Western Railroad Discussion > Expect a "bullwhip" effect as warehouses refill

The Wall Street Journal has an article this morning about manufacturers in the US and elsewhere boosting output as factories ramp up output. The Covid-19 emptied out warehouses  of many products, like toilet paper, flour, laptop computers, industrial cleaners, etc. Now, output is rising, as manufacturers stuggle to fill these depleted storage spaces. That, in turn, requires rail and trucks to move move materials to factories, and then to warehouses. Spot shortages in logistics are already being reported.

The bullwhip or snap back happens as the makers move from low production to high production, to restore inventory levels. But the employment doesn't follow suit, manufacturers are not adding jobs if they can avoid it.They use overtime and temps.  Especially if they expect to reduce production to "normal" demand levels soon.  So, employment and production move into a trough, and roll up to an abnormal surge, then settle back to normal.

Chinese exports to the US are continuing to surge, hence the movement of empty chasis and containers to the West Coast of the US and Canada. And reports of delays on the dockside.

Paywall likely

https://www.wsj.com/articles/bullwhip-effect-could-boost-u-s-economy-11600858980?mod=hp_lista_pos5

You can often get around the paywall on sites such as the WSJ by entering the headline of the desired article directly into Google’s search engine.

How do you know what the headline is? Look at the link to the story.

In this case, entering “Bullwhip effect could boost u s economy” into Google took me to a link that showed me the entire story, with no paywall.

Your mileage may vary, but it’s a good tool to keep in mind.

Posted from iPhone

When it can cost a company $5,000+ per new hire (this figure applies to at least one large east coast company that I'm familiar with), it's not hard to figure out why some companies are more willing to just pay the overtime.

Yes, items are being restocked. However, there are still out of stock issues as well and it may be QUITE AWHILE before they return. There is one popular food company (as an example) that comes to mind.

Posted from Android

walstib Wrote:
-------------------------------------------------------
> You can often get around the paywall on sites such
> as the WSJ by entering the headline of the desired
> article directly into Google’s search engine.
>
> How do you know what the headline is? Look at the
> link to the story.
>
> In this case, entering “Bullwhip effect could
> boost u s economy” into Google took me to a link
> that showed me the entire story, with no paywall.
 thanks!!
> Your mileage may vary, but it’s a good tool to
> keep in mind.
>
> Posted from iPhone

ns1000 Wrote:
-------------------------------------------------------
> When it can cost a company $5,000+ per new hire
> (this figure applies to at least one large east
> coast company that I'm familiar with), it's not
> hard to figure out why some companies are more
> willing to just pay the overtime.
>
> Yes, items are being restocked. However, there are
> still out of stock issues as well and it may be
> QUITE AWHILE before they return. There is one
> popular food company (as an example) that comes to
> mind.
>
> Posted from Android

Most large companies these days if the added work is going to last less then a year they will gladly pay the overtime.
It's not the pay that's the issue, it's all of the benefits like workmans comp and health insurance and such that make companies think twice before hiring extra people these days.

That and "turnover" is more of a problem now...

Posted from Android



Edited 1 time(s). Last edit at 09/24/20 15:28 by ns1000.