The practicalities of dealing with supply issues

Ask your investment, budget, and other money related questions here
Post Reply
Dream of Freedom
Posts: 753
Joined: Wed Aug 29, 2012 5:58 pm
Location: Nebraska, US

The practicalities of dealing with supply issues

Post by Dream of Freedom »

With a record number of container ships sitting off the coast and our inability to offload them fast enough Christmas happens to be coming in a few months to add seasonal demand. People are flush with cash from stimulus checks and if they haven't spent them yet some will decide that Christmas is a good time to do so.

I already have food, personal hygiene items, first aid, and cleaning items stocked. I've also resolved to purchase my nephews' gifts early.

Do you think a supply disruption is coming too? What should one do? How can you profit from it? Should you warn friends and family?

Note: This is not an invitation to political debate.

JCD
Posts: 139
Joined: Sat Jul 20, 2019 9:12 am

Re: The practicalities of dealing with supply issues

Post by JCD »

I suspect supply chain disruptions will come and go for at least the next 6 months. One obvious form of profiting would be buying things like a PS5 and reselling it on ebay (US listed for 500, selling for ~800). Of course finding them is difficult, but if you have a list of things you know are worth reselling you might just look around if you happen to be in a store.

I'm not sure this is the sort of thing you're asking about though, rather your concern is for the "basics". In that regard, canning food and buying shelf stable foods for longer term supplies is not an unwise approach. If friends or family then do have food supply issues, you can give. If food supplies remain solid, you just have spare supplies for later. I would look for other "oversupply" situations where you can have a win-win-win scenario, regardless of outcome. Unless you personally know what supply chains are threatened, what deep warning can you give friends or family?

WFJ
Posts: 416
Joined: Sat Apr 24, 2021 11:32 am

Re: The practicalities of dealing with supply issues

Post by WFJ »

IMHO, this will be a regional phenomenon in the US. Those close to trucking routes and less densely populated will not experience much supply disruptions. Those is densely populated areas will experience much more issues with supply disruptions. It will also be sensitive to where the truckers live. if you were driving a rig and bidding on jobs, will you bid to deliver goods to your hometown or to some dense __________? A significant proportion of truckers are independent contractors and have some control on where/when they work.

Dream of Freedom
Posts: 753
Joined: Wed Aug 29, 2012 5:58 pm
Location: Nebraska, US

Re: The practicalities of dealing with supply issues

Post by Dream of Freedom »

@WFJ

Trucking will be interesting over the next few years. People are hesitant to get into the business with self-driving trucks in the pipeline. They can't replace the drivers yet, but there will likely be fewer of them.

chenda
Posts: 3289
Joined: Wed Jun 29, 2011 1:17 pm
Location: Nether Wallop

Re: The practicalities of dealing with supply issues

Post by chenda »

I think it's going to be wise to keep a perpetual surplus of household essentials and toiletries, perhaps 6 - 8 weeks worth, which can be achieved relatively easily with minimal extra storage space. It's usually just a case of always keeping a spare bottle. I've been doing this on-and-off for the last few years with brexit deadlines and covid. It helps to insure against short term disruption or if your favourite moisturiser runs out of stock.

Food is harder to achieve to do without sufficient space and using dried goods, although keeping a freezer full seems a good idea. Another option would be to consider using a meal-kit company like hello fresh, which I imagine have vast warehouses full of food and probably have very secure supply lines, so you are essentially outsourcing your storage. Not a cheap option though.

I'd focus on luxuries like coffee and alcohol which might be in short supply over Christmas and can be kept for a long time. Assuming you drink either.

Personally I don't think it's right to profit from supply shortage, at least not for essential goods. I'd just donate surplus stuff.

User avatar
Mister Imperceptible
Posts: 1669
Joined: Fri Nov 10, 2017 4:18 pm

Re: The practicalities of dealing with supply issues

Post by Mister Imperceptible »

I told my parents last January to buy toliet paper well in advance of any shortage (among other things). They scoffed. When they ran out of toilet paper in March, they said it was was because of people like me that there was a shortage. I told them that there are 2 kinds of people in the world: people who are smart, and people who run out of toilet paper. I gave them some of my surplus for free but to a stranger I would have charged an exorbitant price, and said “you’re welcome” for making a market.

jacob
Site Admin
Posts: 15907
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
Contact:

Re: The practicalities of dealing with supply issues

Post by jacob »

chenda wrote:
Tue Oct 05, 2021 6:31 am
Another option would be to consider using a meal-kit company like hello fresh, which I imagine have vast warehouses full of food and probably have very secure supply lines, so you are essentially outsourcing your storage. Not a cheap option though.
Be sure to sign up well in advance. These companies can't absorb a sudden increase of their customer base. They're only robust for existing customers.

slsdly
Posts: 380
Joined: Thu Mar 14, 2013 1:04 am

Re: The practicalities of dealing with supply issues

Post by slsdly »

The issue with the supply chain now is that even if the workers are found to man the docks, warehouses and trucks, there is a huge backlog we need to work through. My friends in the business tell me it will take years for them to fully recover. And as we all can guess, a lot can happen in a year to make matters worse (or possibly better ;)). Some businesses seem to be taking the approach of hunkering down and hoping it goes away, but from the sounds of it, others are just going to accept intermittent shortages / tell customers to deal with it. It doesn't sound like there is much appetite for "onshoring" work back to Canada at this point, except for very specific/valuable commodities.

As for strategies....

On the toilet paper front, I installed into a bidet on top of my toilet years ago. I keep a cloth near the toilet for drying. That $65 has been paying dividends every single day. I barely use any toilet paper, and have yet to work through what I bought 4 years ago. It is mostly for guests at this point.

On the food front, during the pandemic I bought a vacuum sealing unit and attachment to fit over mason jars. A perhaps more ERE solution would be to use a mechanical brake vacuum pump to perform the suction (I saw a neat video using one and the same attachments I bought). In any event, I buy as much as I can at wholesale. I pour it from the bags into mason jars, vacuum seal them, and store the jars in boxes (to protect against the light). That helps keep things fresher for longer and the bugs out. The 1L jars were expensive, but I have so many now, and I can only open what I need without exposing the rest.

I found a local business nearby me that deals with another local wholesaler. They seem to do a ~20% markup over the wholesale prices, but it doesn't require me to commit to any minimum volumes. I place a big order twice a year. I supplement it with some online ordering for more specialty items -- shipping is horrific, but once I go over like 40 kg, it starts to be feasible.

Obviously this isn't as good as the prepper route with oxygen absorbers and such, but basically, I'm finding I can store all my grains, legumes, seeds, dried fruit, spices and such without anything spoiling before I finish it and rotate in the next set. Eating mostly vegan, being willing to make everything from scratch (including pasta from flour I mill myself) and being willing to accept substitutes goes a long way.

I've also gotten into dehydrating vegetables. Mostly for camping to reduce weight/volume, but in a pinch, it could work as a way to store more vegetables without committing to more fridge/freezer space.

I also have a grow tent with an LED grow light. (Electricity is included in my rent and nobody has complained since I plugged it in a year ago.) I grow leafy greens in it. Had a stint with bell peppers (several harvests before the plant died). If the power/water goes out though, I'm screwed with everyone else :).

chenda
Posts: 3289
Joined: Wed Jun 29, 2011 1:17 pm
Location: Nether Wallop

Re: The practicalities of dealing with supply issues

Post by chenda »

Yes the other problem is that many container ships were prematurely sold for scrap during the pandemic, as they were costing the companies too much sitting idle incurring docking fees. Many of these ships had years of life left in them, and it will take a long time to build up fleets again.

Sourcing local farms which sell produce directly could also help supplement supplies. There's several smaller farms near me which sell meat, eggs, firewood, vegetables etc.

@jacob - That's a very good point.

WFJ
Posts: 416
Joined: Sat Apr 24, 2021 11:32 am

Re: The practicalities of dealing with supply issues

Post by WFJ »

The supply chain issues are complex, lumpy and will last a long time. One has to have perfect information, identify/understand the supply chain bottlenecks, provide a viable solution (good luck with all the unions and regulations in CA) and apply complex permutation calculations to provide an opinion of more than "it sucks". The supply chain systems works as millions of minor adjustments are made in real time by thousands of individuals, shocks are terrible in these kinds of systems.

I've experienced something I call "Waitflation", where the prices didn't increase but the time to deliver has increased 4x+. There are only a few things that can't be postponed (water, energy, food) but wonder if prices will go up or if wait times will just explode (which is not really captured in economic variables). There could be a "Hedonic adjustment" in the future where a product or service delivered today is worth more than something delivered 1, 10, 100 days in the future or some other measure to hide this from common consumption of government stats.

The most stark example of this was at a restaurant where I noticed a long line. I downloaded the app, order food and picked it up and started eating before half the line even reached the counter to order. I may have paid $1 more for the order but saved about 20 minutes and my time is worth more than $3/hour. Don't know if this is happening elsewhere, but my opinion in the "deflation vs. hyperinflation Bitcoin $1,000,000" debate. Both are wrong in the "Hyper Waitflation world" where people walk slowly from bread shops with wheelbarrows filled with cold wallets.

Post Reply