In Chicago, one of the country’s largest railyards – the size of 500 football fields – was at one point backed up for 25 miles…Cities like Chicago and San Antonio – the busiest international land gateway in the country – have been particularly affected by the bottlenecks.
With that said, where exactly do the train delays in the Chicago region fit within the larger supply chain problems? Most of the news I have seen on the topic emphasizes the problems at major coastal ports where ships are waiting to be unloaded. If the ports could move through the goods already waiting, would they simply then get stuck in Chicago and similar locations?
If the problems in the Chicago region are confined to railyards and intermodal facilities, I would guess most people in the region have little reason to know about the issue. They may notice empty shelves in stores but not know that some of the goods might just be a few miles away on a railroad track. Unless you happen to drive by such locations and see something – and some of them and their activity are visible from major highways – or hear something specific in the news, the supply chain issues could be anywhere.
Well, he reportedly lives in the Casita, a $49,500 375-square-foot unit created by Las Vegas-based Boxabl…
According to Tiramani, other prefab home makers struggle with one glaring issue: shipping logistics.
But unlike other prefab homes, the Casitas can be folded down from 20 feet to about 8.5 feet while it’s being transported on a truck or towed by a pickup truck…
So when the Casita arrives at its final destination, the home just needs to be unfolded (which takes a few hours) and then attached to its foundation and utilities, before it’s totally move-in ready.
This sounds like an Ikea like solution to furniture: get the house down to a smaller package so that it can be easily transported. Then, at the location, you assemble the product. All of this cuts down on costs. Do not underestimate the importance of shipping and logistics; for example, companies like Sears, Walmart, and Amazon mastered shipping and logistics in ways that helped them sell a lot of goods.
More broadly, the mass production, easier shipping, and modular capabilities of such homes offers lots of opportunities. Mass produced housing as we know it – think Levittowns and large builders constructing subdivisions of suburban homes over months – has endured much criticism. At the same time, this mass produced tiny house comes in a more reasonable price point, could be available to more people, and could be customized. There is still an issue of having people to put these homes together and having land; this might tie this mass production to tiny house subdivisions or clusters.
Images from this week of the Ever Given wedged in the Suez Canal are fascinating. Such a situation raises a lot of quick questions – such as “how did this happen?!?” – but there are bigger issues at work. For example, how and when does infrastructure adjust when the needs increase?
The incident could raise new questions about the container shipping industry, which moves 90 percent of the world’s goods, and its increasingly gigantic ships. Demand for shipping goods by sea has surged during the Covid-19 pandemic, with spot prices for empty containers moving from China to northern Europe rising by more than 400 percent. In response, shipping lines have loaded gigantic vessels like the Ever Given with record numbers of containers. Ships have run into some trouble. The industry has lost more cargo into the sea in late 2020 and early 2021 than in prior years. “We’re going to get to a point where the ships are so large, it becomes a burden,” says Byers.
Goods traveling via containers – whether on ships, trucks, trains, or other means – are essential to modern economies. As markets grow and expand, there will be more shipping containers moving around the globe. That means infrastructure needs to expand. More trucks and roads. More trains. More intermodal facilities. Canals that need to be wider.
This happens primarily behind the scenes. Consumers see goods on shelves or they are delivered from vast warehouses and all is good. It is only when something goes wrong in these systems, such as a 1,300 foot ship getting stuck in a major international shipping route, that we note the tensions and the limits. Changes will be made on the Suez Canal to limit the possibility of this happening again and the shipping containers will continue to flow. Until the problem arises again or larger changes need to be made…
Water traffic within the United States might not garner much attention compared to rail and truck traffic (perhaps except during seasons of drought) but it still accounts for a lot of goods and has a historic role in opening up the interior of the United States. For example, the connection between the Great Lakes and the Mississippi River through a canal and several rivers was critical in leading to the growth of Chicago.
And yet pallets are arguably as integral to globalization as containers. For an invisible object, they are everywhere: There are said to be billions circulating through global supply chain (2 billion in the United States alone). Some 80 percent of all U.S. commerce is carried on pallets. So widespread is their use that they account for, according to one estimate, more than 46 percent of total U.S. hardwood lumber production.
Companies like Ikea have literally designed products around pallets: Its “Bang” mug, notes Colin White in his book Strategic Management, has had three redesigns, each done not for aesthetics but to ensure that more mugs would fit on a pallet (not to mention in a customer’s cupboard). After the changes, it was possible to fit 2,204 mugs on a pallet, rather than the original 864, which created a 60 percent reduction in shipping costs. There is a whole science of “pallet cube optimization,” a kind of Tetris for packaging; and an associated engineering, filled with analyses of “pallet overhang” (stacking cartons so they hang over the edge of the pallet, resulting in losses of carton strength) and efforts to reduce “pallet gaps” (too much spacing between deckboards). The “pallet loading problem,”—or the question of how to fit the most boxes onto a single pallet—is a common operations research thought exercise…
As USDA Forest Service researchers Gilbert P. Dempsey and David G. Martens noted in a conference paper, two factors led to the real rise of the pallet. The first was the 1937 invention of gas-powered forklift trucks, which “allowed goods to be moved, stacked, and stored with extraordinary speed and versatility.”
The second factor in the rise of the pallet was World War II. Logistics—the “Big ‘L’,” as one history puts it—is the secret story behind any successful military campaign, and pallets played a large role in the extraordinary supply efforts in the world’s first truly global war. As one historian, quoted by Rick Le Blanc in Pallet Enterprise, notes, “the use of the forklift trucks and pallets was the most significant and revolutionary storage development of the war.” Tens of millions of pallets were employed—particularly in the Pacific campaigns, with their elongated supply lines. Looking to improve turnaround times for materials handling, a Navy Supply Corps officer named Norman Cahners—who would go on to found the publishing giant of the same name—invented the “four-way pallet.” This relatively minor refinement, which featured notches cut in the side so that forklifts could pick up pallets from any direction, doubled material-handling productivity per man. If there’s a Silver Star for optimization, it belongs to Cahners.
I will attest to the importance of pallets from my two summers spent working in a book publisher’s warehouse. The second summer, much of my work day consisted of loading boxes onto pallets, driving the forklift with the pallet to an unloading area, and then unloading the boxes so that workers along the line could start the books moving down the line to what would become packed boxes. Without pallets, I have trouble imagining how so many boxes of books could have been moved.
This did raise some other questions for me:
1. How much money can be made manufacturing pallets? Clearly the world needs a lot of pallets…
2. How many pallets become unusable each year and what happens to these pallets?
3. Do people like products that are specifically designed for better packing on a pallet, like Costco’s rectangular milk containers?