Safety Stock podcast starring Dan and Will

Off the rails again, how a pending strike could have an impact on your supply chain

Freight can’t seem to catch a break. From port congestion to lack of containers to trucking prices soaring, a strike is looming for rail workers. Delays have already been seen impacting livestock and high school sports, but what could this mean for your business? Find out, plus more on Safety Stock.

Dan:
Ladies and gentlemen, your favorite podcast is back I’m Will Davis. I’m here with Dan Magida. Dan, how was the US Open yesterday?

Will:
It was great. It was scorching hot.

Dan:
Did you get color?

Will:
So I went on Tuesday and I saw one of my favorite tennis players, Rchard Gasquet front row, best backhand. So, so beautiful. His back end saw a little bit of Venus on her far. Most likely her last match,

Dan:
Venus or

Will:
Serena? Yeah, I saw Venus. Okay. I saw string on the practice courts. Got it. Saw another of my favorite tennis players, Eliza Corne on the practice courts. And then she won Tuesday night over the defending champion, radical Kao. Who else? I saw Sam query some great five setters sinner. Great match on Louie. And then some other great matches. It was, it was great. Awesome atmosphere, love, love, view us open. Have you ever been well?

Dan:
I have not been and it’s sad because I obviously live so close for a long period of time where I should have gone. But you know, where I have been to

Will:
City Field next, next to

Dan:
I have been to City Field a bunch. I was gonna say, I’ve been to a bunch of football stadiums, Dan football’s back.

Will:
Whoop, do you do

Dan:
Wow. You know? Yeah. That’s not how the rest of America feels, but how we’re tying this to our supply chain is that there are some issues on the railroad and specifically some of these issues are leading to high school programs, not getting their football helmets, their jerseys. Yeah. And some of the other equipment that they need to go on and really high school football is about two weeks in already. College football kicks off in the most part Saturday. There was a couple

Will:
Of games unless you’re a Nebraska fan. It’s sorry,

Dan:
Unless you’re a Nebraska fan, your season’s over

Will:
Sorry to listeners in Nebraska.

Dan:
Yeah. It is what it is, but you know, their football’s been dead for a while. So I think Dan, the interesting thing is on the railroad side, is that what we are seeing now, we’ve always seen it over the past year with the pandemic is that containers are having a tough time getting from the center of the country back to ports and getting empties, going onto ships, going back to where they need to go. That’s that’s been the case for a while now. Additionally, we know that there have been congestion in Chicago, which is leading to delays of both trucks or trains getting loaded, staying on yards longer than they should have, and then ultimately being delayed. You know, it used to be where 85% of the, the trains were within 24 hours of their scheduled time of arriving. And now it’s dropped down to like 60, 65%, which is a pretty big drop when you think about it, you know, year over year, but there’s a possible strike that is going to take place. That could happen September 15th, if

Will:
Yeah.

Dan:
The two,

Will:
115,000 rail workers and their employers could be in this contract dispute.

Dan:
Dan that’s a lot.

Will:
I, yeah, I don’t know the size is that the that’s not the entire rail industry, is it, or is

Dan:
That my understanding that it’s mostly covering the big five, the big, the group of five, when you think of the big five railroad companies. And last time there was, you know, this big of an issue Congress had to step in, you know, the federal government had to step in in terms of like making sure a strike and you know, the system wasn’t purple. But the interesting thing is, is that railroad profits have increased to where I think they were at 40% and they are effectively operating on a leaner model where they try to do just in time scheduling for trains, as opposed to what you typically had specific to, you know, more frequent schedules of trains running. So

Will:
Yeah, there’s, there’s that whole debate, not only in trucks, but for, you know, those profit gains across a lot industries, especially on the COVID side, but the profit gains have been going on. I would say pre COVID though for a lot of the rail industry just

Dan:
Cause they 2018, when they started implementing this, you know, this leaner strategy model for how often they schedule trends.

Will:
So, so I guess they had a, almost two years before COVID kicked in. Right. so you got, I guess two years on the back side, two years on the front side of data there. But what’s interesting about those delays, what this could impact as well, is that, well, you mentioned it earlier, trucking rates would probably soar because another means to, to trans transport your goods, which we’ll get to in a second, another one ports will probably lead more log jam because there won’t be any scheduling across those rails. So as all those ports in the us have been making good progress in getting that well, time decrease that could increase just because of that log jam. And then the interesting thing that is right here is livestock could run out of feed too, because one of the biggest means for agriculture. And if you can’t feed the chickens and the cows, we’re going run out of food,

Dan:
Unless

Will:
We go to beyond you.

Dan:
That is true. And for in reading this one article and it’s odd wired, I, Dan, I think it’s pretty interesting that like chickens are pretty much needing to constantly eat. And if they don’t have food, they go pretty quickly to cannibalism. They will Peck each other to death.

Will:
Thankfully it’s a little different than how much humans operate.

Dan:
Yes, you’re correct. So from that perspective, we we’re really tied to the railroads, even though people don’t think about it. It’s such, when you think of intermodal transportation, a lot of times it makes the most sense to put the containers on a train and get it to the destination. And then from there you take the hour, hour and a half truck ride that you need to go from that central location. It’s also a lot greener, you know, when you think of carbon emissions, the amount of savings that you get using a train versus using a truck are astronomical. And then Dan, I think the other thing that people realize is for the most part, you know, trains are very safe, you know, in terms of the frequency of your cardio, getting to where it needs to go. And not that trucks are, you know, dangerous per se, but you see a lot more issues in terms of delays and sometimes accidents on the road versus you do on the rails.

Will:
Yeah. A hundred percent like, so your point on, on trucks, like, okay, weather is a huge factor in there as well. Just cuz you don’t wanna drive through a tornado in the central us or on top of that, you have, there’s a lot of regulations and restrictions as well on how long truck drivers can be on the road, which is, which is a good thing too. But accents are more likely to happen with drivers. And then there are with trucks cuz trucks it’s kind of, or sorry with rail because one of those things where you gotta set rail, you set it, not that you forget about it, but you just go and they go a lot faster than trucks are going as

Dan:
Well. Yeah. You know, three mile long trains can go up to 70 miles per hour. You know, trucks at that point in time, depending on they are, you know, they can be a lot slower, especially in the tri-state area and that New York city area, whenever you see like a 18 Wheeler, like going down, you know, like second or third and like in Midtown you’re like, I don’t envy.

Will:
I, yeah. I fear, I feel bad for all delivery trucks in New York city on a side tangent it’s brutal. I, and if they ever go through the tolls, oh brutal.

Dan:
That’s an expensive toll too with all their axles.

Will:
It’s like 20 bucks. I also, they can’t go through certain, certain bridges of tunnels. Don’t allow them either. No.

Dan:
Yeah, you have to, yeah. You can’t do the hauling or the Lincoln. You have to go to the G dub.

Will:
Yeah. And I don’t think you can go over that to the Brooklyn bridge as well in a like a U-Haul you can I’m but anyway, that’s a, that’s a top tangent.

Dan:
Yeah. No that’s okay. And I’m more of a, I’m more of a Hudson river guy as opposed to a east river guy. So

Will:
You there’s dolphins coming to the Hudson river

Dan:
Dolphins.

Will:
Did you, did you see that on the news a couple weeks ago?

Dan:
No

Will:
Dolphins.

Dan:
Oh, wow. Yeah. Well, I think, you know, when you’re thinking about it as a brand, you know, the one thing you want to take away here is that where you can get a lot of your information from is with your freight forwarders, with who you’re scheduling things. And so as they’re advising to you when your point of deliveries are going to be, it’s a good thing to inquire with them. You know, what model of transportation are you taking? You know, what rates are you being subjected to in terms of, you know, if you have quarterly buy-ins, is it ALA carte? Do they have something already scheduled and be curious with them as you’re taking a look and understanding what you’re doing in addition to that, what’s your insurance. It’s always important to know people forget about it until they have an issue and then they want to get into it. So Dan, there’s a lot of things that you can do as a brand, really just by asking the people, moving your goods and trying to understand what you’re subject to

Will:
A hundred percent. Yeah. We won’t get into much, but insurance is a huge thing for in transit, warehousing stores, everything get, get insurance to prevent accents from happening and then your trucks don’t flip over. Or if they do flip over the remedies, you have same with rail. Like if there’s a strike and you’re stuff stuck on there, you could, there could be an insurance claim that could be made possibly cuz of some like force, if there’s anything with strikes. So be, be aware of what’s happening there.

Dan:
That’s right. And you know, so I would say, and if any point in time you’re having any visibility issues give anvil a try. You can go to avil.com. That’s a Y l.com take a look. And it’s really helpful when it comes to your production management and giving you some of that in end to end supply chain visibility. If you have any questions for us, you can reach out to us at hello@anvyl.com. That’s A-N-V-Y-L.com and send us a message. Let us know if you’ve had any interesting happen to you in the logistics space recently, or who are you taking? Ohio state minus 17 and a half against Notre Dame. You wanna hear it? Talk to you soon.