Dive into logistics and supply chain woes with industry expert Blazo Gjorev.
Empty shelves, hard-to-find computers, year-long waits for the hottest cars and trucks, people the world over are facing shortages pretty much unseen in modern times. Arguably, shortages now are worse than they have been since the Second World War. Logistics expert Blazo Gjorev digs in.
“Shortages happen all the time,” Blazo Gjorev notes, “but the scale of shortages right now is pretty much unprecedented, at least from a global perspective.”
Ford, for example, stopped accepting orders for its new Maverick pickup truck. Why? Because needed components, including computer chips, are hard to come by. If you want to order a Maverick truck, you’ll have to wait until at least 2023, and even then supply is no sure thing.
With computer chips, in particular, ramping up production can take years. Manufacturing requires complex robotics, clean rooms, skilled engineers and other employees, rare metals, and much more. While Intel, AMD, and other chip manufacturers are working to boost production, shortages may persist for some time longer as capacity is set up.
“You may not realize how many things now use computer chips,” Blazo Gjorev explains. “Semi-trucks and cars can have hundreds of chips, your fridge, washer, and other appliances likely have chips too.”
You might wonder why computer chips are in short supply now but weren’t a few years ago. For one, the COVID-19 pandemic idled many factories and other operations, thus decreasing supply. This is true not just for chips, but for many other things as well. Mufflers, shoes, dinnerware, the pandemic impacted production across the board.
Further, demand has also spiked for many products. With chips, for example, work-from-home and online schooling have created a surge in demand for computers and other devices.
Meanwhile, a hot economy means many people and organizations have more money to spend, and as a result, some folks are willing to pay hefty markups. This has sent prices upward.
“Certainly, new and used semi-trucks are expensive right now,” notes Blazo Gjorev, “because trucks are in such high demand.”
Blazo Gjorev Talks About Shipping and the Labor Shortage
Further, the supply shortages experienced now also appear to be linked to shortages in the labor market. Logistics depends on people, from truck drivers guiding semis, to sea captains sailing the oceans between manufacturing bases in say China, and big consumer markets, like the USA and European Union.
Right now, the logistics industry, like most other industries, is facing labor shortages. This can compound issues, like logjams at ports. Many ships are stuck in the water, unable to unload their containers. Even once containers are unloaded, it’s hard to find truck drivers who can move cargo across the land.
While Blazo Gjorev’s trucking business continues to attract a lot of great employees, some companies are struggling to get drivers behind the wheel.
“It’s a good time to be a truck driver,” Blazo Gjorev argues. “You can often find jobs quickly, and compensation is rising. And the current environment suggests that truckers will be in a great spot for years to come.”