Why do international supply chains suddenly feel like a reboot of “It’s a Mad, Mad, Mad, Mad World” or a blood sport version of “The Amazing Race”?
For those who haven’t witnessed the former, it’s a 1963 gargoyle of a movie. I say “witnessed” because you don’t exactly “watch” “It’s a Mad, Mad, Mad, Mad World.” You may like it. You may hate it. But you can only stare agape as it passes by. The film starred everybody — and I mean everybody — from Spencer Tracy to Ethel Merman to Mickey Rooney, with The Three Stooges thrown in for no apparent reason.
The plot centers around a dozen characters chasing a buried fortune in California, and the slapstick hijinks that ensue. Scarcely any mode of transportation goes untapped, including a biplane, a fire truck and a banana peel.
Which brings us to the current supply chain madcappery. Scads of stakeholders are jockeying desperately for the cheapest path to get everything from MyPillow to My Little Pony to Mylanta to global ports of choice before anybody else.
Take Panama. (Please.) Mother-in-law Nature has given this Central American linchpin an indefinite timeout. The Little Isthmus That Couldn’t is in the midst of a drought even by dry season standards, so the number of ships that can take the shortcut via the Panama Canal from the Pacific Ocean to the Caribbean Sea and thence to the Gulf of Mexico or the Atlantic is way down. Instead, the luckless mariners get to watch whales or sea turtles or something on an extended excursion down the western coast of South America and around Tierra del Fuego before doing an about-face like an Arctic tern and chugging up to Nova Scotia, Florida and all points in between.
This continent-size diversion has ocean carriers lounging in Jacuzzis full of unexpected, rate-driven cash and everybody else crying, “Holy schnikes! How much are those Nikes?!” (For the record, Tierra del Fuego means “Land of Fire.” That’s a funny name for a place where penguins roam, if you ask me.)
Not to be outdone are the latest aggravations courtesy of the always aggravating Middle East. Seeing ships trek nervously from the Red Sea to the Mediterranean or vice versa via the Suez Canal while dodging missile-lobbing, drone-happy Houthis in Houthiville is no fun for the average shipper whose wares stand a fair chance of being pirated. So, they get the pleasure of watching helplessly as the ships route far south around Africa’s Cape of Good Night I Hope This Doesn’t Get Any More Expensive.
Purported solutions to this fine kettle of corn draw reactions ranging from a solid “Maybe” to “Let’s not and say we did.”
I’m personally unpersuaded that an interpretive rain dance will do much good in Panama, but I’ll keep an open mind if they set it to decent music and promise not to pull the monotonously competent Riverdance crew out of whatever Irish crypt they’re wintering in.
Also thinking outside the container box, Chinese shippers are trying to cut both the Suez and the Cape of Good Hope off at the pass by leaning on the China-Europe Railway Express. Marco Polo wasn’t available for comment, but this Beijing-to-Madrid odyssey is gaining traction, according to FreightWaves’ Michael Rudolph. More shippers are opting for the land route, where rates are at least competitive with what they pay for ocean transport on the spot market. Good on them if they can make it work.
Meanwhile, striking while the iron and the weather are hot, opportunists in Mexico hope to drum up support for a 188-mile rail link across the skinniest part of their fair land between the Pacific and the Gulf of Mexico to thoughtfully relieve the burden on the Panama Canal.
But as FreightWaves’ Noi Mahoney reports, there are skeptics. And if they’re right, the Isthmus of Tehuantepec project could devolve into a $2.8 billion boondoggle — much like those fancy pants Chinese ghost cities that were as popular with actual humans as rug burn. And that’s before the inevitable cost overruns if they ever do in fact build the necessary infrastructure.
A suggestion: Hold off on investing in this Big Idea until it starts raining again in Panama. Then see how warm and buzzy it is.
The Light Load is an occasional look at the world of transportation and logistics through the eyes of an industry greenhorn.
Related articles:
The Light Load: Supply chain gets personal — gravy shortage edition
The Light Load: Raven-on-drone violence nothing to crow about