KANSAS CITY, Kansas – Just after 5:30 am on a chilly November morning, David Heide arrives at the shipping terminal on the industrial outskirts of Kansas City, wondering what new agony awaits this day.
His company, Jack Cooper Transport, supplies new vehicles to car dealerships in the United States. Some of them are transported by tractors, and even more are sent by rail.
Before the global supply chain plunged into chaos, the terminal operated at a steady and reliable pace. About once a minute, a new car left the nearby General Motors plant in Fairfax and landed in the terminal parking lot. Railroad cars brought a predictable influx of vehicles from other GM plants. Heide, Terminal Manager at Fairfax, was able to direct drivers and foremen with confidence.
No one uses words like predictable these days. Walking through the darkened courtyard, Mr. Heide has no idea how many train cars the understaffed railroad has sent or how many cars GM will pause. He doesn’t know if there is enough work for the team he called this week.
“It was crazy for a lot of terminals,” says Mr. Heide.
The wide rift in the supply chain has turned shipping terminals into volatile areas full of uncertainties and assumptions. Almost two years after the start of the pandemic, planning reliably at every stage of the supply chain is next to impossible. No one can fully control their own circumstances and cannot foresee the fate of their suppliers, distributors and customers. The result is a volatility feedback that discourages attempts to re-enable the economy after the virus is turned off.
The Fairfax terminal underscores a troubling reality in the global economy: so many unknowns are haunting the supply chain that any semblance of normality remains distant, even as some chaos subsides and shipping prices fall.
Between February and September, GM largely suspended operations at its Fairfax plant due to an acute shortage of computer chips, a key element in modern cars. The plant is working again, working in one shift instead of two or three previous ones.
However, like the rest of the trucking industry, the terminal is struggling to hire truck drivers in anticipation of a possible influx of new vehicles. For now, Mr. Heide is resisting pressure from GM to act faster.
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“They expect you can just flip a switch and 20 drivers will appear,” says 49-year-old Heide. “Then I’m stuck and will pay 20 people who have nothing to do.”
Not that GM is to blame. The automaker is grappling with its own logistical challenges.
“Our customers are not trying to be a pain in the ass,” says Sara Amiko, executive chairman of Jack Cooper Holdings Corporation, which owns and operates Fairfax, along with more than 30 other terminals in North America. “Their realities are also changing. The supply chain is updated in real time. “
Inside the terminal, next to the control room, half a dozen drivers sit at wooden picnic tables under fluorescent lights and arrange morning transfers. Using tablet computers, they browse through the available assignments, each with a corresponding fee, which depends on how many miles they need to travel from the terminal to their destination. They choose in order of seniority.
Dave Pinegar is already three hours on the road, arriving here from his home in Wichita, Kansas, nearly 200 miles southwest.
“The early bird gets sick with the worm,” he says.
He scrolls through the options. A trip to Broken Arrow, Oklahoma, will net him $ 452, while a longer trip to Malvern, Arkansas will net him $ 717. The longest route, the 641-mile trip to Batavia, Ohio, will cost him $ 929, but it will keep him from his wife and two daughters for at least one night.
He chooses a ride back to Wichita, which costs only $ 299. If there is no drama, he will be home by noon.
Mr. Pinegar’s cargo illustrates the complexity of the supply chain.
First, he will stop at the Emporia, Kansas Auto Show to deliver three Chevy Trailblazer SUVs built at the South Korea plant. He will then travel to Wichita with two Chevy Malibus from the Fairfax plant and a pair of Cadillacs – a CT5 sedan produced in Lansing, Michigan and an Escalade SUV produced near Fort Worth, Texas. Finally, there is the blue Chevy Silverado pickup, built in Mexico.
“Such a long journey,” says Mr Pinegar.
He sometimes runs into angry dealers, wondering how long it took for the cars to arrive. But in recent months, when a shortage of chips has turned cars into a precious commodity, he is often greeted with applause, and even people are filming him as he unloads.
“I feel like Santa Claus,” he says.
In the courtyard, just after six in the morning, when the first glimpses of light seep through the leaden sky, Mr. Pinegar begins to drive his cars along the ramp of his trailer, like in a circus stunt. He then enters the gate and disappears onto the interstate.
If something goes wrong, the margin of error will decrease.
Last week, one of Mr. Heide’s tractor trailers developed a leaky radiator and broke down outside Elkhart, Indiana, 582 miles from Kansas City.
The company towed the truck to a local repair shop. Ordinarily, the driver would wait there for the replacement of the radiator. But the store didn’t have a heatsink and we couldn’t guarantee how long it would take to get one.
Mr. Heide had a decision to make. He could leave his driver in Indiana, betting that the radiator would arrive by the end of the week. But he knew auto parts were getting stuck in shipping containers on cargo ships ejected from ports from Los Angeles to Savannah, Georgia. He had no idea if the repair shop had enough people to get the job done, or if the parts distributor had enough drivers to deliver the radiator quickly.
And he risked paying for several days of motel accommodation for his driver until the shipment was delivered.
So Mr. Heide told his driver to rent a car and go home. He instructed another driver, based at Jack Cooper’s terminal near St. Louis, to go and rescue the cargo and deliver it to its final destination in Ohio.
Mr. Heide was born and raised in downtown Kansas and played catcher on his college baseball team. He walks toward the terminal with the cheerful confidence of a man accustomed to giving directions while accepting ruthless, albeit good-natured, ridicule.
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But he cannot hide his frustration at the need to achieve results in a system dominated by factors beyond his control.
General Motors told him last week that it plans to build about 700 vehicles, expecting Mr. Heide to put 12 workers in the yard to load railroad cars.
Instead, Mr. Heide took a cautious approach, anticipating – and rightly so – that about a fifth of recently launched vehicles would be put on hold. He brought in only six yard workers. He intended not to incur the cost of idle hands.
The assistant terminal manager, Phil Rose, spends most of his day in a windowless office looking at a spreadsheet with detailed vehicle descriptions. This morning, the table shows 1,700 vehicles produced at the Fairfax GM plant are parked in the yard.
It looks for blocks of nine or ten cars heading to destinations along a single logical route. The more machines, the easier the exercise. But since the GM plant only had one shift, production was unstable. On some days, the terminal dispatches over 200 vehicles by truck; on other days only 60.
“This machine is designed for three shifts,” says Heide.
Mr. Heide suggests that there is a normal state ahead. He intends to ramp up supplies, even as supply uncertainties undermine his efforts. He expects five new trucks, but the same chip shortage that is plaguing the rest of the auto industry means he may have to wait at least six months.
On top of that, he and his colleagues are short of drivers and have to hire 15 more people, which seems useless.
“This is awful,” says Lindley Davis, head of human resources at the Atlanta-based company. “People want to be at home. They don’t want to drive a truck. “
Jack Cooper is one of only two unionized companies remaining in the automotive industry. It pays tuition wages up to $ 90,000 a year, plus pensions and medical benefits, all of which are covered by the company. The company gave away signing bonuses of $ 10,000.
However, there are not many people willing.
While talking to her recruiting team, Ms. Davis hears reports of job seekers “ghosting” – disappearing without contact with the outside world – or other suggestions. One driver who accepted a job offer turned down the job after his employer tripled his salary.
Mr. Heide is pondering two unpleasant options: he can lower his standards and agree that people who usually don’t discount will leave his yard with a load of $ 1 million cars. Or he could hold the line, but risk not having enough drivers as production rises.
He seeks to compromise, bringing in people with impeccable experience but with marks that could disqualify them, for example, too many different jobs in a few years.
Just before 3:00 pm, as the afternoon sun reflects off the windshields in the courtyard, Mr. Heide learns that only 127 cars have arrived by rail today and only 50 tomorrow.
“Nothing like that in terms of getting good margins to ramp up loads,” he says.
He sent five drivers across the Missouri River to another Jack Cooper terminal near the Ford plant to close the gap.
Mr. Heide sits down at his desk, flips through his email and prepares for what comes next.
