Future Timeline

The global supply chain is slowing down at the very moment when Americans are demanding that it go into overdrive.

SACRAMENTO, Calif. (Courthouse News) — The flotilla of container ships loaded with toys and household goods destined as holiday gifts idling near Los Angeles remains the centerpiece of the country’s supply chain quagmire, but another cargo logjam is looming onshore hundreds of miles north.

While the ceaseless traffic jams at the ports of Los Angeles and Long Beach have produced containers of irresistible cable news content, the Port of Oakland is desperate for business. Ships that traditionally unloaded in Los Angeles and stopped in Oakland to reload with the Golden State’s legendary produce are suddenly beelining back to Asia empty.

The global shipping trade has figured out the pesky logjams are worth the spiking price of consumer goods, and as a result, California farmers are now paying the price.

“The Port of Oakland is standing empty,” says Assemblywoman Mia Bonta, whose district includes the port.

Containers full of California-grown products are piling up in places like Oakland and Stockton, forcing the state’s massive agricultural industry to fly supplies to South America and ship tree nuts via rail across the country to Maryland, in a frantic attempt to keep their European markets satiated.

(Vox) The supply chain comes for everyone, including Adele. Or maybe it’s Adele who’s coming for the supply chain — specifically, the vinyl supply chain.

The British songstress released her latest album, 30, on Friday to much global fanfare, and she’s expected to do major worldwide sales (at a moment when physical music sales are rare). There’s been speculation that Adele’s big splash may also have implications for the music business, and not necessarily all of them good. Sony Music reportedly ordered some 500,000 copies of vinyl records for the album’s release, potentially putting a squeeze on an already tight supply chain. With Adele pressing all those records, there has been speculation that she’s crowding out some space for others. At the very least, the issue is drawing some attention to a real crunch in the music industry.

“All of these bigger artists are selling more records on vinyl, and all of them together are clogging up the plants, whereas a few years ago, vinyl was probably second-tier for these artists or even third-tier,” said Mike Quinn, head of sales at ATO Records, an independent record label based in New York City. But he’s not worried too much. “We’ve not had any plant turn us down saying, ‘Oh, we have too many Adele records.’”

Vinyl has seen a renaissance over the past decade or so, with demand surging even more during the pandemic. According to the Recording Industry Association of America (RIAA), vinyl sales grew by 28.7 percent in value from 2019 to 2020 to $626 million. Last year also marked the first year vinyl exceeded CDs in total revenue since the 1980s. Manufacturers have struggled to keep up.

“Vinyl’s been surging, or resurging, from the dark ages since probably since 2007, 2008, it just did so under the radar,” said Brandon Seavers, cofounder and CEO of Memphis Records, a vinyl manufacturer. “The pandemic hit, and everything exploded.”

(Linked In) There are signs that global supply chain snarls are improving, yet the complicated web of producers and distributors predict things won't get back to normal until next year — as long as COVID-19 outbreaks subside, reports The Wall Street Journal. Experts point to reduced pandemic-related factory closures, fewer energy shortages and loosened port-capacity limits in Asia, coupled with falling ocean freight rates. They also say big U.S. retailers have already imported most of their holiday goods. Still, challenges such as labor shortages and port bottlenecks remain.

(Bloomberg) The supply-chain crunch appears to have already peaked in the U.S. When I first wrote this in mid-October, it felt like a bold assessment. Over the past two years, just about anything that could go wrong with global supply chains has gone wrong, from volatile swings in demand, a wave of extreme weather events and even a container ship getting stuck in the Suez Canal. But evidence keeps piling up to suggest that the U.S. is slowly but surely making progress in easing freight congestion and supply shortages.

Global average ocean freight rates for a 40-foot container have now declined for eight straight weeks, according to data released Thursday from maritime advisory and research firm Drewry. Spot pricing for the busy Shanghai-to-Los Angeles trade route has bounced around more but is still down about 19% from its September peak. Meanwhile, the number of containers lingering for longer than nine days at the Port of Los Angeles has dropped by about a third since the hub announced a plan in October to start fining ocean carriers for excessive dwell times, Executive Director Gene Seroka said this week. The threat alone seems to have driven meaningful improvement, so the ports of L.A. and Long Beach have delayed the penalties (which start at $100 a day and rise in $100 increments) until at least later this month. An influx of additional sweeper ships used to pick up empty containers is also helping to clear dock space for new cargo, while local officials have agreed to temporarily increase the number of containers that can be vertically stacked in nearby warehouses and container yards.

For all the doomsday warnings about the knock-on effects of the logjams on corporate earnings, companies generally seem to be managing fine — at least the large, public ones. Target Corp. this week reported $2 billion of additional inventory on its balance sheet at the end of the third quarter compared with a year earlier as it stockpiled goods to meet holiday demand. The retailer said it had secured enough truck and rail capacity to support expected shipments in the final months of the year.

The current wave of semiconductor and IC packaging shortages is expected to extend well into 2022, but there are also signs that supply may finally catch up with demand.

The same is true for manufacturing capacity, materials and equipment in both the semiconductor and packaging sectors. Nonetheless, after a period of shortages in all segments, the current school of thought is that chip supply may return to relative normalcy by mid-2022, despite some product shortages like automotive chips, which could persist throughout 2022. This depends on several economic factors, however, so all of this could change overnight.

It’s been a chaotic period in the semiconductor industry. In early 2020, the business looked bright, but the market dropped following the Covid-19 outbreak. Throughout 2020, countries implemented various measures to mitigate the outbreak, such as stay-at-home orders and business closures. Economic turmoil soon followed.

By mid-2020, the IC market bounced back, as the stay-at-home economy drove demand for computers, TVs, and other consumer electronics. Shortages for consumer chips and select IC packages surfaced. Then, in the first half of 2021, demand for cars, smartphones and other products spiked, causing chip shortages in those sectors. Today, many chip types are in tight supply with long lead times, while a few others are easier to find. It depends on the chip and vendor.

Yuli Ban wrote: ↑Tue Nov 23, 2021 3:50 am God, I hope so.

End In Sight For Chip Shortages?

The current wave of semiconductor and IC packaging shortages is expected to extend well into 2022, but there are also signs that supply may finally catch up with demand.

The same is true for manufacturing capacity, materials and equipment in both the semiconductor and packaging sectors. Nonetheless, after a period of shortages in all segments, the current school of thought is that chip supply may return to relative normalcy by mid-2022, despite some product shortages like automotive chips, which could persist throughout 2022. This depends on several economic factors, however, so all of this could change overnight.

It’s been a chaotic period in the semiconductor industry. In early 2020, the business looked bright, but the market dropped following the Covid-19 outbreak. Throughout 2020, countries implemented various measures to mitigate the outbreak, such as stay-at-home orders and business closures. Economic turmoil soon followed.

By mid-2020, the IC market bounced back, as the stay-at-home economy drove demand for computers, TVs, and other consumer electronics. Shortages for consumer chips and select IC packages surfaced. Then, in the first half of 2021, demand for cars, smartphones and other products spiked, causing chip shortages in those sectors. Today, many chip types are in tight supply with long lead times, while a few others are easier to find. It depends on the chip and vendor.

(The Verge) As millions of Americans rush to take advantage of Black Friday deals this weekend, the shopping spree will add to a pollution crisis unfolding at America’s ports. For months, broken supply chains have saddled port-side neighborhoods with more pollution than they normally endure. The holiday season will make things even worse.

The disaster is unfolding in spectacular fashion in Southern California, home to the busiest port complex in the western hemisphere (which includes the ports of Los Angeles and Long Beach). Here, cargo ships have piled up offshore as the pandemic wreaks havoc on global supply chains. The traffic jam extends to inland distribution hubs that attract trucks, trains, and planes shuttling goods from warehouses to consumers’ doorsteps.

THE DISASTER IS UNFOLDING IN SPECTACULAR FASHION IN SOUTHERN CALIFORNIA

That all has consequences for people’s health. “We need these things off these ships, I understand that,” says Afif El-Hasan, a pediatrician and national spokesperson for the American Lung Association. “But it’s going to hurt the people around the [areas] these goods come through.”
There are a lot of factors that wrecked global supply chains, but in short, there was a mismatch in supply and demand. The pandemic shuttered factories. Meanwhile, people started shopping more for home improvement projects and new hobbies they picked up during pandemic-induced lockdowns. In the US, the container ships ferrying those goods from Asia started piling up at ports. During the first three quarters of this year, the movement of containers in and out of the ports of Los Angeles and Long Beach was nearly 30 percent higher than during the same time period in 2019. By November, container ships were parking outside the Port of Los Angeles for an average of 17 days — more than twice as long as they were towards the start of the year. That has literally led to tons more air pollution in the region because the ships run their auxiliary engines while idling offshore.

By early fall, those problems were compounded by retailers’ rush to haul in goods for the holidays

(Vox) In the United States, it’s the gas and Thanksgiving dinner and holiday toys. In the United Kingdom, it’s the energy costs and snacks and Uber fares. In Brazil, it’s the cost of food. In Germany, it’s fuel, rent, and electronics.

Consumers around the world are seeing higher prices for goods and services, and though some reasons for this vary by country, inflation is turning into something of a worldwide phenomenon.

In the US, the Consumer Price Index (CPI), which tracks what consumers pay for goods and services, rose by 6.2 percent in October compared to a year ago, the fastest increase since 1990. But other parts of the world are also seeing bumps: The eurozone (all countries using the euro) saw its inflation at about 4.1 percent, the highest in 13 years.

Covid-19, which has wreaked havoc on global supply chains, gets a lot of the blame for this. “Underneath it all, the key theme is a Covid disruption,” said Gregory Daco, chief US economist at Oxford Economics. “That’s the key reason why we’re seeing inflationary pressures around the world.”

It turns out, the global economy can go a little haywire when a once-in-a-generation pandemic rolls around. The virus scrambled supply chains, squeezed off international travel, and shut down businesses and services. Now, even as the world is recovering from these shocks, Covid-19 is still surging and resurging, and combined with other disruptions — like climate-related events — supply chains are still trying to sort themselves out.

(The American Prospect) The bout of recent inflation has been mistakenly blamed by some economists on President Biden’s program of economic stimulus. The reality is that Americans need this economic recovery, and most of the price hikes are the consequence of bottlenecks in the global supply chain.

The supply crunch in turn reflects the interaction of just-in-time production and extreme offshoring with a privatized and deregulated logistics system. More on that in a moment.

Biden’s defenders have aptly pointed out that if we want to repair the supply chain mess and reshore American production, we need to maximize outlays on infrastructure and under Build Back Better. That’s surely true. But there is concern that these overdue investments will take years to bear fruit.

In the meantime, voters are blaming inflation on Biden, going into a crucial midterm election year. With congressional action on Biden’s key legislation, his overall approval rating has rebounded somewhat to 44 percent, but just 33 percent approve of his performance on inflation.

On this front, however, there is some good news. Even before we bring more of the supply chain home and rebuild the national logistics system as a kind of public utility, there is a lot the administration can do, and is doing.

(Axios) Despite bipartisan support in the Senate, a plea by the Commerce Secretary and growing desperation from industry officials, Congress still can't get a key bill that funds the U.S. chip business over the finish line.

Why it matters: With the global chip shortage continuing to crimp the economy, the semiconductor industry has ramped up pressure for funding of U.S.-based manufacturing facilities as one remedy.

• Intel and memory chip maker Micron have both said they will spend $150 billion in the next decade, but have pressed for government help to close the cost gap with some Asian markets.

The big picture: The U.S. share of global semiconductor manufacturing has dropped from 37% in 1990 to 12%. Executives from Intel and Micron told lawmakers it costs at least 30% more to manufacture chips in the U.S. than it does in many Asian countries for three main reasons:

• Labor costs more in the U.S. than in Asia both for operating fabrication facilities and for building them.

Executive Order 14057 --- Sec. 301 . Federal Supply Chain Sustainability. Federal supply chains should support a Government and economy that serves all Americans by creating and sustaining well-paying union jobs, protecting public health, advancing environmental justice, reducing greenhouse gas emissions, and building resilience to climate change. Consistent with applicable law, agencies shall pursue procurement strategies to reduce contractor emissions and embodied emissions in products acquired or used in Federal projects.

...
Sec. 511 . Coordination of Administration Priorities. The heads of agencies shall implement this order consistent with...Executive Order 14017 of February 24, 2021 (America's Supply Chains), which establishes the policy to strengthen the resilience of America's supply chains to fight climate change, create well-paying jobs, and secure our economic prosperity and national security.

(Investigate Midwest) Kate Huffman and her family considered planting corn on their newly purchased 183-acre farm this year, but they ultimately decided against it. The input costs, she said, would have been too high.

“We ended up going with soybeans because of what it would cost for anhydrous (ammonia),” a commonly used fertilizer, said Huffman, a sixth-generation farmer in Henry County, Illinois. “It was just too costly to make it worthwhile.”

Higher fertilizer prices are just one consequence of a slew of global supply chain breakdowns caused by the coronavirus pandemic, experts said. Despite an improving economy, bottlenecks at ports and labor shortages are expected to linger. It means farmers can expect to pay more for needed supplies, such as equipment and pesticides, University of Illinois researchers said.

The prices for fertilizers are at “record levels,” said U of I agricultural economist Gary Schnitkey. Prices for potash and diammonium phosphate — which are also fertilizers — have gone up, but “probably the most striking” is the increase for anhydrous ammonia, he said.

“Last month, anhydrous ammonia prices in Illinois were $1,343 (per ton),” Schnitkey said. “Last time we were close to this was back in September and October in 2008, and that was the financial crisis.”

Grocery stores are struggling with rising labour and product shortages that could threaten Canada’s food security, experts say.

Employee absenteeism due to workers calling in sick and COVID-19 protocols has hit about 30 per cent at some stores and is continuing to rise, Gary Sands, senior vice-president of public policy with the Canadian Federation of Independent Grocers, said Tuesday.

Without access to rapid testing in many provinces, he said workers are repeatedly forced to isolate for a week or more after an exposure to COVID-19.

If the situation worsens, some grocery stores won’t be able to stay open _ threatening food security in rural and remote areas that rely on a sole independent grocer, Sands said.

READ MORE: Truckers warn vaccine mandate at U.S. border could worsen supply chain issues

“If we have to keep sending people home, at a certain point stores are not going to be able to operate,” he said. “We’re very frustrated with the lack of rapid test kits for grocers.”

(Investigate Midwest) C&K Trucking, based just outside Chicago, has been "under extreme pressure" to hire and retain drivers since the COVID-19 pandemic started, said Mike Burton, president of C&K Holdings. The company hauls freight between ports, railroads and shippers across the country.
“Our turnover has been higher than we wanted. It was above 60% this last year,” he said, adding the company tries to maintain a turnover rate below that percentage each year.

The truck driver shortage is not new. The industry has been reporting a lack of availability of drivers for years. But the situation has exacerbated supply chain disruptions during the pandemic, resulting in congested ports and empty shelves at stores.

“The most immediate impact is that people are going to have to wait longer for products to get there, or they may not have the brand of product that they want, or they might or might not have that product at all,” said Matt Hart, executive director of the Illinois Trucking Association.

LOS ANGELES (Courthouse News) — The ports of Los Angeles and Long Beach, which last year became the focal point of the massive supply-chain meltdown that left store shelfs empty and cranked up inflation, have been making much progress in recent months addressing some of the most acute bottlenecks on the docks, but many underlying problems persist.

The backlog of containers with furniture, clothing, electronics and other imports that were piling up at the largest port complex outside Asia last summer and fall has been dwindling. The so-called dwell time a container sits around on average before it gets picked up has fallen by more than half from late October and there are no longer dozens of ships at anchor outside the ports waiting for weeks before they can berth and offload their cargo.

Those encouraging numbers are only part of the story, however, and no one at the ports is declaring victory yet or seeing an end to the supply-chain disruptions caused by the unprecedented volume of imports from Asia. The ships that were waiting outside the ports last year are now spread out across the Pacific Ocean, slow steaming or drifting to avoid a similar traffic jam like the one that put the ports in the national spotlight in the fall and more than doubling the time it takes to reach Southern California.

And although the stacks of containers with imported goods have been shrinking at the ports, the even larger stacks of empty containers that need to be sent back haven't budged much. The unyielding pile-up of more than 100,000 empty containers at the ports in turn creates a headache for truckers who need to offload their empty container before they can pick up a loaded one at the terminals.

"it's a very complex ballet that requires a careful choreography," said Matt Schrap, chief executive officer of the Harbor Trucking Association. "If I can't free up my chassis, I can't pull an import off the terminal."

(Bloomberg) Avocados will soon run out at smaller restaurants that don’t have the buying power of Chipotle Mexican Grill Inc.

For example, Salsarita’s Mexican-themed restaurants won’t be able to make any more guacamole in about a week — 10 days maybe if they can stretch it. The 75-unit chain isn’t optimistic about getting any more avocado supplies for awhile amid a suspension on imports from Mexico, which accounts for 80% of U.S. supply. So the inventory is what it is, according to Chief Executive Officer Phil Friedman.

“We’ll use what we have. I’m not going to look for any type of alternative, we’re just going to announce to our customers that guacamole is not available until further notice,” he said in an interview.

The avocado crunch is just the latest disruption in the food supply chain, which has been roiled by the pandemic with labor shortfalls, and shipping and logistics headaches. It’s part of what’s behind the fastest pace of inflation for consumers in four decades.

Small restaurants are bearing the brunt of the supply chain turmoil. Businesses like Salsarita’s can’t negotiate large-order discounts, and don’t always have the cash reserves to pay premiums when competition for a product heats up. Costs are “horrendous,” Friedman said, noting that in addition to avocados, cups are hard to get currently.