So many articles are describing the deterioration in the supply chain. Lots of comments on twitter show pictures of grocery stores in the United States with a fraction of the stock you would normally see.
Government policies, such as forced lockdowns, work restrictions, flooding the economy with trillions of dollars, and travel restrictions are increasing pressure.
Just a few of recent articles describing increasing troubles:
- Railroad robberies are again a thing in Los Angeles. Those items that got lost in transit are probably off the side of a railroad in LA.
- China’s zero-Covid policy is closing factories and locking down cities.
- China restricting its border with Vietnam is leaving lots of fruit to rot in trucks waiting to get into the country.
- SoCal ports struggling even more with so many dockworkers out sick.
- Currently truck drivers in Canada must be vaccinated and starting 1/22 drivers entering the US must be vaccinated, putting further strains on the supply chain.
Associated Press via Daily Bulletin – 1/14/22 – Thieves raiding rail cargo containers in Los Angeles – Add to the supply chain problem massive thefts from shipping containers in Los Angeles. Thieves are breaking into the containers while trains are stopped and looting what looks to be high-value stuff.
Coverage of the story exploded over the weekend after CBS LA sent a camera crew out to take video of the trash left by crooks looting parked trains in Los Angeles.
CBS LA puts a series of tweets, which you can access here, showing video and describing the story.
According to CBS LA, Union Pacific trains regularly stop in Lincoln Heights waiting to get pulled into the Intermodal facility close to downtown LA. At the Intermodal facility all the cars will be mixed together into the loads going to different locations around the country.
While the trains wait in Lincoln Heights criminals break into the containers, search for packages destined for consumers which look valuable, throwing packages that look like they are low value on the ground.
As a result, there are thousands of packages visible for hundreds of feet from where the reporter stood. He was told this location was cleaned up 30 days ago so this mass of looted packages is just a month’s worth of what wasn’t worth stealing. Looks like there are thousands of packages which are of course now listed as “delayed” by Amazon, UPS, and a variety of retailers.
The twitter thread says Union Pacific has complained to the Los Angeles DA, reporting there are 90 containers a day broken into and looted. Union Pacific says they arrested over 100 people in three months but the Los Angeles DA turned those crooks loose within 24 hours on low or zero bail.
If that stuff you ordered online is ‘delayed’, it may be on the ground next to the railroad track in Lincoln Heights. Or it may have already been resold on-line.
Saw a video on twitter yesterday (was originally posted on tictok) with several dozen people around a train grabbing stuff and walking off. Medium sized boxes. Large screen TVs. Dozens of people swarming the containers.
Wall Street Journal – 1/11/22 – China Lockdowns Hit Factories, Ports in Latest Knock to Supply Chains – China is taking harsh lockdown steps when any cases of omicron appear. For example, in the city of Anyang, 80 Covid cases including two omicron infections resulted in officials imposing a city wide lockdown of the 5 million residents.
Two dozen cases surfaced in the port of Ningbo, near Shanghai. That is the third busiest port in the world in terms of container volume. Several factories closed in that city. If the port itself is shut down for one week, estimates from analysts are that would halt shipping of $4 billion of goods including $236 million of integrated circuits.
Article mentions there are many factories around the country that have shut down because of a few infectsions.
Two reported cases (a different commentator pointed out the oddity of two cases here, two cases there, and exactly two cases over the other place is often the only acknowledgment of the virus spread) in the major city of Tianjin resulted in a mandatory test of every one of the 14 million residents of the city. Several factories are closed.
Danger to the world economy is closing some major cities or halting operations at a few ports will create even more severe strain on the entire supply chain.
Watch out for additional disruptions.
Wall Street Journal – 1/18/22 – China’s Zero–Covid Policies Cause a Traffic Jam in Vietnam as Farmers Suffer – Harsh efforts from China to eliminate all spread of Covid means they have severely restricted truck traffic from Vietnam. Massive amount of fruit raised in Vietnam is sold in China. Realized prices are something in the range of 10 times higher in China compared to selling it in Vietnam or other nearby countries.
Chinese government has closed some entry gates and restricted other locations at the border. As a result there are thousands of trucks, according to the article, waiting to bring fruit into the country. The fruit is rotting. Some farmers are exporting it elsewhere in the area at 10% of the price you get in China.
A little longer wait and the truckers will have to find some place to dump the rotted fruit.
Courtesy of the Chinese government.
Wall Street Journal – 1/11/22 – Southern California Ports Struggle to Trim Cargo Backlog as Omicron Surges – On 1/10/22 there were 800 dockworkers out from work at the two ports of Long Beach and Los Angeles. That is about 10% of the typical workforce on any one day.
The impact is two ships waiting to be unloaded only got a fraction of the workers requested and there were no dockworkers available to unload 13 ships already docked.
Backlog of ships is 102 down from a peak of 106 on New Year’s Day, after the backlog rose to around 100 in late November.
Spreading omicron infections is going to further slow down processing ships through Long Beach and Los Angeles. Those two ports handle about 40% of the containers coming into the United States.
Townhall – 1/20/22 – Why Supply Chain Issues Will Likely Get Worse – Deliberate government policies continue to obstruct the supply chain.
Canada previously had a requirement that all truck drivers must be vaccinated to be on the road. They have dropped the requirement for Canadians driving inside Canada. However, they still require any US driver entering the country be vaccinated. With an estimated 40% or 50% of US truck drivers vaccinated that means half of US drivers cannot enter Canada.
Starting 1/22/22 the US will require all drivers entering the country to be vaccinated. That includes Americans. That means every truck driver crossing the Canadian border in either direction will have to be vaccinated.
Trucking companies will have to find vaccinated drivers to shuttle trailers back and forth across the border. Other drivers will deliver them in country. That creates tremendous inefficiencies and will slow down the entire supply chain. By the way, there is $45 billion of trade going back and forth across the Michigan-Canadian border every year.
Those inefficiencies will slow down shipping and make everything more complicated. An increased risk of failure for containers will further come up the rest of the supply chain.
Courtesy of the Canadian and US national governments.