It will take more people than are now available to set the global supply chain right, Jim Cramer heard on a recent episode of the Mad Money TV show.
Labor is the biggest challenge for the global supply chain, Hamid Moghadam, chairman and CEO of Prologis (PLD) - Get Prologis, Inc. Report, the logistics real estate company with shares up 45% over the past 12 months, told Cramer.
Moghadam detailed for Cramer just how the system became broken, but said it will simply take more people to put it back together. He said there are not enough workers to unload ships, not enough truck drivers to move containers to warehouses and not enough warehouse workers to get those goods on their way to stores and consumers.
Real Money's Bruce Kamich recently looked at the charts for Prologis. Recent stock moves "could be the start of a correction that traders should be prepared to purchase," he wrote
Moghadam said there are many smart people working very hard to solve the global supply chain issues, but it's going to take time for the system to reset itself. He said the surge in demand after vaccinations began, coupled with disruptions from the Delta variant, was something the system has never seen before and wasn't prepared for.
Modern supply chains have gotten very long thanks to globalization, Moghadam explained. An item for sale at the corner store can comprise thousands of individual components that are sourced from all over the globe. It's like turning on a hose in China, he said, it's going to take a long time for the water to finally reach you. And when it does, you're going to need a lot of it because you're going to be really thirsty.
In 1983, Moghadam co-founded the company's predecessor, AMB Property Corporation, and led it through its initial public offering in 1997, as well as its merger with Prologis in 2011. He has been a board member since the company’s inception and serves on the board’s executive committee.