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Marketplace with Kai Ryssdal

07:15 min | 1 year ago

"erlang or distribution center" Discussed on Marketplace with Kai Ryssdal

"You ever get that feeling where you know you've seen something before and then all of a sudden, you remember exactly where it was? Yeah, it happened to me the other day. Oh yeah, all right. This is like that scene in raiders of the lost dark. Yeah. Yeah. A long seemingly endless warehouse full of boxes and boxes and boxes. This is David erlang's warehouse. He's the president and CEO of erlang or distribution center. And he's got nearly 200,000 ft² of warehouse space out of here in riverside, California, and they're chockablock full of stuff from yes, the ports of Los Angeles and Long Beach. Tell me where we are. What am I looking at? Okay, you're looking at merchandise that's come in. A lot of it's going out where palliative and chippy. And a lot of it because of the problems at the harbor is staying. It's just staying here. Well, we got in containers in November for Halloween goods, wait, say that again. We got containers in November for Halloween goods. So it's going to end up staying here for a year. In case you were waiting for some Halloween decorations this year? Well, this is where they ended up, which is a convenient hook I must say for today's installment of our series temporarily unavailable. How stuff moves around the world or stay stuck in a warehouse for a year? Give me the logistics chain of events here. A container gets unloaded to the port. A grade company picks it up, right? We did that story. Takes it to the long haul ish trucking place, right? And then it winds up here somehow. And then the drayage company brings it here. Gotcha. Okay. Okay. And we unload it. And we have within a four day period to return it. You have four days to return. We have four days to empty it. And get it out of here. Now, I've got 14 containers here between here and the other warehouse that are empty. That we're waiting for pick up. Antonio and I talked about this last week at his drayage company back by the ports if you remember that. Everybody waiting to move containers. In the before times, they have an Earl anger had maybe two empty containers waiting for pick up. Instead of the 14 he's got today. So what does all this stuff we're looking at? You don't even know. You don't care. Coming in and going. It's coming in and going, do I care? Of course I care. They're my customers. They don't. But what's in it? Anything from dishes to luggage to. Umbrellas, stimulus wine glasses. Yep. This is all going to Dollar General. Home essentials and beyond. Can I just walk around here? By all means. All right, just watch the forklift. Is there a lot of stuff? Yeah, well, yet another story that's gonna get me killed. I gotta do something else. There's a lot of symbols wine glasses moving around in this economy. Oh, yeah. God. Monogram mugs. Twin XL comforter said, that's, you know, it's really funny. You get a good sense of the American economy coming to a place like this. Just the scale. And we're really small potatoes. No, really? When you think about it, we probably take in maybe 2000 containers a year. And there are 3000 of them on one ship. There are a lot of small companies in the giant global supply chain. David started working at the family business in 1984, bought it from his dad a decade ago. Now he's got anywhere from 40 to 60 employees. The number goes up around the holidays. They're unloading containers. Maybe stuff for Dollar General or box them up for Amazon. Your customers are your clients. First of all, who are they? Our customers are importers. Mainly those who do not have warehousing on the West Coast. Are they looking for warehousing elsewhere? Or are they just some may have warehouses on the east coast? We know some that have some in Texas and so I'm like, yeah. And what are you here from them? Are they complaining? Oh, yeah. The complaint everywhere. Well, listen, they want to make their numbers too. And they ordered goods a 120 days ago and it took 90 days to get going. And now they're sitting out in the harbor. In the meantime, they've paid for all those goods. And that's why my mom can't get her living room chairs. Lo these 6 months, right? I mean, that's actually a true story. I ordered some furniture in August and they're going to deliver in January. So yeah, we're all in that same boat. It's actually not a bad time to be in the warehousing business right now. Earlier is having a record year even tried to buy a third warehouse. He was so busy. We are going to do better. But it's also I mean, look how cramped we are. He's not kidding there, packed to the rafters, some isles of this warehouse have palettes full of stuff physically blocking them because there is just not enough room. And that's a challenge for you to be cramped because you just don't move. You know those little games where you have to move the numbers around. Yeah, that's what I feel like we do most of the time. So is it just time? I mean, look, you're kind of at the center of this, right? You're the you're the pivot point, right? Stuff comes in, stuff goes out. So you're kind of the pivot man. If you want to do the basketball now, right? So if you don't know what's going to get us through this, what hope do the rest of us have? Isn't it time? That's all at this point. You know, they say a lot of its COVID. So I just think time. But when it's all over, the prices will remain high. Talk to me about that for a little bit because I don't want to get into the whole transitory thing, right? We put that one to bed, but you don't think it's going to go away? Well, we used to pay which may not mean a lot. 5 bucks for a palette. Today we're paying between $12,000. So if it's 5 bucks for repelling it, you must have 10,000. Wait a second. What do you say? And it was 5. It's now 12 to 20 depending upon the palette. For these wooden palaces, all over the place. And everything ships, we ship out three to 5000 pallets a month. That's a heck of an increase. And of course, that gets passed on. So somebody's going to end up paying for it. And that, of course, is going to be the consumer. Exactly. Exactly. And then when things go back to normal, when do prices go down? When, indeed, I bet Jay Powell would like to know too. David Earl anger has been in the warehouse business. 40 years never seen anything like this, he says, just like everybody else, I've talked to you for this series as well. And just in case you are keeping track of how stuff moves around the world or doesn't, as of yesterday, noon LA time, there were 102 ships in line to unload at the ports of Los Angeles and Long Beach.