“Arrives after Christmas.” That’s the message popping up on some items from Amazon this holiday season as supply chain disruptions persist. As we’ve reported previously, the supply chain impact isn’t just to Christmas presents. It’s also affecting crucial ag inputs like fertilizer and herbicides.
We’ve heard about issues at the ports, but one transportation, logistics, and supply chain expert says a major issue, impacting herbicides especially, is packaging. Ken Eriksen, Senior Vice President, Head of Client Advisory & Development, Energy & Transportation, and Policy for IHS Markit, explains that plastic and resins are in short supply.
“You’re not able to get all that material to make those products. There are shortages, especially once you get to the United States, to be able to take the product and transform into a smaller container size, say 50-gallon, 10-gallon, whatever, 5-gallon jugs. You don’t have the plastic or the resins, and they’re so expensive now. Some of that is COVID, some of it was we had the winter storm that hit the Gulf Coast, Houston especially, and wiped out a number of the chemical operations for a prolonged period and they’re in constant catch up. Almost hyperventilating to get caught up on things and there’s just shortages across the system.”
How dire is the shortage? He says some convenience store clients of theirs are unable to get cups.
Back to issues at the ports, Eriksen explains that existing union labor rules are limiting some of the changes that could be made to improve the supply chain. Negotiations between the International Longshore Warehouse Union and the Pacific Maritime Association will have to happen soon.
“They’ve been under an extended contract already, and the management has asked to extend it again, and the union saying, ‘No. We’re done extending. Let’s get to work and negotiate a new contract.’ That could be another major pain point coming ahead of us here.”
Hear much more of my conversation with Eriksen in the full HAT interview below. Eriksen was a featured speaker at this year’s Indiana Ag Policy Forum presented by the Indiana Corn Growers Association and Indiana Soybean Alliance.