of freight everything from from housewares to rice to water to beer to name it you put it in that truck in a holiday the major strain on the long-haul trucking industry is that there aren't enough drivers willing to do the job in america now the american trucking association has projected that by 2028 america is going to be short 160 000 truckers you're talking about an 800 billion a year industry it moves 70 of the freight in the united states by value according to the department of transportation and without it we'd have paralysis you wouldn't get the things that you're accustomed to on store shelves nor would you get them delivered to your door i began studying the industry 15 years ago i was looking at the labor process and the work that truck drivers do and what had happened to it since deregulation of the industry in 1980. the current driver shortage has been talked about by the industry since at least 2005. the issue with the truck driver shortage is not one of a lack of people who have been interested in this job have gone through the trouble of getting trained for this job it's really a shortage of people willing to do that job long term and that that's you know fundamentally a retention problem not not a driver shortage well here we are a nice backup appears to be a wreck up here [Music] this could be a long time trucking used to be one of the very best blue collar jobs in the united states the the industry was almost fully unionized by the teamsters union unionized truck drivers were making up to 20 more than even unionized steel workers or auto workers it was one of the best jobs you could get and when you got one of those good jobs you were likely to stay in it until you until you retired and what happened was the industry was deregulated 1980 the union was pushed out of the big segments of the of the industry and and wages and working conditions followed [Music] trump driving his blue collar job there's nothing glamorous about it you know most the common person thinks oh anybody can drive a truck they don't take in consideration you're gone from your family you work long hours i typically work a 14-hour day my space structure is everything is based off of a per mile basis you have to manage your available time to drive to be able to make that and still take your 10-hour break how long are you gonna wait to get loaded how long does it take you to get loaded your clock is running and you're losing time that you can drive [Music] what the big limitation is for those drivers is that they they can only drive so many hours per day there are federal rules they have to record the hours that they drive and that they work now it's done electronically this clock has got a lot to do with when you can make your appointments you run out of time you legally can't drive [Music] if you get caught you'll get shut down the typical long-haul truck at a big company will only be actually rolling on the highway generating revenue seven to eight hours a day another seven hours or so of that day they'll be waiting they'll be performing other kinds of unpaid work and then for 10 hours they're required to take a break you're not paying the driver for the vast majority of that time you're really only paying them for the time that they drive new drivers might end up getting paid somewhere in the low 30s in cents per mile what that means in terms of total income is that a new driver might earn somewhere around 40 to 45 000 today and in many cases does not work out to minimum wage better paid drivers in that long haul segment can can work their way up uh to sixty thousand dollars or so an experienced driver for better companies can easily make more than a hundred thousand dollars a year [Music] there are about three and a half million truckers in america there are 10 million people in the united states who have the kind of commercial driver's license that would enable them to drive a truck so that's a measure of the number of people who've already turned through this industry [Music] so one of the peculiar things about trucks and trucking in america is that where every other part of the supply chain has consolidated and the big have gotten bigger trucking is still incredibly fragmented so small trucking companies which of course is the majority of the freight that's moved in the u.s they have a limited amount of leverage right they are selling their services on a market where the freight brokers and the shippers have all the advantages in terms of data in terms of being able to set rates and so those small trucking companies it's very take it or leave it for them in terms of loads the name of my company is avalon national llc we're based in cassadaga new york we're up to about 11 trucks right now and uh struggling like everyone else the driver turnover ours is getting higher now because we lost a few good drivers and we can't replace the good drivers that we lost we really had to work at making sure that our loads were paying well enough our drivers that were currently on the road were staying moving staying busy completing those loads but also taking into account that you know they are human and have a family and everything at home as well hold on this is the driver hey rocky it's ashley you're all set to pick up that load a little bit later she said just you know work your magic and try to get over there when you can they know you're going to be a little bit late due to your drop off time alrighty drive safe we've had trucks sitting for not having drivers which you know is is a big downfall for us you know it's uh something i shouldn't be doing but i again i should because i i'm short drivers so i'll drive the truck myself it's that critical i've owned a couple companies and it's a tough business to be into there's times i can't even get back to sleep i wish i could but i can't i just got too many worries all the time to recruit more drivers we've increased our pay to uh 71 cents a mile that's very good pay today 70 cents a mile we're trying to get our benefits a little bit better [Music] it's not the great cowboy experience it used to be it's more complicated the laws the regulations put you up against the wall to be able to meet not only your deadline or your appointment to get your load delivered but now you're fighting the clock in order to have a place to stay safely at night there's not enough room to park all the trucks on the road for a 10 hour stretch of time so if you don't get parked early you don't get parked [Music] or you can be like some of these guys you just pull over the shoulder road which is extremely dangerous to do and i'll come and break down the game buy up something to watch on tv i sleep generally about seven hours a night so by the time i eat and watch an hour or so tv i'm we made a new done about their newness try new flavors like our cheesy marinara baked apples hi give me a monster biscuit to go [Music] i'm probably running as hard or harder than i've ever ran in the whole time i've been driving the truck i'm 62 years old and i'm trying to last until i'm 70. lord willing my health holds up i'll make that that eight years [Music] so the stakes here are incredibly high the average truck driver is aging they're not being replaced if these dire predictions hold true within a decade we'd be looking at something like paralysis for the trucking industry this is really important right now because we're at this transformational period we're moving from the big box supply store to increasing e-commerce shipments and e-commerce is way more dependent on transportation than than the big box supply chain the ease of shopping these days online amazon those kinds of things where you get on your phone and you can for christ's sakes literally buy your groceries you're going to get it one way or another how much are you going to pay for it you know how long do you want to wait for it in 2021 people are not real patient for waiting for what they want because they're so used to being able to click click click and have it on their doorstep tomorrow but everybody needs to remember that no matter what you got it got there via truck so when our usb charger is on a truck its next stop is inevitably going to be some kind of warehouse it's often if you're talking about e-commerce what's known as a fulfillment center [Music] good morning everyone yesterday we received in 15 154 units eight asms and six sellers come on right up left one two three four five six one two three four as with trucking working a warehouse is a physically demanding job and that's one reason that companies have problems with turnover and retaining workers [Music] you're gonna go to ups take down with you you have to be fast fun and friendly you gotta have your mind to it and not get distracted when you have to lift boxes all day it gets very like you'll be going home achy and you'll be like oh i'm so tired most days it's tolerable then some days it's like oh it's it's draining everyone knows how to make a box right show up so everyone knows it's the bottom of the box all of them are brand new all of them are getting officially onboarded in anticipation of working either tonight or tomorrow night people we probably reached out to yesterday so you're literally talking from recruiting to onboard being on the floor in three days now and if i could go faster i would the shift to e-commerce means that even before the pandemic the fulfillment center industry was struggling to find the space and workers to keep up [Music] the covid related spike with e-commerce and direct-to-consumer has absolutely blown up our business in our entire industry and what's happening is it's a little bit like a snake eating a deer that your supply chain is the snake in the supply chain it says it's got this big bulge that's going through it as being processed we kind of anticipated the the bulge coming our way yeah i'm nervous because there's still more constraints it's not one deer that the snake is swallowing it's a lot of deers right in its simplest form a truck will deliver product to us we will count that product we will verify that product we will put that product away into a storage location and then we'll wait for an order an order will come we'll pick that product we'll package that product and then tender to the appropriate carry so you have in and you have out if the inn is greater than the out there's only so much space that the warehouse can manage [Music] we've managed space here by leveraging our optimization tools and leveraging our technology we have a goods to person robotics and we have person to good robotics both of those we are scaling up here in the facility so one of the big advantages about the new automation is that it's so flexible with the robots here we are two weeks before black friday and we're literally inducting robots right now to increase capacity divert is using technology really to drive the next generation of what we're trying to do from a distribution standpoint i'm on the cutting edge of trying to create technology and enable alternative networks to amazon fulfillment's really been defined by amazon so they've opened the doors and the rest of us are now finding creative ways to support that so at amazon there's this thing known as the promise the promise is we're going to get you your goods in two days but of course amazon has been raising the stakes throughout its entire life as a corporation so then the promise became one day the promise became same day the promise became three hours in order to achieve this in a fast and efficient way it's got to be automated as much as possible amazon of course has been a leader in this kind of automation but now everyone else is following suit [Music] we're a global third party supply chain provider [Music] the indianapolis campus specifically we have 12 distribution centers roughly about 4 million square feet of distribution space we utilize robots and technology in our facilities because we want to be able to get merchandise quickly to market so that bombay sorter is critical uh within the process of what we do from the time that we brought the bombay sorter online to now we are moving merchandise much faster out of that facility because of that level of technology [Music] another piece of technology that is critical is the robots these robots basically allow our teammates to pick much faster pick safer and be able to walk less within the facility if you look at how we used to pick manually we were picking about 70 units per hour and now with these robots we're picking 140 units an hour there's a speed component obviously but we definitely keep those capped at a certain level because it all comes back to safety you don't want a robot being at a extremely high rate which could have eventually caused some type of safety issue within a facility it's to coexist with the employee not to overtake the employee within the facility the introduction of technology can reduce the amount of walking and heavy lifting workers and warehouses need to do but it can also increase the pace and the repetitiveness of their work so how the tech is being implemented in each warehouse matters management sets the pace of the robots and that determines the pace which humans have to work in order to keep up the uc berkeley report found that the introduction of technology and the way it speeds up work can't lead to more turnover and burnout turnover at many of amazon's warehouses has exceeded 100 according to a wall street journal analysis of federal labor data and amazon's own site data well just finished a nice 12 hour long shift so i'm going from work uh amazon warehouse msp1 in shakopee minnesota home one of the downsides to working till 6 a.m is the sun coming up at least when you want to get to sleep [Music] i was a store and then a picker for what two and a half plus years your stocking inventory you're picking things out of the inventory [Music] when coveted hit i became a learning trainer so you train people hey nice open spot good morning some of the things that i train people on are like how to access a robotics floor safely how to fix individual pieces of equipment i've worked at amazon for four years now when i first started my feet hurt i would get blisters blisters suck after a long work week you will quite literally feel hung over the day after like just from the long hours like i feel kind of hungover right now from all of the just stress and strain that's put on your body so you have to hydrate a ton you need to get whatever sleep you can when i started working at amazon in the first month i lost 10 pounds so i had to eat a meal before work first break second break third break and after work just to keep my current weight you have to make different adjustments like that to your life to make sure that like you can physically make it through well i'm awake uh at least today is my last shift so tomorrow i'll be able to bring your mail over love you grandma one of the positives the golden handcuffs that a lot of people like that keeps them there in spite of the negatives there would be things like health insurance and the time off being flexible that was also very helpful it's still helpful like nowadays so like if you have you know family commitments or you're trying to go to school like i help my grandma all the time [Music] it's really helpful because you can use some of that time off to make that work with your amazon schedule you'll either mature in how you handle things to be able to handle different situations more effectively you know otherwise you're just going to burn out these warehouses are located at strategic points on our nation's highway system where land is cheap and widely available and so they tend to cluster [Music] so workers there actually have a lot of leverage or more leverage than they used to because they can just go to wherever is offering the highest wage okay so we're gonna have to re-palletize those so they can all sit at a certain point yeah please it's a very competitive things of working in a warehouse nowadays when you got different jobs that's offering you 22 an hour to come work for them i started off as a picker to manual picker to a packer and then i moved to shipping because i always said i want to learn everything in the warehouse that's my goal to challenge myself it gets very stressful some days you have your days to where it's a good day you have your days to where you just be like i'm trying to walk out it's different days to different things if you think of this in terms of how we live now there's been this grand shift between going to the store and buying your own stuff to paying other people to do it for us so it's this fundamental transition between how we used to shop how our consumer culture used to work and now how we shop online it's not a trivial change at all and it's a creator of millions of jobs in the meantime because somebody has to do all that work for us if labor continues to be a challenge we'll continue to optimize through automation and robotics to offset the labor issue but the reality is is that the cost of fulfillment will go up because the cost of labor will go up [Music] so the very last leg of the journey of our usb charger is coming out of a fulfillment center then it's going to end up being loaded onto a truck at what's known as a delivery station and that truck is what will carry it to its ultimate destination you know a business or your house [Applause] so one of the strange things about the new world that we live in is that when we order things online it's the last mile delivery driver who might be our only point of human contact with this entire system we might even know our local ups driver or our local postal carrier because they tend to have very consistent routes doreen likes her stuff inside because especially if it's going to rain other carriers sometimes don't leave it in the same spot and she's like searching the farm so i try to be very consistent every day i've been with ups for 32 years since 1989. i've been on this route for about 12 years going on like 13 years now it's okay here come here come here ready i know see everything's all good now the primary strain on last mile delivery is that we want so much of it even before the pandemic the challenge was how to hire enough workers to drive all of those delivery vans if you could transport yourself back 10 years and imagine the packages that you received at home they tended to be relatively high value goods you might have legal paperwork or electronics or some highly valued item that you know was was sent to you and most likely you had to sign for it e-commerce requires a much cheaper system so the folks who actually do last mile delivery they just like warehouse workers have to work to a very high standard they have to work at a very quick pace so typically at a place like ups they're training these drivers to economize every single action you have folks who have to operate like industrial athletes because they have to move so quickly and so efficiently while also of course navigating the hazards of america's roads [Music] so today we talked about three things we talked about keep your eyes open all right two seconds in the front five to eight seconds in the ring we talked about pounding one two three top one two three before you put your vehicle in motion after that vehicle in front of you starts to move so last mile delivery is extremely physically demanding because people are having to jump on and off a truck all day long they have to carry heavy packages and it's really as in warehousing the repetitive motion that can be damaging to people's bodies so of course people have to be trained to do this safely it's not just about lifting safely it's about lifting safely two or three hundred times per day so there's more than 500 methods to deliver one package i mean everywhere from the three points of contact that first step scanning my area i'm approaching the stop i'm scanning that area i'm singling okay i'm going to be parking here and i got my handbrake pulling my mirror i'm planning ahead okay i know that for this stop i have five big packages i know they're in the back okay so i'm going to pull up to this place put out the hand cart i don't even like realize it sometimes it's just i've done it for so many years that it's just it just it's like automatic i just know what i have to do how are you and i know how to get it done and be efficient and safe at the same time working for ups i don't have to pay for my own vehicle or insurance on this vehicle my health insurance is incredible i get paid pretty well we get paid almost 40 bucks an hour and after eight hours we get paid time and a half i know that ups isn't gonna go anywhere so when i go to retire in another six years i'm gonna be okay and so is my family [Music] we can't do the kind of bulk cheap transportation of of goods that amazon aspires to for instance with the kinds of services that we had with ups and fedex at the same price ups drivers for instance you know very well paid job good benefits and so what's happening in last mile is an attempt to create a much cheaper version of ups or fedex [Music] so the trend in last mile delivery has been toward contract drivers and it's a way to not just limit liability but also limit how much any one company has to be responsible for anybody's working conditions [Music] all right so it's 1 34 p.m and i have a block schedule from 2 2 5 pm there's been a fascinating story that's developed in last mile delivery it's almost exclusively driven by amazon almost entirely similar to uber and lyft which amazon calls amazon flex where people drive their own personal vehicles [Music] i do amazon flex delivery i also do a lot of psy side hustle like the gig economy apps like uber doordash instacart i actually i started signing up for the amazon flex during the the first lockdown for colvin i don't think you can do amazon flex full time because usually you only get about 30 hours of work you are responsible for your all your own expenses you know gas wear and tear oil change and all that basically it's like uber but with packages usually with amazon flex it start out like at 18 per hour for a three hour vlog so for a three hour block you would get fifty four dollars sometime the blocks would surge up to like 23 dollars per hour or sometimes 45 dollars per hour during peak seasons it can be lucrative if you're willing to be patient and leverage all the search peak season is definitely here so this block was uh three and a half hours for 150 750 fam that's the biggest three and a half hour block pay i ever seen you know that's like 45 an hour mostly i get country routes from one delivery to the next is about six miles drive i've been putting a lot of miles on my car as far as physical work a lot of time is light envelopes and just a lot of driving it's usually the different route every day i think it's inefficient because you don't really get to learn your route your or your delivery area in order to keep up with its own demand for last mile delivery amazon had to create a last mile logistics network just like ups's or fedex but theirs consists of subcontracted local delivery companies that actually own and operate the amazon brand advance and so what they've moved to is a relatively unique approach which is a kind of franchise and so now they you know you can buy 40 vans from amazon or lease them as an entrepreneur you can hire up to 100 drivers and what they call a dsp delivery service partner and then amazon does all of the planning so they put all the packages together label them plan the route and then your drivers of your franchise will take a van that you own with an amazon logo on it and drive to the fulfillment center load it up and then follow the route that amazon provides on their phone [Music] i've been working with amazon flex for about two years now i also used to work with amazon dsp for about another 10 months driving the blue band was i think it's a very physical job sometimes you have like 200 stops and 300 packages in like a eight hour or ten hour shift my most ever stops in one day was like 240 stops it is where it is do your job make sure you uh come home in one piece you have to be on pace uh with the amazon's expectation of uh 20 stops per hour so one of the effects of using subcontractors in order to do your delivery is that when drivers are pushed to make more and more stops per day if that leads to an accident then the parent company is shielded from any legal liability and i think that'll be the central question of the next you know decade or so for amazon if they continue on this model is you know what responsibility does amazon have for those workers and and what they do out on the roads [Music] [Music] amazon has already become the primary carrier of its own packages now it's touting that it expects to be ups and fedex at their own game we expect it will be one of the largest pairs in the world by the end of this year i think will be probably the largest package delivery carrier in the us amazon's delivery network is growing at a rapid pace from 2019 to 2020 its share of us parcels by volume grew from 13 to 21 which at this point makes it bigger than fedex last mile delivery work which has been fairly high quality work until recently is facing a similar kind of decline that long-haul trucking experienced after deregulation so the job's being de-skilled workers are paid less and less over time and it's causing very high levels of churn with within subcontractors for four major companies we are going to need to hire hundreds of thousands of of last mile delivery workers to meet the needs of e-commerce in the in the next decade or so and we may have a shortage of those kind of workers in the future when i was working for the amazon delivery company i didn't see any future or any career advancement you know so i i just quit [Music] i really like the amazon flex work because it gives me a lot of freedom to choose [Music] i know there's a blind spot here because this is my route and i've been doing it for 12 years so i know all the little hidden things that uh that i need to be aware of so the very last leg of our journey is a human being picking up a box and walking into our front door and our entire involvement with the supply chain up to this point might have been as minimal as opening a website or an app clicking buy now and then that product arrives the very next day when you think about ordering a usb charger online and having it delivered to your door that's really a remarkable accomplishment it's not a very expensive device and it came a long ways from the factory that relied on was inexpensive transportation inexpensive labor and efficiency all along the way we've really been benefiting from a very benign global trade environment for the last 25 or 30 years and what the pandemic has shown us is that maybe that's not necessarily a good assumption what the pandemic really highlights for us is how vulnerable a lot of those links are to disruption consumers are finding themselves having to adapt to the frustration of intermittent shortages not being able to get what they want because one thing or another can't get through the supply chain beyond shortages obviously one of the biggest impacts of supply chain issues are increased prices it's difficult to predict the persistence and effects of supply constraints but it now appears that factors pushing inflation upward will linger well into next year challenges in supply chains make it difficult to fight inflation with the usual tools which is adjusting interest rates the most powerful financial institution in the world is telling us that interest rates aren't necessarily enough to deal with all of this inflation as a result of these supply chain challenges companies are rethinking where things are manufactured and how far they have to travel in order to get to us one of the questions that a lot of people have asked because of the pandemic is about all this manufacturing that has moved offshore and can we move it back onshore that was really driven by the labor cost differential which was substantial so moving from a high cost country to a low-cost country economically that's pretty straightforward moving from a low-cost country reshoring to a high cost country that's a whole different question we'll see some but we shouldn't underestimate the challenge it's a big day for the tech industry in texas samsung officially announcing it's bringing a 17 billion dollar semiconductor factory to taylor companies like samsung have pledged tens of billions of dollars to build factories for manufacturing microchips within the united states intel specifically has pledged 20 billion dollars to build a facility in ohio this is a major win for ohio and it's really a game changer a game changer for our economic future it shows just how big of a problem these supply chain issues are and just how different the present is from any point in the immediate past i think what we saw during the pandemic was an inability to rapidly shift to meet changing patterns in demand the question we have to ask is is it likely to happen again [Music] [Music] you
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Channel: Wall Street Journal
Views: 4,297,587
Rating: undefined out of 5
Keywords: supply chain, supply chain management, supply chain issues, supply chain crisis, what is supply chain management, supply chain backlog, supply chain shortage, shipping, economy, supply chain strategy, manufacturing strategy, supply chain solutions, supply chain shortages 2022, supply chain 2022, supply chain bottleneck, logistics, supply chain logistics, wall street journal, wsj, wsj supply chain, supply chain documentary, trucking, amazon, delivery, pandemic, covid, supply chain news
Id: 1KtTAb9Tl6E
Channel Id: undefined
Length: 54min 43sec (3283 seconds)
Published: Wed Mar 23 2022
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