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Part Two: The Connectivity of the Supply Chain

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In our previous article, we covered how the global pandemic has affected manufacturers and shipping firms in Asia. Today, we’ll discuss the impact COVID-19 has had on the domestic supply chain.

Destination Frustration

Shipping problems are not unique to Asian markets. Here in the United States, the coronavirus has reduced the number of longshoremen, truck drivers, and rail workers. Between the shortage in American personnel and the volume of imports coming into Los Angeles and Long Beach, cargo ships often have to anchor for a week or more off the coast before they can come into either port and unload.

A lack of longshoremen at destination ports means vessels cannot be unloaded in a timely manner, and it’s forcing some operations to cancel voyages. In turn, this means empty cargo containers cannot be cycled back into the shipping chain, making the container shortage even worse.

Could shipping firms reroute their vessels to ports besides Los Angeles and Long Beach? Yes. However, dock workers are already overwhelmed in other ports and a change in destination would increase ocean transit delays.

Fewer Truckers

There are about 80,000 fewer truckers this year compared to 2020. While COVID-19 has been a contributing factor to the drop-off, many truckers are also leaving the workforce because the U.S. Department of Transportation set the maximum number of hours that truckers can work per week. Since drivers are usually paid by the mile, they cannot earn as much as before. Thus, they’ve either left for greener pastures or retired.

The trucker shortage, however, is likely to deepen. Almost 60% of all current drivers are 45 or older, and nearly a quarter of truckers are over 55. Prior to the coronavirus, there were 14 million job openings for drivers, but only 1.9 million hires were made in 2019. Since March 2020, there has been a 40% decrease in driver training because of smaller classes or commercial driver’s licensing schools have closed.

Fewer drivers means fewer goods moving overland to warehouses and store shelves. In other words, lead times stretch out longer and shortages continue.

Lean Weakness

Many Lean Six Sigma black belt types who mastered “just in time” supply chain management have seen their training and certifications upended by the coronavirus.

This is leading to a rethinking of lean inventory. For instance, manufacturers of computing equipment may keep a higher stock of chips in reserve. This change would build resiliency into their organizations and lessen the effects of a future shortage. Companies would spend more on inventory, but then again, lean supply works only if manufactured products and their components are readily available. 

Strengthening the Chain

Cable Plus has taken steps to improve our supply chain and shipping services. While there will continue to be disruptions to the overall supply chain for some time, we want to assure you that Cable Plus will continue to provide you with the right solutions at the right price — right away.

Part One: The Connectivity of the Supply Chain

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The global pandemic has affected nearly every aspect of daily lives, from how we interact with others on a personal basis to how we conduct commerce.

Cable Plus has faced the same challenges as other businesses in that the coronavirus has interrupted our supply chain from time to time. While we continue to go above and beyond to help you get the solutions you need to connect your networks, we thought discussing how the world is linked together via supply chains will provide a better perspective on today’s shipping and inventory challenges.

Production Problems

For decades, American businesses have off-shored production for cost-savings. And the nations that we’ve outsourced to have themselves sent production to southeast Asian factories, where various parts and components can be made for less.

That’s just good business sense, right? Well, it was before the pandemic, and it might be once again when COVID-19 is in our rear-view mirror. But for now, factories and exporters in Indonesia and Vietnam are struggling to contain the delta variant and manage production slowdowns, which both have an adverse impact on the supply chain.

There has also been a pair of factory fires in Japan that directly impacts the connected world. One factory makes advanced sensing devices and the other manufactures fiberglass used in circuit boards. The result is shortages, which aren’t just for toilet paper anymore.

For instance, consider semiconductor chips. With lead times about a year out, the high demand for chips could see shortages last well into 2023 and beyond. This affects the production of computing and networking devices, vehicles, smart home devices, gaming consoles, and many other goods.

Companies have always focused on having greater access to supplies — and at lower costs — over their direct competitors. Now, companies across multiple industries are in an overheated competition for the same supplies, such as chips.

Shipping Difficulties

Production slowdowns caused by COVID-19 and resultant shortages don’t exist in a vacuum. They also affect shipping, which is where the supply chain experiences all kinds of disruptions.

To begin, China recently shut down the ports of Shenzhen and Ningbo due to virus outbreaks. China is
so determined to stamp out the virus that Ningbo, the world’s third-busiest container port, was closed for two weeks — after only one dockworker tested positive.

Next, ocean cargo prices have increased by a factor of six, with the median cost of shipping a 40-foot container from Shanghai to Los Angeles skyrocketing from $1300 in February 2020 to nearly $7800 in August 2021. There are also bidding wars to secure space on cargo ships. With shipping prices rising, some exporters have decided to cancel shipments altogether.

What caused the spike in shipping prices? A shortage of another kind. There just aren’t enough shipping containers to go around for lucrative North American and European routes.

Currently, there is a glut of empty containers sitting in South American and African ports and rail yards. But they’re not being picked up because COVID-19 has caused labor shortages across all industries, with shipping being no exception.

A shortage of containers in Asia, North America, and Europe further delays companies from getting their goods on board a vessel. In addition, cargo ships are leaving port much later than normal and losing their docking slots at destination ports.

Will shipping firms pick up empty containers from these less profitable destinations when the world bounces back from the pandemic? Stay tuned!

Data Center Disruptions — Turbulence Followed by Boom

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The pandemic has expanded our use of many technologies. Web meetings, video calls, collaboration tools, streaming, online shopping, and many others have kept us safe and productive. What followed was an enormous demand for Internet Service Providers and data centers that support streaming services, cloud computing, content delivery, and video conferencing.  

While these demands drove urgent projects to increase capacity, private cloud and enterprise-related projects faced new headwinds. Many IT departments shifted to essential services, postponing system migrations, upgrades, and new deployments. The impact on the data center contractor depended on what their clients’ data centers supported.

We still see the impacts of this disruption, but what is becoming clear is that the service demands created by the pandemic will become long term. There are also new drivers for that demand to increase. Businesses will restart projects. They cannot be delayed indefinitely. Ultimately, the data center market will be driven to new highs.

The future of the data center remains bright. As businesses accept the long-term implications of the pandemic and sustainability of at-home workers is proven, investments that support this way of life will occur.

Drivers Accelerating Data Center Demand

Entertainment — A winter of limited entertainment options will drive content and gaming consumption. Families putting off a 4K investment, streaming service, or a new gaming system will be driven to do something to shake off the pending gloom of a pandemic winter. The latest home entertainment includes more 4K options and gaming subscriptions. This trend is accelerating with the PS5 Plus Collection, Nintendo Switch Store, and Xbox Game Pass.

5G — Apple is releasing its first 5G devices. In larger markets, faster consumption at the edge will drive greater demand at the core. Furthermore, we are relying on smartphones more while working remotely, and using them for backup connectivity during home network outages.

Social — Video chats, Zoom meetings, and sharing videos with family members is replacing family gatherings. Sadly enough, these services may even replace holiday visits for many Americans this year. While virtual gatherings are a poor substitute, post-pandemic, society will have grown comfortable with meeting family and friends this way, familiar with the technology, and ultimately more likely to use it long term.

Wi-Fi 6 — Lower latency and higher speeds will drive more consumption at the edge, increasing UHD viewing, and supporting more connected devices in businesses and homes.

Work from Home — Commercial buildings may be putting less strain on Internet Service Providers, but residential demand is up. We are working from home, learning at home, and streaming entertainment content all day long. You may not have been allowed to stream podcasts, music, or even your binge program at the office, but you are at home.

Enterprise Demand — Many workers have been sent home to work remotely. Some have chosen to do so forever. The pandemic has thrown the work-from-home trend into high gear and may become the future norm. While some technologies are hard to imagine today, VR collaboration solutions, dedicated HD conference systems, and virtual town hall meetings could be central components of tomorrow’s productivity improvements.

Building Automation — Remote monitoring and management has increased as a driver for building automation solutions. Reducing on-site facility staff is possible when building systems can be viewed and adjusted from home.

Smart Homes — We are receiving more at-home deliveries for our households and businesses. The value of those deliveries is increasing along with the demand to keep those deliveries safe. Remote entry systems such as MyQ, Amazon Key, and the related cameras are adding to home networks. Those systems also lead to more integrations with Google Nest, Alexa, Ring, and other home automation solutions for lighting, HVAC, and security.

It’s becoming clear that the pandemic has accelerated demand for many technologies. These technologies are likely to remain in higher demand post-pandemic. Once met by a return of full business operation, the data center’s consumer and enterprise sides will result in a boom in demand. The pandemic has disrupted data center business, but in many ways has created longer-term demand for growth.

Wi-Fi 6 (802.11ax) is Here. Are You Ready?

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Wi-Fi 6 (802.11ax) is now available in enterprise-class, wireless access points and supported by some of the latest laptops and mobile devices. This new standard has several exciting benefits and is easy to adopt.

Benefits:

While any environment, whether home or office, will have improved performance with Wi-Fi 6, high-density environments with lots of users, devices and IoT will benefit the most.

  • Capacity: Notable performance improvements in dense environments like schools and offices. You can expect reduced latency and speeds of up to 4x compared to Wi-Fi 5 in dense environments. Single users will see around a 40% improvement in speed.
  • IoT: Ideal for large-scale IoT environments; low latency, Targeted Wake Time, and coverage in the 2.4 GHz band
  • Battery Life: Targeted Wake Time can reduce battery consumption for connected devices and IoT by as much as two thirds
  • Performance: Great for applications that demand performance like voice, gaming, and UHD streaming
  • Future: FCC approves 6 GHz band in April 2020. Wi-Fi 6E will bring speeds closer to the theoretical max of 9.6 GB/s. Devices will need 6GHz chipset to support that band.

Preparing for Wi-Fi 6 and Wi-Fi 6E:

Wi-Fi 6 operates in the same 2.4 GHz and 5 GHz bands as its predecessor, Wi-Fi 5 (802.11ac). Support for these bands means your new Wi-Fi 6 access points can provide the same range and ability to penetrate building materials as your previous access points. There’s no need to change their location or add more access points for coverage. The only real concern is to make sure your cabling is ready to support Wi-Fi 6 capacity.

Most manufacturers recommend Category 6A cabling to support PoE and data rates up to 10BASE-T. Although the first wave of Wi-Fi 6 products will require 2.5 or 5BASE-T, which could be supported by Category 5e or Category 6, later versions are expected to go beyond that capacity.

If you’re looking to upgrade your company’s Wi-Fi, check with your integrator to make sure your existing cabling meets your requirements.

Bringing 5G to Your Business

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By all accounts, 5G is expected to be a major breakthrough in high-speed mobility. Providers are touting connection speeds 20 times faster than 4G and greatly reduced latency. At Cable Plus, we like to take a practical approach and consider how this will impact our customers who install and manage the local networks that support these technologies. Our focus is on your premise and how soon you can expect this demand.

Outdoors, accessing the 5G network is simple. The public gains access to the 5G network through small cell wireless transmitters. In urban settings, where 5G will be most prevalent, the small cells are installed on light poles, utility poles, buildings, and other structures. They are placed near the demand. However, the 5G signal does not penetrate building materials or cover large areas.

In fact, 5G operates in a high-frequency range that has poorer performance passing through building materials than its predecessors, and a range of only 1,000 feet. Range and penetration characteristics will require building owners, enterprises, manufacturers, shipping yards, and sporting venues to bring the small cell coverage into their property.

Distributed Antenna Systems (DAS) will not support this because 5G requires active components. If you have an existing 4G small cell solution, you would need to upgrade the active equipment to support 4G and 5G. You may also need to upgrade the cabling, with Category 6A to the antennas and fiber from the switch to the radio controller. In either case, there is a considerable investment and would require a meaningful use case and ROI to justify.

Like rollouts of in-building wireless solutions 10 years ago, large public venues will quickly adopt this technology to improve connectivity for thousands and even tens of thousands of guests. 5G was made to support breathtaking mobile experiences such as augmented visualizations at sporting events or theme parks. One difference, or X factor, between now and 10 years ago, is the proliferation of intelligent devices at the edge. IoT for transit systems, autonomous transportation, manufacturing, and building automation can benefit greatly from the millisecond latency of 5G. This speed will open up new use cases which may cause broader, early adoption in those markets. As for the enterprise market, expect to see 5G small cell in new construction and adoption into existing buildings further out.

Now Hiring Assistant Controller

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Cable Plus, a leading distributor of wire & cable products, based in Naperville, Illinois, is looking for an assistant controller to manage all aspects of trial balance and general ledger and financial reporting.

Responsibilities:

  • Handle Monthly General Ledger Closing and Financial Statement Preparation.
  • Reconcile All Balance Sheet Accounts Monthly.
  • Maintain Control Over All Financial Transactions. 
  • Monthly State Sales Tax Prep.
  • Assist With Preparations For Annual Third Party Review of Financials and State & Federal Tax Return Preparation.

If interested, please send your resume to jmarsden@cableplusinc.com.