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Rounds of Winter Weather Causing Problems for Supply Chain and the Economy

Image via Flickr by MGSpiller

The Midwest and Northeast are used to rounds of winter weather, and normally have time to recover between storms. However, this year brought round after round of severe low temperatures, along with ice and snow, which make catching up the supply chain next to impossible. Delays are causing backups at important ports, delays of truck deliveries of raw materials and manufactured goods, stalling operations at many manufacturing facilities, and shortages in retail stores. Factory production plummeted in January, costing workers valuable hours and pay. A combination of unsafe driving conditions for workers to arrive and the inability for truckers to get the raw materials delivered caused the shutdowns. Some factories lost as much as a week of work. Many of the raw materials needed for production stalled at ports in New York and New Jersey, where snowfalls shut down operations and then delayed operations as workers cleared the terminals of mounds of snow to make room for the shipments.

Trucks backed up for a mile or more in ports such as Newark and Elizabeth, waiting for docks to be cleared and shipments to be made available for pickup. These truck delays meant pickups elsewhere waited for days, driving up the cost of shipments. Much of this cost the trucking companies will pass to consumers. Deliveries to factories and stores were delayed for seven to ten days in some cases.

Some of the hardest cities for truckers to get goods out were Atlanta, Chicago, and Dallas, where each storm brought delays of two to three days. Manufacturing in the South, Midwest, and Northeast were shut down, causing spotty merchandise shortages in stores around the country, according to Chad Moutay, the chief economist for the National Association of Manufacturers.

Evans Papantourous, owner of EP Transportation and Logistics company, said he has not seen anything like this in 30 years. As companies raise prices to recoup these loses and workers struggle with lower paychecks due to missing work, negative consequences are expected to the struggling economic recovery process.

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