by Stefan Stanford, All News Pipeline:
Supply chains are not something most of us think about on a day-to-day basis. Or they weren’t, until the last few years, when we’ve been exposed, at least on the right, to the fragility and susceptibility of said supply chains. This author works in the shipping industry and has a few thoughts.
First and foremost, one needs a rudimentary understanding of how the supply chain actually works, so here is a summation. Let’s call it Supply Chain 101:
1 – A producer creates goods.
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2 – Goods need to get to market, which is handled by shippers.
3 – Markets may be local, global, or anything in between, so the producer must tailor its shipping needs for supply chain movement accordingly.
4 – A carrier (any company that moves goods) is selected and contracted to move the goods.
5 – The goods are moved.
6 – The recipient, also known as the consignee, receives the goods.
7 – The consignee then either sells or redistributes the goods in accordance with the downstream contracts of the consignee.
8 – When the goods need to travel farther along the supply chain, the consignee then becomes the shipper.
9 – This is repeated as needed.
10 – Eventually, the goods are available to the consumer.
That’s the very simple explanation, and it took ten steps to get there. Planes, trains, trucks, ships, and even cars are all involved in the vital transport of goods. Trucks, more than any other mode of transport, are the most involved. Whether your shipment is a small parcel that fits in a 6″x8″ padded envelope and goes between adjacent ZIP codes in a small box truck or an FTL (full truck load) that requires a 40′ container that will travel by truck, train, and ship, in that order, then travel again by rail to truck, to get to its destination, the supply chain is a very well coordinated web of uncertainty and trust.
Logistics is hard, and it’s made harder by things from porch pirates, which everyone knows about, to container, large trailer, and small delivery vehicle theft, which is a lesser known threat, but very real, and sadly frequent.
The supply chain vulnerability is actually worse than most of us realize. Most Americans would be surprised to know that big “freight forwarders” — i.e., the people who book ocean-bound and air-bound cargo to come and go overseas — are almost exclusively foreign. So are many over-the-road truckers moving goods long distances within the U.S. Shorter distances, used to consolidate cargo in shipping terminals for same or en-route destinations, are almost exclusively locals, born and raised in the U.S.
Routes used to consolidate and transport freight for same or en-route destinations are called shipping lanes, and they apply to all types of transport, though obviously they are not identical. Sometimes these lanes become clogged, and the reasons vary greatly. But clogged is clogged, and consumers suffer most.
This last week, a company named Estes was the target of a cyber-attack. Estes may not be a name the reader instantly recognizes, but if you drive anywhere in the U.S. of A, you’ve seen their trucks. The tractors are black, with a yellow and red logo. The trailers are white, with a black, yellow, and red logo. They are the fifth-largest LTL (less than truckload) carrier in the United States, with approximately $4 billion in annual revenue.
As of now, their systems have been down nearly four full days. You can’t call them on their published numbers. You can’t access their website. You can’t track their shipments. You can’t get freight quotes. You can’t email them. In the shipping world, this could have been an absolute catastrophe.
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