Supply chain pain
Local government is in the same boat as consumers.
ackages that used to arrive overnight are now taking a week to show up. Auto repairs that formerly meant one day in the shop are now dependent on parts that may not be available for a month. The contractor you hired back in July is just now getting around to your project.
The disruption of the global supply chain has impacted nearly all of us in some way or another.
In May, the National Association of Homebuilders announced a record number of homebuilders were reporting material shortages, with appliances, framing lumber, plywood and windows and doors topping the list.
Auto manufacturers, predicting low demand for new cars, cancelled orders of semiconductors, an item that was already beginning to become scarce because of the increase in 5G smartphone technology. Ford Motor Company is lowering its projected 2021 year-end profits by about $2.5 billion, attributed to decreased production caused by the chip shortage.
How did we get here? According to Forbes, a pandemic-related drop in demand for goods in the early part of 2020 led to a decrease in shipping and manufacturing. By the middle of the year, however, the strong economic stimulus package brought the demand back up to pre-pandemic levels, but restarting the manufacturing and shipping industries was proving to be difficult.
The average price for a Chinese-made standard 40-foot container is approaching $6,000, more than double its 2016 cost. The post-lockdown jump in demand, combined with lower container turnover, caused prices to rocket higher. According to Drewry, a supply chain consulting firm, the average cost of shipping has jumped 323 percent in the past year, with the most dramatic increases coming from China—shipping from Shanghai to Rotterdam has seen a 570 percent increase, and a Shanghai to New York trip has increased 252 percent.
The blockage of the Suez Canal in March by the container ship Ever Given shut down the canal at a cost estimated by the BBC to be in the $14 million to $15 million range per day.
Once the goods make it into port, the difficulties continue, with a shortage of truck drivers. The American Trucking Association reports a 90 percent annual turnover rate for long-haul truckers. Trucking companies are attempting to reverse this trend with higher pay (the median salary for truckers in 2020 was $47,130). Walmart is offering truckers a $12,000 signing bonus in
Mt. Lebanon’s municipal departments experienced the effects of the broken chain. The biggest problem the fire department faced was a lack of personal protection equipment.
“We couldn’t find N95 masks anywhere,” said Fire Chief Nick Sohyda. As the department began monitoring the situation in China, early in 2020, they began stockpiling masks and other protective gear.
“We didn’t run out, and we were able to give Medical Rescue (Team South Authority) some,” said Sohyda. In return, Sohyda said the medics tried to prioritize the fire department’s response to medical calls, to help conserve the use of the equipment. Sohyda credits the department’s experience with the H1N1 pandemic in 2012 with preparing them about what to expect.
“H1N1 taught us a few things, and we’ll learn more from this,” Sohyda said.
Even when equipment and supplies were available, the cost was prohibitive, said Deputy Chef Sean Daniels, who saw prices on some items triple. Fortunately, the department was able to recover their inflated outlay of cash from FEMA.
Another boost came when the South Hills Area Council of Governments (SHACOG) was able to make a bulk purchase of PPE to distribute among local fire companies.
Cost of materials has had an impact on other departments.
“We have had some issues, but we’ve been okay,” said Recreation Director David Donnellan. “Har-Tru for the tennis courts was delayed, but we still managed to open on time. We had a chlorine scare in the spring and we stockpiled, but it turned out to be unnecessary. There is a shortage of tennis balls now, but we are in good shape unless it goes on through November or so.”
Donnellan had to delay some repairs because parts weren’t available, something that Public Works Director Rudy Sukal also saw.
“Most of the delays that we have seen are with materials that are on order by our contractors,” Sukal said. Lack of materials has also put Washington Road’s Vibrant Uptown streetscape project behind schedule.
Contractor difficulties notwithstanding, Sukal says public works is in good shape for the winter.
“We tried to anticipate some of the shortages that we became aware of and ordered materials before they were difficult to obtain,” he said. “We really have not seen an impact on our ability to provide services at this point.”
Library director Robyn Vittek has seen some delays as well.
“For the most part we’re seeing the same issues everyone is—our capital improvement projects are delayed while the contractors wait for parts and materials, and we’ve ordered things like book carts and a service desk for the teen area that are delayed, but our biggest issue is probably with our book vendors, Baker and Taylor. We pay for special processing, and they have been reimbursing us and shipping us the books for us to process ourselves.”
At the county level, requested materials from other libraries are taking significantly longer to make their way into patrons’ hands.
“The West End distribution center where our books are sorted and transported to the libraries also has a massive worker shortage which is causing the delays. Items which usually take days to get here can now take weeks.”
The crisis is far from over. Sohyda said the delay the department experienced in receiving new self-contained breathing apparatus came right down to the wire.
“We almost didn’t get them before the expiration date on the old equipment,” he said. “Even if stuff’s available, shipping time has gone from a few days versus a week or two.”
Plans for acquiring a new pumper truck may have to be adjusted slightly, as the manufacturers’ wait time has slid from 9 to 12 months to 14 to 15 months.
The police department used some creative problem-solving to fill a big gap. Replacement duty weapons came in—slower than expected—and once they got the weapons it was a challenge to find ammunition.
“It’s been a huge problem,” Haberman said. “We had to do some horse trading with some other law enforcement agencies to get what we needed.”
Although the price of bullets has increased significantly, sometimes as high as triple pre-pandemic costs, Haberman says those costs are in the consumer sector and don’t affect the department’s contracts with vendors.
The chip shortage ended up delaying the implementation of the department’s license plate recognition (LPR) software. The department originally planned an LPR rollout in the spring, but did not receive the components until July, with completed LPR kits not ready until late summer.
“We’ve heard warehouse shortages, we’ve heard Suez Canal, we’ve heard every excuse in the book,” Haberman says.
“We’re building extra time into our projects,” he said. “We have to be creative in how we make things happen.”