One car a minute passed here, but now chaos reigns

Just after 5:30 am on a cold November morning, David Heide arrives at the cargo terminal on the industrial outskirts of Kansas City, Kansas, wondering what the new storm that day might be.
His company, Jack Cooper Transport, delivers new cars to factory dealerships across the United States. It transports some in semi-trailers and sends more by train.

Before the global supply chain fell into chaos, the terminal operated at a steady and reliable pace. Approximately every minute a new car left the nearby General Motors factory in Fairfax and pulled into the terminal parking lot. Train cars carried a predictable flow of vehicles from other GM plants. Heide, the terminal manager at Fairfax, could securely schedule drivers and yard crews.

These days, no one uses words like “predictable” anymore. As Heide crosses the yard in the dark, he has no idea how many cars the understaffed railroad has shipped or how many vehicles GM will put on hold. He doesn’t know if there will be enough work for the team he convened this week.

“It’s really crazy in a lot of terminals,” said Heide.

The major disruption in the supply chain has turned cargo terminals into volatile zones, full of uncertainties and doubtful hunches. With nearly two years into the pandemic, it’s still nearly impossible to plan reliably at every point in the supply chain. Nobody is in full control of circumstances, nor can they guess the situation of their suppliers, distributors and customers. The result is a cycle of variability that impedes efforts to reactivate the economy after the crashes caused by the virus.

The Fairfax terminal underscores a disturbing reality in the global economy: so many unknowns disturb the supply chain that any semblance of normalcy remains distant, even as chaos wanes in part and freight prices fall.

Between February and September, GM suspended much of its operations at the Fairfax plant due to a critical shortage of computer chips — a key element in contemporary cars. The factory is producing again, operating in one shift instead of the previous two or three.

Like the rest of the freight industry, however, the terminal is scrambling to recruit truck drivers, anticipating an eventual flood of new vehicles. For now, Heide is resisting GM’s pressure to work faster.

“Their expectations are that you push a button and there are 20 drivers,” said Heide, 49. “Then I get stuck paying 20 people who have nothing to do.”

Inside the terminal, beside the dispatch desk, half a dozen drivers are seated at picnic tables under fluorescent lights, organizing their morning deliveries. Using tablet computers, they check available tasks, each marked with the applicable payment, based on the number of miles they must drive from the terminal to their destination. They choose in order of arrival at work.

Dave Pinegar has already been on the road for three hours, coming to Kansas City from his home in Wichita, Kansas, nearly 200 miles southwest.

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

It cycles through the options. A trip to Broken Arrow, Oklahoma, would earn him US$452 (R$2,530), while a longer trip to Malvern, Arkansas, would pay US$717 (R$4,015). The longer, 1,025-kilometer drive to Batavia, Ohio, would give him $929 (BRL 5,202), but would keep him away from his wife and two daughters for at least one night.

He chooses a trip back to Wichita, which pays just $299 (R$1,674). If there’s no problem, he’ll be home by noon.

Pinegar’s cargo illustrates the complexities of the supply chain.

First, it will end up at a dealership in Emporia, Kansas, where it will unload three Chevy Trailblazer SUVs made at a factory in South Korea. Then it will continue to Wichita with two Chevy Malibuses from the Fairfax factory, 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 made in Mexico.

“It’s a long journey,” Pinegar said.

In the courtyard shortly after 6:00 am, when the first rays of light seep through the overcast sky, Pinegar begins to board his vehicles through the ramp of the stork, as in a circus act. Then he crosses the gates and disappears onto the interstate highway.

If something goes wrong, the margin for error shrinks.

The week before, one of Heide’s semi-trailers had leaked a radiator and stopped near Elkhart, Indiana — 600 miles from Kansas City.

The company had the truck towed to a local workshop. In normal times, the driver would have waited right there for the radiator to be changed. But the shop didn’t have a radiator and couldn’t guarantee how long it would take to get it.

Heide needed to make a decision. He could have left the driver in Indiana, betting the radiator made it by the weekend. But he knew that vehicle parts were sitting in containers on ships docked near ports, from Los Angeles to Savannah, Georgia. He had no idea if the shop would have enough staff to do the job, or if the parts distributor had drivers to deliver the radiator quickly.

And he ran the risk of paying the driver several days of motel accommodation while the cargo was waiting.

Then Heide told the driver to rent a car and go home. He arranged for another driver, based at a Jack Cooper terminal near St. Louis, to retrieve the cargo and deliver it to its Ohio destination.

Born and raised in central Kansas, Heide was a catcher on the varsity baseball team. He walks through the terminal with the jovial confidence of someone used to giving orders while accepting well-meaning jokes.

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

The week before, GM had told him it intended to release nearly 700 vehicles, expecting Heide to use 12 workers in the yard to load train cars.

But Heide took a cautious approach, predicting — correctly — that about a fifth of new cars would be left waiting. He brought just six workers into the yard, determined not to absorb the costs of idle hands.

Heide believes that normality is coming. He intends to boost productivity, although uncertainty about supply hampered his efforts. He expects five new trucks, but the same chip shortage that plagues the rest of the car industry means he will likely have to wait at least six months.

On top of all that, he and his colleagues are short of drivers and need to recruit 15 more, a task that seems impossible.

“It’s horrible,” said Lindley Davis, director of human resources at the Atlanta, Georgia-based company. “People want to stay home. They don’t want to drive a truck.”

Jack Cooper is one of only two unionized companies left in the car transport industry. It pays training salaries of up to $90,000 (BRL 504,000) a year, plus retirement and health benefits at full cost coverage. The company is handing out $10,000 hiring bonuses. And there are still few interested parties.

In a call to his team of recruiters, Davis hears reports of applicants disappearing without notice, or accepting other offers. A driver who took the job backed down after his old boss tripled his salary.

Heide finds himself contemplating two unwelcome options: He can lower his standards and take people he wouldn’t normally get out of his yard with $1 million charges. Or you can maintain the level but run the risk of not having enough drivers when production increases.

It aims for a compromise, bringing in people with good experience but details that could disqualify them, like too many jobs in a few years.

Just before 3 pm, as the afternoon sun shines on the windshields in the courtyard, Heide learns that only 127 vehicles arrived by train today and only 50 more will come tomorrow.

“This is nothing in terms of a good stock to build loads,” he says.

He sent five drivers across the Missouri River to another Jack Cooper terminal near a Ford factory to clear his backlog.

Heide sits at the table, checks his emails and prepares for what’s next.

Translated by Luiz Roberto M. Gonçalves