Business & economy

The backup in global supply chain reaches to Malheur County

Mara Kirby Garcia, co-owner of Kinney Bros & Keele True Value Hardware in Ontario, said the global supply shortage has made some products hard to get. (The Enterprise/PAT CALDWELL)

VALE – For Malinda Castleberry, the first hint there was a major issue with the global supply chain arrived last spring.

The owner of Mal’s Diner in Vale, Castleberry’s usual routine to stock her diner was to order with a reasonable expectation the products would arrive on time.

Then things began to change.

First there was shortage of to-go boxes.

“We couldn’t get them anywhere. Then it was cups,” said Castleberry.

The shortages continued through the summer and then worsened to the point where Castleberry could not order restaurant staples like bacon and lettuce.

Then onion rings ran short. Everywhere.

Eventually, Castleberry – who utilized contacts within the supply system – said she was able to find a food vendor that offered bacon. That solved one problem but created another, she said.

“Now I am paying three times the normal cost of bacon,” said Castleberry.

Just across the street from Mal’s Diner, Malheur Drug co-owner Adam Tolman faced the same problem, but instead of a shortage of food items, he faced other product shortages.

In pre-pandemic days, Tolman encountered only short-term delays when he beefed up his inventory.

Yet for the past six months Tolman faced growing inventory shortages and expanding wait times for deliveries.

“I have orders in the system I placed over a year and a half ago,” said Tolman.

The inventory woes of Tolman and Castleberry are common across the county, nationwide and all over the globe as a once vaunted and dependable supply system appears to be on the verge of failure.

One of Tolman’s steady sales products were guns and ammo but he said both are in short supply.

“If you came in and wanted a 6.5 Creedmoor (rifle), which is a popular weapon and you wanted one from Browning (Arms Company) I might be able to get you one in six to eight months and I can’t guarantee I can get you ammo,” said Tolman.

Tolman said everything – from headphones, printer ink cartridges and toys to fishing gear – are in short supply.

He said Malheur Drug ordered a lot of its Christmas inventory in July but shortages linger. Once a product sells out, it’s gone and can’t be replaced because of the global shortage, said Tolman.

“It is not like I can order four more of the same thing,” said Tolman.

Tolman said he also typically only receives about half of an inventory order.

“There are lots and lots of inventory not available. We order every day and can’t get it,” said Tolman.

Global economy comes home to Main Street

The product shortages in hometown America are tied to a multitude of factors uniting at roughly the same time to create a perfect logistical storm.

The global supply chain is linear and one hiccup in a place like China can reverberate down the line and trigger a chokepoint that builds upon another chokepoint. 

The Covid pandemic created the first challenge. The pandemic initially forced factories in places like China and Vietnam to either cut production or close. They produced a range of goods shipped to and sold in the U.S.

In response, shipping companies sliced their schedules because of the projected drop in demand.

Americans, though, didn’t stop buying. In fact, through the pandemic, U.S. consumers went on a buying binge which quickly swamped the global logistics system.

Factories in the U.S. boosted production to meet the need but the key ingredients needed for materials sat overseas.

The finished products from China that did make it to the U.S. stalled at big ports because of a sudden shortage of shipping containers and trucks.

Ships then began to stack up at U.S. ports, crushing the available dock space, and ended up anchored offshore, waiting days to unload.

When the ships docked, the unloading template was impacted because many dock workers and truck drivers were sick or in quarantine because of Covid. A shortage of truckers translated into warehouses full of products with nowhere to go.

The situation was further complicated by natural disasters – such as hurricanes – that disrupted the supply system for weeks.

The final blow was an overall shortage of workers across the nation.

“What you are seeing is the supply chain is made of physical assets and human assets. There is a capacity limit to both,” said Tom Boyd, North America media relations manager for Maersk Line, the world’s largest container shipping company.

In September 2021, the value of U.S. imports from China increased to about $47.4 billion, according to the data firm Statista.

That means place like Vale are linked directly to the harbors and factories in China, where key products and natural resources are mined, manufactured and shipped.

For merchants, the little things add up

For more than six months Tamara Carrell, general manager at Romio’s Pizza & Pasta on South Oregon Street in Ontario, grappled with shortages.

Certain types of foods – such as chicken and steak skewers – were in short supply.

“To this day I can’t get Italian chicken I’ve got for years,” said Carrell.

Other items such as pizza boxes are also difficult to acquire.

“I still can’t get 15-inch pizza boxes so all of my pizza boxes are a variety of sizes,” said Carrell. “A lot of stuff we just can’t offer.”

The supply backlog also affected the type of flour Carrell could buy.   

Carrell said the number of customers she hosts is “about the same as before the pandemic,” but she was forced to cut her hours of operation because of a lack of staff.

“We don’t have enough cooks,” said Carrell.

Supply chain problems are a “daily battle” according to Angie Grove, co-owner of Mackey’s Public House in Ontario.

She said chicken wings are in short supply lately.

“Then it’s just random stuff. Sometimes its paper products. It is whatever is stuck on a ship or what factory is closed down because of Covid,” said Grove.

Grove said her Ontario restaurant was forced to raise prices on some meals to compensate for the inventory deficit.

“We’ve also absorbed some of it,” said Grove.

Grove said if she finds a needed product, the price is often “jacked up.”

Grove said many warehouses struggle to attract and keep workers.

“So, our truck is late because they can’t get loaded,” said Grove.

Cindy Lynch, co-owner of Brewsky’s Broiler in Ontario, faced the same problems as Castleberry.

“We are challenged each day getting our normal products or finding suitable replacements,” said Lynch.

Lynch said prices on products also continue to climb.

“It has become a full-time job trying to obtain our regular menu items,” said Lynch. “Believe it or not, getting beer is a problem as well. And if we need a new printer for our kitchen tickets, it could be at least six weeks.”

Natural disasters play a role

Paint is a big seller at Kinney Brothers & Keele True Value in Ontario but co-owner Mara Kirby Garcia said her store is one of the few across the region with an adequate supply.

“We have people calling from Boise because they can’t get paint,” said Kirby Garcia.

Garcia said the paint shortfall can be traced to a scarcity of resin, used as a binder in paint but is also used in items such as plastic straws. Resin is also a derivative of petroleum refining. A large percentage of the nation’s petroleum refining is in Texas and Louisiana, where an epic winter storm in February halted production.

Hurricane Ida, one of the most deadly and damaging Category 4 storms in U.S. history, also damaged petroleum production in Louisiana in September.

That shortage has also transformed into higher prices for a gallon of paint. She said a typical gallon in the past cost $39.99. Now that same gallon of paint costs between $47 and $65.

Other products are in short supply as well, said Kirby Garcia.

“Our fireplaces are out in the middle of the ocean,” said Kirby Garcia.

Kirby Garcia said the store also can’t get space heaters or propane or Kerosene heaters. Electrical boxes and stainless steel clamps are also in short supply, she said.

Kirby Garcia said the store is in many cases networking directly with manufacturers to obtain certain products.

Shortages ripple through product lines

Mike Dentinger of Dentinger’s Feed and Seed Hardware in Vale said product shortfalls have been a challenge since the Covid pandemic started.

“You can’t get this for a couple of weeks or months and it becomes available more and then something else gets short,” said Dentinger.

Dentinger said there have “been times when it looks like it is getting better and then we run into another hang up somewhere.”

“You try to adjust the way you order and the amount of inventory you carry. But it is difficult to anticipate everything,” he said.

Anything made overseas, he said, is a challenge.

“Long-handled tools, shovels, rakes and hoes are more complicated to get because of logistical issues,” he said.

Dentinger said one problem is the shift in production.

“Companies went away from stocking ingredients to make things and went to just-in-time manufacturing and all it takes is a small disruption,” he said.

Tolman said the wholesalers he conducts business with don’t have any answers regarding when, or if, the shortages will continue.

“They say they don’t know,” said Tolman.

The supply side of the U.S. economy will continue to struggle to keep pace with demand, possible impacting growth, according to report by the Oregon Office of Economic Analysis.

“In a supply-constrained economy, real economic growth is challenging,” said the report.

The global supply shortage probably isn’t going to be solved soon, said Boyd.

“Our company outlook is that the current market conditions will continue at least into the first quarter of 2022,” he said.

News tip? Contact reporter Pat Caldwell at [email protected] .

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