(This editorial appears in the October print edition of Trailer/Body Builders magazine.)
No one loves Christmas more than LJ (Mrs. KJ)—except for maybe our boys, who have long been the beneficiaries of her mania. Now that those boys are grown, I remind her annually that she doesn’t need to do the decorating, the gift wrapping, the baking, and the Sicilian “seven fishes” feast. (And, annually, my Christmas wish is to have an Italian mother in my next life.)
So imagine my concern when, just the other day, she suggested that maybe we should skip gifts this year and spend her scrupulously saved Christmas fund on something like a family get together at a beach house. Stunned, I couldn’t respond before she explained: “I’m just worried about the supply chain.”
My first thought: Hooray, I’m not the Grinch this year!
On second thought: Welcome to my world, dear. Or, rather, welcome to your world, trailer and truck equipment manufacturers, suppliers, dealers, and distributors. You’ve been managing around (and TBB has been writing about) labor and material shortages since the pandemic kicked in.
Of course, now that the supply chain suddenly has become a concern for Facebook-following American moms and well-coiffed TV network news anchors, somebody needs to do something—and soon: Black Friday is just around the corner!
As I’m writing this, I can’t change the channel or peruse my newsfeed without coming across “supply chain” headlines everywhere—so I wasn’t going to write this. Today’s celebrity cause is tomorrow’s fish wrap. The issues will remain, but hasty and wrong-headed opinions will pass.
So let the White House have a meeting and come up with a plan that Congress can bicker about but not act on (probably a preferable outcome).
The U.S. blames China and China blames the U.S. right back. Ocean shippers blame the ports, the ports blame the truckers. Trucking companies blame the drivers (or lack thereof) while drivers quit and blame the ports and warehouses where they waste hours waiting on loads (and also the government regulations that won’t let them make up for lost time).
Then the finger-pointing hit home, as domestic trailer manufacturers got sucked into the blame-game blackhole. The problem, according to some folks at the ports, is the lack of intermodal container chassis. And the reason there aren’t enough chassis is because U.S. builders successfully petitioned the U.S. International Trade Commission to do something about “unfairly” traded chassis coming from China.
The commission hearings were awkward to follow: The trailer manufacturers insisted that customers abandoned them because subsidized container chassis flooded the market, as a result they were both less expensive and more readily available than any domestic chassis could possibly be. Then those once-and-future customers—large intermodal trucking fleets, leasing companies, and intermodal equipment providers—all testified that the U.S. manufacturers simply could not compete on the basis of chassis quality and production quantity, and chassis tariffs would mean soaring costs and a lag in equipment replacement during a surge in shipping. Chicken, meet the egg.
(The awkward part: being in a legal proceeding on the opposite side of people you want to sell thousands of trailers to.)
But ITC and the Dept. of Commerce found the U.S. manufacturers' case to be sound, and imposed steep antidumping and countervailing duty tariffs—nearly tripling the price of a chassis from China. Now that the supply chain is in the news, chassis buyers are angling to get those tariffs removed.
So the coalition on Oct. 13 sent a letter to President Biden to explain the situation. The point being: Any suggestion that the China chassis tariffs should be removed is “misguided, wrong, and should be rejected” since there isn’t actually a chassis shortage.
“We cannot let America’s chassis manufacturing be the scapegoat for a host of other supply chain issues,” the letter concludes, noting the domestic chassis suppliers are already ramping up, creating jobs, and investing in equipment.
Likewise, on Oct. 18 the coalition filed comments on a DOT request for ideas to improve the supply chain. Look for coverage on the web and in next month’s magazine, but basically the filing explains that the supply chain is complicated and subject to manipulation by China. And there isn’t actually a chassis shortage.
Broadly, I’d argue the idea of a supply “chain” is the problem, as it leads to the notion that problems can be solved by identifying the weak links. Rather, freight moves on a supply “conveyor belt” and when the belt slows, it slows everywhere. The problem always seems to depend on your point of view.
So don't fret—freight always finds a way. Do note, however, that the Executive Order calling for supply chain solutions has a stated goal of coming up with a report “within one year”—so make sure those Christmas gift cards don’t expire anytime soon.
