Sunday, May 3, 2020

Supply Chains: "The man feeding a remote Alaska town with a Costco card and a ship"

If you wait for someone to save you, it can be a frustrating or even deadly way to pass the time.

From The Hustle, May 3:

When Gustavus, Alaska, was cut off from its grocery supply chain, one resident decided to take matters into his own hands. 
On a Tuesday afternoon in late April, a small barge set off from Gustavus, Alaska, en route to the world’s most remote Costco warehouse.

The 96-foot ship hummed through the choppy waters of the Icy Strait, past vast expanses of wilderness, snow-capped peaks, and breaching whales. Seven hours later, when it reached Juneau, a few intrepid men loaded its deck with $20k worth of eggs, flour, meat, canned goods, and produce. 
It returned to Gustavus in the twilight haze, like a bird bearing provisions for its chicks.
Like many of America’s rural and remote towns, Gustavus has an arduous supply chain. Even in good times, getting groceries to an isolated enclave in Southeastern Alaska requires some serious logistical wrangling.

But when the town’s usual transport methods were disrupted, its 446 residents found themselves in the midst of a pandemic with diminished access to affordable food.
And one man — the town grocer — decided to take matters into his own hands.

Life at the edge of a glacier
Gustavus is remote in a way that only Alaskans can truly grasp.

Situated on a 38-square-mile plain along the Icy Strait, it is a place where moose outnumber people — where rugged seascapes meet towering glaciers, hemlock forests, and grassy knolls. It is home to 40 mammal species, 500 varieties of moss, flocks of kittiwakes, and a K-12 school with just 54 students.

The town had no electricity until 1985, and no phones until the mid-90s. To this day, no roads connect it to the outside world.
“You either gotta fly here or boat here,” says Calvin Casipit, the town’s volunteer mayor. “And everybody knows each other in 3 or 4 different ways.”

Its residents — a mélange of biologists, retirees, and innkeepers — live on streets named Glen’s Ditch Road and Weedle Fish Drive, and gather once a year for a 4th of July parade featuring slug races and a game called Chicken Poop Bingo.

As the gateway town to Glacier Bay National Park, Gustavus is highly dependent on the 3-month summer tourism season, when thousands of travelers book bed & breakfasts, fishing trips, and wildlife tours. But with the park closed until July 1 and much of the world still in lockdown, the local economy is in distress.

Kimber Owen, who runs the charter boat service Sea Wolf Adventures, has already suffered from $460k in cancellations. Around town, cooks, bear hunting guides, and park rangers sit dormant. Though certain businesses are now permitted to reopen in Alaska, many are choosing to stay closed.
“In our budgeting for the next year, we’re not counting on a whole lot of sales tax income,” says Casipit. “Nobody’s coming.”

But in dark times, one business has given the town a glimmer of hope.

The town grocer
On a side street on the Western edge of Gustavus, a neon “OPEN” sign shines brightly through the lodgepole pines.

This weathered wood building is something of a lifeline for the isolated community: Inside, local residents can find fresh produce, meats, canned goods, toilet paper, hardware, lumber, work clothes, pet food, and sporting goods. It’s as if a mini hybrid of Costco and Home Depot were supplanted in the middle of nowhere.

It’s called Ice Strait Wholesale, but locals have dubbed it Toshco — a combination of the owner’s name and the chain from which he sources most of his goods.
Toshua Parker, who opened the store 10 years ago, is something of a legend around town: His great-grandfather, Abraham Lincoln Parker, was the area’s first permanent homesteader back in 1917.
After losing his Arizona-based commercial real estate business in the wake of the Great Recession, Parker, then 30, returned to the town he grew up in.
At the time, the only way to get groceries was by private barge or plane. This made the local grocery store prohibitively expensive: A gallon of milk that sold for $5 in Juneau cost $12 by the time it arrived in Gustavus, largely due to the logistics of getting it there.
“There was just so much margin,” recalls Parker. “And I knew there had to be a way to do a better job.”

Parker did some work around town, scrounged together $3k, and began taking a state-subsidized ferry to Juneau, where he bought Costco inventory to resell in Gustavus at a small markup.

As the store grew, Parker and his father launched their own freight company, purchased the town’s gasoline station, and bought two of their own ships — a $300k “insurance policy” that gave Parker tighter control over the supply chain in case of an emergency.

During COVID-19, these preemptive moves have become crucially important....
....MUCH MORE