Daily Briefing - Persistent Shortage of Everything

Cyberattack season about to begin.

Merely voicing what we have been discussing for months, the supply chain chaos and California LA/LB port gridlock not only continues, it keeps getting worse. All news or changes to logistics and supply chain right now are rather slow, not because of the chaos.

But because of the Chinese New Year, after that, depending on China Covid policy and how Omicron spread, things might move fast, and it will cascade into… something. It will be something else regardless where the wind blows.

I don’t expect the situation in the US to get better this quarter, with luck, maybe halfway Q2, with no major disruption plays out. Or major incompetence.

Removing fuel, from a much-needed fire, and just staying on the trend I previously outlined, Europe continues to deepen in a energy crisis. Nothing much to add besides all my previous posts, like the situation in the US, the EU under it’s misguided desire to placate their elites and misguided policy, deepens itself into problems and open itself to massive disruption.

Like its oil production suffering cyberattacks EU wide. This is just the beginning, I expect a sharp increase on these.

A tire shortage, one essential item for the function of a nation, persists. Yes, persists, because since October there was a tire shortage in a lot of states. Give the current Chinese New Year and port gridlock, I don’t expect these to get better anytime soon…

And the increasing shortage of warehouse space, as a hedge against costs, logistical lag time and port gridlock. Not only was expected, but as with everything else on this post, already has been happening and worsening as time goes by.

This Bloomberg article from November 2021, Snarled Supply Chain Is Making U.S. Warehouse Shortage Worse was already a big signal. Another shortage that didn’t get any better was both drivers for the warehouses and workers.

Since I spent 12 hours today writing different posts, I lack the cognitive capacity for my usual snarky, smirking comments.

I just don’t see how we see any sort of meaningful improvement this year.

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Supply chain chaos and port gridlock could drag on into 2023

Alphaliner: Market correction forecasts ‘repeatedly kicked down the road’

With Lunar New Year 2022 now underway and container freight rates, ship charter rates and port congestion still at or near all-time highs, timing sentiment is turning to 2023.

“Forecasts for a market correction have been repeatedly kicked down the road,” said Alphaliner on Tuesday. “A growing consensus now suggests that the current supply chain chaos will last at least throughout 2022.”

Confidence in the shipping boom’s duration has propelled the sale-and-purchase market for container vessels to record levels. “The number of container vessels changing hands reached an all-time high in 2021 after shipowners appeared willing to pay almost any price to secure tonnage,” said Alphaliner, which noted that the growing consensus on longer market strength may “justify [2021] purchases with delivery deferred to this year.”

If the sustained-demand theory is correct, and if there is no economic downturn in the U.S. that slashes demand in 2022, the argument that supply chain pressures and port congestion will persist into 2023 appears increasingly credible. That, in turn, implies a lengthier period of much higher transport costs and much longer transit times for cargo shippers.

The U.S. port congestion situation is much worse now than it was a year ago.

At the ports of Los Angeles and Long Beach, which handle 40% of U.S. imports, 40 container ships were idling offshore and waiting for berths on Feb. 1, 2021. A year later, there were 101.

California grapples with port congestion, supply chain kinks

“The issues highlighted in November persist. Empty containers piling up at warehouses and truck facilities continue to occupy chassis supply, without which nothing can move.” — Chris Shimoda

Europe Is Losing Nuclear Power Just When It Really Needs Energy

Countries are plunging deeper into an energy crisis, but some governments are still shutting down reactors.

What couldn’t have been predicted was that Europe would find itself mired in one of the worst energy crises in its history. A decade later, the continent’s biggest economy has shut down almost all its capacity already. The rest will be switched off at the end of 2022 — at the worst possible time.

Rubber shortage causing tire delays, price increases

Tire pricing estimates change week to week for consumers, first choice not always an option

“There were zeroes across the board when we went to order from warehouses,” said Johnson. “It was stuff that would normally be in stock at local distribution centers, stuff that you’d have 100 different choices on sizes and types. Now, you scroll three to four pages in hopes of finding something that you can get in a couple of days that you don’t need to pay freight for.”

Warehouse Space Is the Latest Thing Being Hoarded

Logistics firms are finding new options to deal with a scarcity of storage, including building multistory facilities and choosing locations farther from coastal ports.

As retailers and logistics companies try to stockpile goods to hedge against supply chain problems, they are facing a new challenge: In many parts of the United States, there is little to no space available to stash the merchandise.

The shortage of commercial warehouse and industrial space is the latest fallout from pandemic-fueled growth in online shopping and shows few signs of abating. But the squeeze is spurring new thinking about how to manage storage, handle distribution and set up new delivery systems for everything from pet food to beauty supplies.

Cyberattack Disrupting Northern European Oil Hubs in Major Ports

Port facilities across northern Europe are all reporting what appears to be a spreading cyberattack targeting the region’s oil operations. After initial reports of disruptions in Germany, reports are now also coming in from the Netherlands and Belgium saying that it is impacting the loading and unloading of barges at a time when the oil market is already strained by winter weather. Local prosecutors in the three countries are investigating while reports indicate the European Union’s policy agency has also offered to support the investigation.

The first instances of what appears to be a sophisticated cyberattack were reported in Germany late last week. Oiltranking Group and Mabanaft discovered they had been a victim of a cyber incident on January 29.