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Last week Fertilizer producer CF Industries Holdings Inc suspended operations at two UK plants because of soaring natural gas prices. As a result, these fertilizer plants that make carbon dioxide as a byproduct are in sudden shortages and are rippling through the UK food sector, according to Bloomberg.

The shortage of carbon dioxide has forced Online grocer Ocado Group Plc to halt all deliveries of frozen products to customers, and the meat industry warned slaughterhouse operations could “grind to a halt” in weeks.

The British Meat Processors Association warned carbon dioxide supplies could be exhausted by the end of the month, forcing slaughterhouses to close and result in a mass culling of animals.

Last Friday, Ocado halted deliveries of frozen food to customers because of the dry ice shortage.

“It’s quite alarming,” said Nick Allen, head of the meat association. “We’re talking between days and weeks from this really hitting hard, unless somewhere in the world — ideally here in Europe — there are supplies of this that can replace that amount of CO2 very quickly.”

The ripple effect continues as British Soft Drinks Association monitors the carbon dioxide situation as the industry could go flat.

Besides CF Industries, Norwegian fertilizer maker Yara said it would soon reduce ammonia output capacity by 40% because of record-high natural gas prices.

The broader impact could be soaring food and energy inflation across the UK, threatening the country’s post-pandemic economic recovery and financially strain consumers.

UK Supply Chain Crisis

September 18, 2021

UK Supply Chain Crisis

The World Is Still Short of Everything. Get Used to It.

September 1, 2021

The World Is Still Short of Everything. Get Used to It.

Pandemic-related product shortages — from computer chips to construction materials — were supposed to be resolved by now. Instead, the world has gained a lesson in the ripple effects of disruption.

Credit…Tim Gruber for The New York Times

Like most people in the developed world, Kirsten Gjesdal had long taken for granted her ability to order whatever she needed and then watch the goods arrive, without any thought about the factories, container ships and trucks involved in delivery.

Not anymore.

At her kitchen supply store in Brookings, S.D., Ms. Gjesdal has given up stocking place mats, having wearied of telling customers that she can only guess when more will come. She recently received a pot lid she had purchased eight months earlier. She has grown accustomed to paying surcharges to cover the soaring shipping costs of the goods she buys. She has already placed orders for Christmas items like wreaths and baking pans.

“It’s nuts,” she said. “It’s definitely not getting back to normal.”

The challenges confronting Ms. Gjesdal’s shop, Carrot Seed Kitchen, are a testament to the breadth and persistence of the chaos roiling the global economy, as manufacturers and the shipping industry contend with an unrelenting pandemic.

Delays, product shortages and rising costs continue to bedevil businesses large and small. And consumers are confronted with an experience once rare in modern times: no stock available, and no idea when it will come in.

In the face of an enduring shortage of computer chips, Toyota announced this month that it would slash its global production of cars by 40 percent…

…click on the above link to read the rest of the article…

UK Supermarket Boss Says Shortages at Worst Level He Has Seen

August 26, 2021

A truck driver makes a milk delivery to a supermarket in London on Aug. 3, 2021. (Tolga Akmen / AFP via Getty Images)

UK Supermarket Boss Says Shortages at Worst Level He Has Seen

A leading supermarket boss has warned that current UK food shortages are at a “worse level” than he has ever seen.

The food supply chain has been disrupted by a lack of lorry drivers and by a shortage of labour in general.

Steve Murrells, chief executive of the Co-operative Group, told The Times that they had significantly reduced the range of some products. He blamed Brexit and pandemic-related fallout for the shortages.

There’s currently a shortfall of around 90,000 drivers, according to David Wells, chief executive of Logistics UK.

The boss of frozen food retailer Iceland, Richard Walker, told the BBC that unless the problems are resolved now, it could affect the availability of Christmas supplies.

“The driver shortage is impacting the food supply chain on a daily basis and leading to shortages on the shelves,” Walker said. “We’ve had deliveries cancelled for the first time since the pandemic began, about 30 to 40 deliveries a day.”

The British Meat Processors Association (BMPA) said on Aug. 22 that supplies of Christmas favourites like pigs-in-blankets could be affected.

Industry groups say that training for new drivers is taking months, with a backlog of 40,000 missed heavy goods vehicle (HGV) tests.

Walker said the solution is to add HGV drivers to the skilled workers’ list, which would allow them to be recruited from overseas.

He said supply chain problems were a “self-inflicted wound,” from the handling of Brexit, “caused by the government’s failure to appreciate the importance of HGV drivers and the work they do for us.”

Retailers are starting to offer incentives to bring in drivers. Tesco has been offering lorry drivers a £1,000 ($1,370) joining bonus.

…click on the above link to read the rest of the article…

The Shortages Are Going To Get Worse Later This Year As Global Supply Chains Increasingly Falter

August 25, 2021

The Shortages Are Going To Get Worse Later This Year As Global Supply Chains Increasingly Falter

Have you noticed that it is a lot harder to get certain things these days? Just recently, someone in my local area was surprised when her appointment to get the windshield on her vehicle fixed was canceled because it wasn’t possible to get a replacement windshield. This was a windshield for a very common vehicle, and normally that wouldn’t be a problem at all. But these are not normal times. Thanks to several factors that I will detail in this article, global supply chains are now under more strain than we have ever seen in the post-World War II era, and unfortunately it appears that things are going to get even worse as we approach the holiday season.

I know that most of you probably don’t want to hear that the shortages that we are experiencing now are going to get worse.

So you may be tempted to stop reading this article now because you don’t want to see the bad news.

But it is imperative that you understand what is ahead, and so I urge you to keep reading.

Let’s take this one step at a time. Right now, local news outlets all over the country are doing stories about the shortages in their local areas. Here is one example…

Have you recently gone to the grocery store and found some of the shelves empty? If so, you aren’t alone.

Many people can’t find some of their favorite and essential items since the pandemic started.

As that article points out, the stores are trying to order the products that they need.

They just can’t get them.

…click on the above link to read the rest of the article…

What a CATASTROPHIC Supply Chain Breakdown Will Look Like

August 25, 2021

What a CATASTROPHIC Supply Chain Breakdown Will Look Like

“…there were also times when they had the illusion not only of safety but of permanence.” – George Orwell.

When a society falls apart, it’s hard to know exactly how it will all fracture and break apart. We can tell a little bit of our course by the challenges we face as a community, a nation, a world of countries. When war is at your door, you can predict what things you won’t have: electricity, water, gas, safety, and so forth. When a natural disaster strikes, you can also bet on the same services falling apart, and, given the length of the disaster, maybe social order too. Some disasters have a local or regional zone and impacted radius. Some are larger in scope and suck in other stable areas like a spiraling vortex.

How does it fall apart, though? What can you expect from a complete supply chain failure? How can that spiral out of control and pull you and your safe zone in like a vortex? In this video, I want to take you through some of the significant failures that can occur in the supply chain and how they can place pressure on and potentially cause other systems to fail. Our world is a network of systems. As one system fails, it can burden different systems and may cause their failure as well. Understanding these connections, their push and pull, their cause and effect helps us understand and even predict the sequence of any disaster. It helps us know what will play out next. So, let’s jump in…

TINY TREMORS LEAD TO MAJOR EARTHQUAKES

…click on the above link to read the rest of the article…

Australian Truck Drivers Vow To Block Every Major Highway In Radical Anti-Lockdown Strike

August 24, 2021

Australian Truck Drivers Vow To Block Every Major Highway In Radical Anti-Lockdown Strike

As Australians take to the streets to protest the country’s lockdown measures – most recently clashing with police over the weekend, Aussie truck drivers are planning to shut down every major highway across the country and have advised people to ‘stock up on groceries.’

One driver, according to the Daily Mail, declared in a video that truck drivers are ‘planning to shut down the country’ to ‘remove the shit government’ on August 31 beginning at 9 a.m.

He said supply chains would soon be interrupted and urged Aussies to stock up on groceries to get them through the next couple of weeks.

A GoFundMe page has since been launched to support the truckies financially as they prepare to strike from 9am on Tuesday August 31, which will involve ‘blocking every highway entering into every state at the same time’. -Daily Mail

According to the man, truck drivers have been in discussion with people from around ‘the world,’ and have been working with war veterans to carry out the protest.

“The truckies are in, the VETS are in, I’m in. I’m willing to go to jail to save my country and children,” said the man.

It is unknown how many truck drivers are involved in the demonstration, however truck drivers from around the globe have been posting advice online on how to impede efforts by authorities to tow their vehicles.

A GoFundMe page which appears to have been taken down had raised nearly $4,000 for the effort.

…click on the above link to read the rest of the article…

Supply-Chains Brace For Collapse: Port Of LA Fears Repeat Of “Shipping Nightmare” As China Locks Down

August 14, 2021

Supply-Chains Brace For Collapse: Port Of LA Fears Repeat Of “Shipping Nightmare” As China Locks Down

Yesterday we reported that with container shipping rates already blowing out to never before seen levels amid continued chaos in Transpacific shipping as a result of massive port backlogs and production delays in China due to the relentless onslaught of the now-endemic covid, a new and even greater price surge was on deck – an outcome which would nuke hopes for renormalization in soaring inflation – as a result of the partial (for now) shutdown of China’s busiest port by volume (and third-largest container port in the world after Shanghai and Singapore) when operations at the Ningbo Meishan Container Terminal, also referred to as the Meishan Terminal, were immediately suspended following positive Covid test results.

Well, it didn’t take too long for Bloomberg to report that the spread of the delta variant could “lead to a repeat of last year’s shipping nightmares”, and for confirmation look no further than the Port of Los Angeles, the nation’s busiest post, which in June saw its volumes dip because of a Covid outbreak at the Yantian port in China, and which is bracing for another potential decline because of the latest shutdown at the Ningbo-Zhoushan port in China, a spokesman said.

Anton Posner, chief executive officer of supply-chain management company Mercury Resources, said that many companies chartering ships are already adding Covid contract clauses as insurance so they won’t have to pay for stranded ships.

And here is the core problem with all those endorsing a “transitory” inflation spike captured in a perfect soundbite: just when it seemed as if things were just starting to calm down, “and we’re now into delta delays,” said Emmanouil Xidias, partner at Ifchor North America LLC. “You’re going to have a secondary hit.”

…click on the above link to read the rest of the article…

Canada border officers vote to strike, warn of supply chain disruption

July 29, 2021

Canada border officers vote to strike, warn of supply chain disruption

Labor action could begin Aug. 6

Canada Border Services Agency officers prepare to inspect a red intermodal container. — A strike by CBSA officers could impact operations at Canada’s ports. (Photo: Canada Border Services Agency)

Thousands of Canada Border Services Agency personnel have overwhelmingly voted to authorize a strike – something that could throw a wrench into port, cross-border trucking, airfreight and international parcel operations.

The strike could happen as early as Aug. 6, the Public Service Alliance of Canada and its Customs and Immigration Union said on Tuesday. The union represents some 8,500 CBSA employees, including officers serving at ports of entry across the country.

The threat of a strike comes as Canada prepares to reopen its land border to nonessential travel for the first time since March 2020. The timing wasn’t lost on the union, which warned that a strike could lead to “significant disruption to the flow of goods.”

The impacts could bring delays to commercial vehicle traffic and impact parcel deliveries and duties collection, the union said.

CBSA officers serving in essential positions are legally barred from striking. But as American Shipper reported, the legal definition of essential is narrow in scope and doesn’t include collection of duties and taxes, according to a federal tribunal ruling.The Port of Vancouver appears particularly vulnerable as it contends with an unprecedented level of container ship traffic. As the largest port in Canada, any disruption there could have impacts throughout the country and intermodal rail and trucking operations.

The union members have been without a contract since 2018 and are seeking pay parity with other Canadian law enforcement agencies and protections against what they allege is a toxic workplace culture.

…click on the above link to read the rest of the article…

Plunge of Retail Inventories, Collapse of New & Used Vehicle Inventories: The Shortages Depicted in Charts

July 19, 2021

Plunge of Retail Inventories, Collapse of New & Used Vehicle Inventories: The Shortages Depicted in Charts

Inventories at retailers document this mess.

Turns out, when the US government spends $5 trillion in borrowed fiscal stimulus over 16 months, and the Fed hands out $4 trillion in monetary stimulus over the same period, causing asset prices to boom, demand for goods is going to wash over the land in tsunami-like waves, and supply chains that snake all over the world, amid finely honed just-in-time-inventory strategies, get tangled up. And as retail sales spiked in a historic manner, shortages of all kinds have been cropping up, including the semiconductor shortage that has slammed the auto industry with a vengeance.

Inventories at retailers document this mess. Inventories are tight all around, but they’re in catastrophic condition at auto dealers, which before the pandemic accounted for over one-third of total retail inventories.

Inventories at new vehicle dealers, used vehicle dealers, and parts dealers fell to $153 billion in May, down 36% from May 2019, according to data released by the Census Bureau on Friday. And the inventory-sales ratio – with inventories and sales both in dollars, the impact of inflation gets canceled out – dropped to 1.14, the lowest level in the data going back to 1992:

The inventory-sales ratio (inventories divided by sales) is a standard metric in the retail industry. A ratio of 1 means that the retailer has enough goods in inventory for one month of sales at the current rate of sales. This would be 30 days’ supply. A ratio of 2 – meaning 60 days’ supply – is considered healthy in the auto industry.

In dollar terms: The ever-more expensive vehicles in inventory over the years explain all of the long-term rise of inventories in the chart below. Unit retail sales – and unit inventories with them…

…click on the above link to read the rest of the article…

Commodities, Supply-Chains and Structural Changes in Demand

July 17, 2021

COMMODITIES, SUPPLY-CHAINS AND STRUCTURAL CHANGES IN DEMAND

Talk of a new commodity super-cycle may be premature
Once GDP growth returns to trend, commodity demand will moderate
Fiscal and monetary relief are key to maintaining growth and demand
Structural changes in energy demand will prove more persistent

As the spectre of inflation begins to haunt economists, many market commentators have started to focus on commodity prices in an attempt to predict the likely direction of the general price level for goods and services. This indexing of the most heterogeneous asset class has always struck me as destined to disappoint. Commodity prices change in response to, often, small variation in supply or demand and the price of some commodities varies enormously from one geographic location to another. Occasionally the majority of commodities rise in tandem but more frequently they dance to their own peculiar tunes.

Commodity analysts tend to focus on Energy and Industrial Metals foremost; Agricultural Commodities, which are more diverse by nature are often left as a footnote. Occasionally, however, a demand-side event occurs which causes nearly all sectors to rise. The Covid-19 event was just such a shock, disrupting global supply-chains and consumer demand patterns simultaneously.

The chart below shows the CRB Index since 1995: –

Source: CRB, Yardeni

This chart looks very different to the energy heavy GSCI Index, which is weighted on the basis of liquidity and by the respective world production quantities of its underlying components: –

Source: S&P GSCI, Trading Economics

The small rebound on the chart above is not that insignificant, however, it equates to a 55% rise since the lows on 2020. The fact that prices collapsed, as the pandemic broke, and subsequently soared, as vaccines allowed economies to reopen, is hardly surprising. Economic cycles wield a powerful influence over commodity prices; short-term, inelastic, supply, confronted by an unexpected jump in demand, invariably precipitates sharp price increases.

…click on the above link to read the rest of the article…

Third Largest US Chicken Producer Runs Out Of Chicken Wings

May 20, 2021

Third Largest US Chicken Producer Runs Out Of Chicken Wings

At this point, shortages of everything from microchips to potato chips are forcing American businesses to adjust to higher prices and supply shocks, while consumers are forced to pay higher prices at the store. And while high commodity prices (which have come off their highs in recent days as lumber, oil and iron prices declined) have retreated in recent days, we noted that these shortages are expected to last a long time.

One reason is that high prices are good for producers, and it’s too expensive for many companies to build out new production capacity right now. This dynamic is contributing to a looming chicken wing shortage in the US, which might remind some of the bacon-shortage hysteria that has occasionally gripped the US in the past.

Case in point: Sanderson Farms, the third-largest poultry producer in the US (whose engineering firm likely recommended them to suspend plans for plant expansion because prices on everything from lumber to steel to concrete to plastic to copper to machinery to labor skyrocketed, making building unaffordable) has decided that it will pass on expanding its operation despite surging demand for its product that has put it on the cusp of running out of chicken wings.

“I need a plant to open up next week, but it is not a good time to be building,” said Chief Executive Joe Sanderson, who Bloomberg quoted.

As we have reported, demand for chicken in the US is through the roof. Without expansion, the nation’s third largest poultry plant can’t take any new orders:

“We’re totally sold out and we’ve had people call us to service them and we cannot take on anymore business, and that’s not a good place,” Sanderson said.

…click on the above link to read the rest of the article…

“Gas Run Has Begun” – Fuel Stations Run Dry Amid Hacked Pipeline

May 10, 2021

“Gas Run Has Begun” – Fuel Stations Run Dry Amid Hacked Pipeline

Gas shortages are being reported in the Southeast of the US amid the recent cybersecurity attack that temporarily shut down one of the largest pipelines in the US.

Colonial Pipeline Co. Chief Executive Officer Joseph Blount said the company was in the process of restoring its systems but wouldn’t resume fuel shipments until the ransomware had been removed, according to Bloomberg.

At the moment, Colonial Pipeline is manually operating a segment of pipeline between North Carolina to Maryland and expects a complete system restore by the weekend. However, gas shortages are already being reported across North Carolina to Florida to Alabama.

On Monday, North Carolina Governor Roy Cooper signed an Executive Order declaring a state of emergency, temporarily suspending motor vehicle fuel regulations to ensure adequate fuel supply supplies throughout the state.

WLOS’ Caitlyn Penter reported gas shortages in North Carolina.

Penter said long gas lines were developing.

WEAR-TV’s Renee Beninate shows that one gas station in Northwest Florida was selling regular gas for $4.29/gallon.

More people in Florida panic buying fuel for $4.50/gallon.

In Fitzgerald, Georgia, one Twitter user shows long gas lines at an enmarket gas station.

One South Carolina gas station was out of unleaded and plus.

Someone in Myrtle Beach panic hoarded gas.

People are getting worried about the shortage.

A massive line of people waiting for fuel in Asheville, North Carolina.

People waiting to fuel up at one gas station in Plymouth, North Carolina.

Not sure where, but the run has begun.

…click on the above link to read the rest of the article…

The Ugly Truth About Renewable Power

May 1, 2021

The Ugly Truth About Renewable Power

When Texas literally froze this February, some blamed the blackouts that left millions of Texans in the dark on the wind turbines. Others blamed them on the gas-fired power plants.

The truth isn’t so politically simple. In truth, both wind turbines and gas plants froze because of the abnormal weather.

And when Warren Buffet’s Berkshire Hathaway said it had plans for additional generation capacity in Texas, it wasn’t talking about wind turbines. It was talking about more gas-fired power plants—ten more gigawatts of them.

While the Texas Freeze hogged headlines in the United States, across the Atlantic, the only European country producing any electricity from solar farms was teeny tiny Slovenia. And that’s not because Europe doesn’t have any solar capacity—on the contrary, it has a substantial amount. But Europe had a brutal winter with lots of snow and clouds. Despite the often-referenced fact that solar panels operate better in cooler weather, sub-zero temperatures are far more drastic than cool. This is not even to mention the cloud cover that, based on the Electricity Map data above, did not help.

If we go back a few more months, there were the California rolling blackouts of August that state officials and others insisted had nothing to do with the state’s substantial reliance on solar and wind power. The state’s own utilities commission disagrees.

This is what the California Public Utilities Commission and the state’s grid operator, CAISO, said in a joint letter to Governor Newsom following the blackouts:

“On August 15, the CAISO experienced similar [to August 14] supply conditions, as well as significant swings in wind resource output when evening demand was increasing. Wind resources first quickly increased output during the 4:00 pm hour (approximately 1,000 MW), then decreased rapidly the next hour…

…click on the above link to read the rest of the article…

Producer Prices Surge. Germany, China, other Countries Are Now Exporting Inflation, Adding to US Inflation Pressures

April 26, 2021

Producer Prices Surge. Germany, China, other Countries Are Now Exporting Inflation, Adding to US Inflation Pressures

Central banks still brush it off as just “temporary.”

Producer prices of German industrial products in March rose by 0.9% from February, after having risen by 0.7% in February from January, and after having spiked by 1.4% in January from December, the biggest month-to-month jump since 2008.

Compared to March last year, producer prices jumped by 3.7%, according to the German Federal Statistics Office (Destatis), the biggest year-over-year jump since November 2011. The surge began last fall, after sharp declines earlier in the year:

Part of what caused the 3.7% increase from March last year — but not the surge over the past few months — is the “base effect“, since in February and March last year the producer price index was declining, and the latest year-over-year results are measured from those low points.

But factory prices have been rising on a month by month basis for the seventh straight months — with large increases over the past three months. And that has nothing to do with the base effect.

Prices of intermediate goods jumped by 5.7% year over year in March, the fastest since July 2011, due mainly to sharp rises in the price of secondary raw material (47%) and prepared feed for farm animals (16%). There were also increases in durable consumer goods (1.4%) and energy (8%), which in large part were driven by a sharp increase in electricity prices (9.6%).

Producer prices are now rising fast in the major manufacturing economies.

In China input costs rose 4.4% in March from a year earlier up from a 1.7% increase in February. It was the sharpest rise since July 2018. As the world’s biggest exporter, China’s rising prices stoke inflation around the world.

…click on the above link to read the rest of the article…

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