Supply chain grunts for cars on display at a Kansas terminal


KANSAS CITY, Kansas – Just after 5:30 a.m. on a cold November morning, David Heide arrives at the shipping terminal on the industrial outskirts of Kansas City, wondering what new turmoil the day has in store for him.

His company, Jack Cooper Transport, delivers new cars to dealerships at auto factories in the United States. It carries some of them on semi-trailers and sends more by rail.

Before the global supply chain fell into chaos, the terminal was operating at a steady and reliable pace. About once a minute, a new car would roll out of the nearby General Motors Fairfax plant and land in the terminal parking lot. The rail cars brought a predictable influx of vehicles from other GM factories. Mr. Heide, the terminal manager at Fairfax, could deploy drivers and yard crews with confidence.

No one uses words as predictable these days. As Mr. Heide walks through the dark yard, he has no idea how many cars the understaffed railroad has sent, or how many vehicles GM will be putting on hold. He’s not sure if there will be enough work for the crew he called this week.

“It’s been really crazy for a lot of terminals,” Heide says.

The great disruption in the supply chain has turned marine terminals into volatile areas full of uncertainties and better assumptions. Almost two years after the start of the pandemic, reliable planning is still nearly impossible at every point in the supply chain. No one is totally in control of their own situation, nor can they guess the fortunes of their suppliers, distributors and customers. The result is a feedback loop of variability that hampers efforts to revive the economy after the virus closes.

The Fairfax terminal highlights a troubling reality of the global economy: so many unknowns hamper the supply chain that any semblance of normalcy remains far away, even as some of the chaos abates and shipping prices go down.

Between February and September, GM largely shut down operations at its Fairfax plant due to a severe shortage of computer chips – a key component of contemporary cars. The factory is producing again, with one shift instead of the previous two or three.

Yet like the rest of the trucking industry, the terminal is scrambling to recruit truck drivers in anticipation of a possible flood of new vehicles. For now, Mr. Heide is resisting pressure from GM to go faster.

“Their expectation is that you can just flip a switch and that there are 20 drivers,” says Heide, 49. “Then I have to pay 20 people who have nothing to do.”

Not that GM is the culprit. The automaker is grappling with its own logistical challenges.

“Our customers don’t try to piss off,” says Sarah Amico, executive president of Jack Cooper Holdings Corporation, which owns and operates the Fairfax terminal along with more than 30 others in North America. “Their realities are also changing. The supply chain is being rebuilt in real time.

Inside the terminal, next to the shipping office, half a dozen drivers sit at wooden picnic tables under fluorescent lights, planning their morning commutes. Using tablet computers, they scan the available assignments, each labeled with the applicable salary, which is based on the number of kilometers they have to travel from the terminal to the destination. They choose in order of seniority.

Dave Pinegar has already been on the road for three hours, having driven here from his home in Wichita, Kan., Nearly 200 miles to the southwest.

“The early bird catch the worm, man,” he said.

He scrolls through the options. A run to Broken Arrow, Oklahoma would net him $ 452, while a longer trip to Malvern, Ark., Would net him $ 717. The longer route – a 641-mile trip to Batavia, Ohio – would cost $ 929, but would take him away from his wife and two daughters for at least a night.

He chooses a return trip to Wichita, which pays only $ 299. In the absence of drama, he will be back at noon.

Mr. Pinegar’s shipment illustrates the complexity of the supply chain.

First, it will stop at a dealership in Emporia, Kan., Dropping off three Chevy Trailblazer SUVs built at a factory in South Korea. Then it will continue to Wichita with two Chevy Malibuses from the Fairfax plant and a pair of Cadillacs – a CT5 sedan made in Lansing, Michigan, and an Escalade SUV produced near Fort Worth, Texas. Finally, there is a blue Chevy Silverado pickup truck built in Mexico.

“Such a long trip,” says Mr. Pinegar.

Sometimes he confronts angry dealers, talking about how long it took for the cars to arrive. But in recent months, as chip shortages have turned cars into precious commodities, he’s been frequently greeted with applause, and people even film him as he unloads.

“I feel like I’m Santa Claus,” he says.

Outside in the yard just after 6 a.m., as the first flickers of light creep into a leaden sky, Mr. Pinegar begins to drive his assigned vehicles up the ramp of his trailer like a circus ride. Then he goes through the doors and disappears onto the highway.

If something goes wrong there, the margin for error has diminished.

The previous week, one of Mr. Heide’s semi-trailers developed a leaking radiator and broke outside of Elkhart, Indiana, 582 miles from Kansas City.

The company had the truck towed to a local repair shop. Normally, the driver would have waited there for the radiator to be replaced. But the store didn’t have a heater and couldn’t guarantee how long it would take to get one.

Mr. Heide had a decision to make. He could have left his driver in Indiana, betting the radiator would arrive by the end of the week. But he knew car parts were stuck in shipping containers on cargo ships beached off Los Angeles ports in Savannah, Georgia. He had no idea if the repair shop had enough people to handle the job, or if the parts distributor had enough drivers to deliver the radiator quickly.

And he risked paying for several days of lodging in a motel for his driver while the load was not delivered.

So Mr. Heide told his driver to hire a car and come home. He arranged for another driver based at a Jack Cooper terminal near St. Louis to save the load and deliver it to its final destination in Ohio.

Born and raised in mid-Kansas, Mr. Heide played catcher on his varsity baseball team. He walks through the terminal with the jovial confidence of someone accustomed to giving instructions, while accepting relentless but good-humored ribs.

But he cannot hide his frustration at having to produce results in a system dominated by factors beyond his control.

The week before, General Motors had told him that it planned to release nearly 700 vehicles, in hopes that Mr. Heide would deploy 12 workers to the yard to load the cars.

Instead, Heide took a cautious approach, anticipating – and rightly so – that around a fifth of newly released cars would be put on hold. He only brought in six construction workers. He intended not to absorb the costs of idle hands.

Deputy Terminal Manager Phil Rose spends much of his day in a windowless office looking at a spreadsheet detailing vehicle inventory. This morning, the spreadsheet shows that 1,700 cars produced inside the Fairfax GM plant are parked in the yard.

It searches for blocks of nine or 10 cars going to destinations on a logical route. The more cars, the easier the exercise. But with the GM plant running just one shift, production has been choppy. Some days the terminal ships over 200 cars by truck; the other days only 60.

“This thing is built for three shifts, all out,” says Mr. Heide.

Mr. Heide assumes that normalcy is to come. He intends to ramp up, even as uncertainty over supply undermines his efforts. He’s expecting five new trucks, but the same chip shortage plaguing the rest of the auto industry means he’ll likely have to wait at least six months.

On top of all this, he and his colleagues are short of drivers and must recruit 15 more, an exercise that seems futile.

“It’s horrible,” says Lindley Davis, the company’s human resources manager in Atlanta. “People want to be at home. They don’t want to drive a truck.

Jack Cooper is one of only two union-represented companies in the car transportation industry. It pays training salaries of up to $ 90,000 per year, as well as pension and health benefits, all of which are paid by the company. The company distributed $ 10,000 in signing bonuses.

However, the takers are few.

During a call with her team of recruiters, Davis hears of “ghost” candidates – disappearing into secrecy – or accepting other offers. A driver who accepted a job offer withdrew after his employer tripled his salary.

Mr. Heide finds himself considering two unpleasant options: He could lower his standards and accept that people who wouldn’t normally make the cut will walk out of his yard with a load of million-dollar cars. Or he could hold the line but risk not having enough drivers when production increases.

It aims for a common ground, by bringing in people with irreproachable experience but flags that could have disqualified them, like too many different jobs in a few years.

Just before 3 p.m., as the afternoon sun shines on the courtyard windshields, Mr. Heide learns that only 127 vehicles have arrived by train today and only 50 tomorrow.

“It’s nothing to get a good inventory to build loads,” he says.

He sent five drivers across the Missouri River to another Jack Cooper terminal near a Ford plant to catch up.

Mr. Heide sits down at his desk, examines his emails, and prepares for everything to come.


Comments are closed.