Global supply chain disruptions felt across Midwest

Delays and higher shipping costs have impacted consumers coast-to-coast and underscore the need for new shipping alternatives - can the St. Louis region deliver?

Striking images of dozens of container ships berthed outside of already congested West Coast ports, plus photos and video showing a 1,300-foot-long container ship stuck in the Suez Canal, have landed supply chain industry news in the forefront for consumers in recent months.

While the visuals may be what has caught the attention of people who normally do not give much thought to the movement of freight, the ripple effect of these global incidents on the heels of supply chain disruption caused by the COVID-19 pandemic is being felt nationwide and in the St. Louis region. It also is reinforcing the importance of having a resilient supply chain and calling attention to the role the St. Louis region could play in providing options for shippers in this evolving environment.

Panos Kouvelis has looked extensively into this subject over the past year, interviewing multiple local and global companies with complex supply chains. He found resiliency in the supply chain comes down to two things.

“When we think about resilience, we say redundancy and flexibility. Those are the two things you've got to build,” said Kouvelis, director of the Boeing Center for Supply Chain Innovation (BCSCI) in the Olin Business School at Washington University in St. Louis, Mo.

Redundancy and flexibility might have helped avoid some of the early pain when the COVID-19 pandemic started and consumers grappled with shortages of toilet paper, sanitizer and paper towels; but those proved to be just a minor annoyance. The global supply chain disruptions experienced in recent weeks are having a much more significant impact.

Due to the shortage of semiconductor chips, General Motors announced in late March it was idling the General Motors Wentzville plant for two weeks, starting March 29. The move affected not just the more than 3,500 employees at the St. Charles County facility, but also the associated suppliers, not to mention the nearby restaurants for whom GM employees are core customers. Other consumers throughout the region are finding their orders for furniture, TVs, laptops and countless other household goods not only delayed, but ultimately costing more as higher shipping costs are getting passed along to end consumers.

As Kouvelis and his colleagues reviewed the pandemic year to see its impact on the manufactured durable goods global supply chains, they feared supply shocks and expected some temporary pandemic pain; but, surprisingly, it was strong consumer demand coming back that caused the most disruption. As summer came, and most Americans became adjusted to a life with limited or no access to dining services, sports venues and other entertainment, gyms and restricted air travel, they turned to projects for their houses, kitchens, cars, in-home entertainment devices, exercise equipment, power tools and boats.

“The demand for those products came back at a speed of recovery and level nobody expected,” Kouvelis said. “And the shortages were compounded by severe shortages of products such as semiconductors, the essentials of ocean and trucking transportation – shipping containers, and raw materials, such as aluminum, titanium and even stainless steel.”

Adding to the high demand were the delays due to continued congestion at the West Coast ports and the even more recent disruption caused by the blockage in the Suez Canal that backed up more than 400 other ships carrying millions of tons of cargo for days. Kouvelis said he expects the shortages will be longer lasting, resulting in consumers having to wait longer and pay higher prices to get their durable goods.

Such challenges actually bode well for the St. Louis region, where the strength of the existing freight infrastructure and innovative collaborations are providing even more reasons for shippers to consider routing freight through the bi-state area. In fact, it appears a hallmark of the St. Louis region’s freight network is its inherent flexibility and redundancy.

“You have so many assets. You have the network of the roads; you have the rail and then you have the Mississippi River. And then of course, the airports as well,” said Kouvelis. “But, again, I think the use of the intermodal and the heavier use of the river is the flexibility that you can offer that sometimes is not fully exploited.”

That is changing with the 2020 launch of Container-on-Barge (COB) services from America’s Central Port and  advancing plans to bring innovative Container-on-Vessel (COV) services to the St. Louis region and the Midwest. Kouvelis is enthusiastic about the proposed services, noting that, as a logistics person, everything is about the 20-foot containers and how you move them and how having them sitting around is a not a good thing.

“If we manage to basically use the transit capacity in a way that we get to free up, for longer trips, the intermodal and the river and the other assets that should be used instead of the truck, that will basically relieve bottlenecks at the ports and start moving things towards the middle of the country,” said Kouvelis. “And that's where we get a big, big advantage with this type of initiative.”

Through his research over the past year and ongoing relationships with global companies headquartered in or having a significant presence in the bi-state St. Louis region, Kouvelis also noted there are tremendous examples of supply chain resiliency among them.

He cited Emerson, which has headquarters in St. Louis and facilities in the bi-state area, and credited it as one of the most resilient companies in the region. He said one thing that has made Emerson more resilient over time is a change in their supply chain strategy. He said Emerson had been very heavy on sourcing from Asia but, over time, it developed a regionalized supply chain strategy. It strives to have a supply chain in North America for North America and in Asia for Asia and operate in Europe for Europe. These more regional supply chains have been an effort to bring things closer to the market. As a result, Emerson either has its own facilities or it has suppliers that are in the region to positively impact lead times.  Kouvelis believes this is good for the St. Louis region, as it might bring more manufacturing closer to the region, especially since it is an environment that will make investments in infrastructure.

Kouvelis called attention to Bunge, which has gradually increased its presence in the bi-state region to leverage its logistics advantages, especially the river. Its new headquarters is located in Chesterfield, Mo., a research and development center is located in St. Charles County, and its barge loading/grain facility is located in Fairmont City, Illinois, part of the Ag Coast of America.  He also cited AB-InBev, and how the pandemic reinforced that the beer business is a logistics business.

“From a logistics business perspective, they are really the best,” said Kouvelis. “They don't want to change St. Louis from being the logistics hub. They have moved marketing functions and finance functions to New York. But the logistics have stayed in St. Louis.”

He pointed to AB Mauri® North America, the yeast manufacturer based in St. Louis, which saw demand increase by an estimated 400% during the pandemic, and highlighted Bayer, Millipore Sigma and Belden, which all have a strong presence in the region and share the common thread of resiliency in their supply chains -- resiliency that has been years in the making. All of the companies Kouvelis has been engaging with have been willing to talk about their best practices for dealing with supply chain disruptions, sharing important knowledge for the benefit of all, without revealing private information.

Kouvelis believes other companies can learn from these corporations and he shared several key takeaways. Companies need some redundancy in their assets, either in facilities or in the inventories. They should consider a more diversified footprint, potentially having facilities in different areas as much as possible. He suggests supply networks also have to be very diversified, either at the global level or even within the different regions where a business operates. When something happens, companies should have the operational flexibility to switch assets or to find alternatives, which can require that businesses have a little buffer. 

“One part of that is distribution, so there are advantages in having multiple alternatives,” said Kouvelis. “I think that the transportation alternatives that the St. Louis Regional Freightway is creating are a major advantage for companies.”

Mary Lamie, vice president of Multi Modal Enterprises for Bi-State Development and head of its St. Louis Regional Freightway enterprise, is excited about the work that Kouvelis is doing with these organizations.

“Kouvelis’ supply chain resiliency collaboration with private industries prior to COVID-19 has demonstrated the value of knowledge sharing within a specific industry, the value of redundancy and flexibility, and a region’s ability to work together to leverage human capital and logistics assets,” said Lamie.

“The St. Louis region has a great positive business climate and thanks to forward thinking global and national corporations anchored in the St. Louis region, we’ll continue to lead the nation through the COVID-19 and future supply chain disruptions.” 

Brett Hull's sports restaurant skates into Wentzville

St. Louis Blues hockey legend Brett Hull has added his name to a new restaurant at The Junction of Wentzville, a 13,600 SF commercial development currently under construction in Wentzville, Mo.

Brett Hull’s Junction House, originally announced as Junction House in March, will be the centerpiece of the rapidly-growing development area and is slated to open in October 2020.

The multi-level eating and drinking establishment will occupy more than 9,400 SF including the main restaurant area, a large covered outdoor patio and a 1,500 SF open-air rooftop suitable for both public use and private events. All three areas of the restaurant will feature a full-service bar and seating for dining with special Brett Hull photos and memorabilia.

“We’ve been in talks with Brett Hull for about two years now and are absolutely thrilled to now have him come on board as a partner and add his name and the energy and excitement he brings to our already exciting venue,” said Keith Horneker, a local entrepreneur, restaurateur and Wentzville resident who developed the Junction House concept along with a group of five other St. Louisans with more than 20 years of combined experience in the local food and beverage industry.

“Having Brett involved has always been our long-term plan, and now we’ll also serve signature cocktails made with Brett’s very own Codigo brand; a super-premium tequila,” Horneker said.

“I’m excited to be part of such a great group and bring such a neat concept to the city of Wentzville,” said Brett Hull.

“As we bring our vision to life and share it with everyone in the community, I’m really happy I could help create jobs in these trying times. I can’t wait to relax out on the rooftop and enjoy some great food and many Codigo cocktails with the great people of Wentzville,” Hull said.

A new fitness gym called F45 Training Wentzville will occupy the remaining 3,000 SF of retail space in the new building and will be located adjacent to Brett Hull’s Junction House. It is also scheduled to open later in October 2020.

“Scoring the fourth most goals in NHL history, Brett is not only the best Blue we’ve ever had, but he’s one of the best to ever play in the NHL. Brett is a hero in our city and we want to prominently feature him throughout our establishment. Brett plans to be at the grand opening next month and plans to visit regularly with friends throughout the year. We’ll be announcing the grand opening date soon,” Horneker said.

Sullivan Bank is providing $4.3 million in construction financing for the project, which is being developed by LayneCo Construction Services. Patrick Wittenbrink of Carmody MacDonald P.C. is representing Horneker and his partners in the development.

Read MWM's previous article on The Junction development here: Restaurant and gym to anchor next phase of The Junction in Wentzville

Landco launches home office upgrade service

As months of pandemic work-from-home arrangements start to show the strain, St. Louis-area commercial contractor Landco Construction has a solution: REMOTivate yourself and your employees with home office makeovers.

Landco president Linda Bernhard said its new service can help companies lean into an uncertain situation with improvements that keep employees motivated and efficient.

“It could be a long time before we get back to normal. Everybody has people working from home - sitting at their dining room table or down in the basement surrounded by 2x4 studs and raw insulation. A proper home office can make them more productive,” Bernhard said.

Landco specializes in constructing contemporary, effective and environmentally aware workspaces for many St. Louis companies and campuses, including several Fortune 200 organizations.

Bernhard says that when the coronavirus struck earlier this year, it quickly became clear that the shelter-in-place orders were putting many clients’ construction plans on indefinite hold.

“They didn’t know how long they’d be keeping employees working remotely,” Bernhard said.

So, her team came up with REMOTivate, a service it could offer to both employers and employees to improve the work environment for the remote workforce.

Landco’s bundled offerings bring home office functionality to work-from-home locales. They range from the very simple -- a desk and chair -- to more premium packages that could include a sit/stand desk, executive chair, acoustical panels, even light construction such as installing a privacy door.

“We can make this package work for everybody. Employers can offer it as a perk to their workers, maybe to help transition them to permanent remote work. “They may be looking at downsizing their campus, giving up some rental space to save on their rent,” Bernhard said

Employees may treat themselves in order to be more efficient and comfortable in their home offices -- or may upgrade an employer’s offered renovation with extras of their own.

Landco is working with its partners, CI Select, Golterman & Sabo (G&S Architectural Products), Request Electric Inc. and Automated Data Systems, to put together a menu of standardized offerings that can be ordered easily and delivered quickly.

“We need products that are turnkey -- that we can turn around in three to five days,” Bernhard said.

Landco employees will observe stringent safety protocols, maintaining social distancing when they deliver and assemble the REMOTivate orders.

And it’s a service she believes will continue to be attractive to some clients, even when the initial COVID-19 crisis abates.

“What we’ve been encountering over the past few months has opened everybody’s eyes to a new way of working. If employers can save rent, if employees can work from home, I do see a need (of) continuing for this," Bernhard said.

9-Mile food truck garden set to bloom July third

Missouri’s first food truck garden, 9 Mile Garden, is set to open on July 3, 2020 at 9375 Gravois Rd. in Affton, Mo.

Developed by Guerrilla Street Food co-founder Brian Hardesty and Seneca Commercial Real Estate, 9 Mile Garden brings a family-focused entertainment district to the St. Louis area; offering local foods and drinks alongside outdoor movies, live music and performances, community events and more.

Previously known as Chapman Ventures, the company redeveloped Affton Plaza and began working on ideas for phase two of the project — which turned into 9 Mile Garden.

The garden plans to host five trucks for lunch, seven trucks for dinner and nine trucks for special events, according to Hardesty. The garden is also equipped with its own bar, The Canteen, who plans to serve 40 taps of local craft beer, wine, small batch cocktails, cold brew coffee, kombucha and more—all on draft.

“It’s such a cool concept and will truly be great for the area.  BEX really overcame the inclement weather challenges of late winter and early spring to get this project completed on time. That meant capitalizing on the good days we had and working overtime and weekends (to deliver on schedule),” said Ethan Bruckerhoff, superintendent for BEX Construction Services, who was responsible for the GC on the structural components of the project.

The full list of participating food trucks includes Balkan Treat Box, FarmTruk, Seoul Taco, Guerrilla Street Food, Doggie Mac’s, Sugarfire 64, Essentially Fries, Wok and Roll, The Saucy Iguana, Ukraft, Truckeria del Valle, Burgers STL, Wayno’s, Blues Fired Pizza, Spud Shack, The Crooked Boot, Honest to Goodness, Sedara Sweets, Zia’s on the Hill, Super Smokers, CJ’s Deli, Tastebudz Express, Heavy Smoke BBQ, Fire & Ice Cream Truck, Truck Norris, Scoops & More, Poptimism, Graze, Smokey’s Q, and Twisted Tacos.

Live bands will play every Friday night and a jumbo outdoor movie screen will show movies every Saturday night during warm weather months. Family-friendly games, such as pickleball and air hockey, board games and theme nights will all be included. The garden grounds and The Canteen can also be rented for private events.

The grounds of the food truck garden will open for lunch on Friday, July 3rd, and continue operating for both lunch and dinner service through the weekend. The grand-opening week will feature several live musical performances and charitable events. The garden and its staff will follow health and safety guidelines set by the Center for Disease Control and Prevention and St. Louis County, officials said.

GARDEN HOURS

Lunch: Mon-Sat, 11am-2pm

Dinner: Tue-Sat, 5pm-9pm

Special events every Friday & Saturday night

CANTEEN HOURS

Mon-Thu, 11am-midnight

Fri-Sat, 11am-1am

Other partners on the project include KOLB Contracting and Coralic Architecture.