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West Coast Ports Shut Down For Holiday Weekend: Supply Chain Halt Threatens Havoc On Reeling Economy
West Coast Ports Shut Down For Holiday Weekend: Supply Chain Halt Threatens Havoc On Reeling Economy
A week ago, when we wrote “Catastrophic Shutdown Of America’s Supply Chain Looms” As West Coast Port Worker Talks Break Down“, few people noticed… as was to be expected: after all with January’s retails sales just around the corner, retail sales that were supposed to surge after the vast December disappointment, nobody wanted reality to spoil the party.
Then, following the very disappointing January retail sales led to the worst back-to-back drop since Lehman (this time there was no polar vortex to blame), confirming the US economic situation is far worse than the panglossian cheerleaders, led by the Fed, would have you believe, people started to notice, especially when we presented dramatic footage showing that the Ports of LA and Long Beach harbor have become cargo ship and tanker parking lots.
Fast forward to today, when over the past 48 hours there has suddenly been a deluge of sellside reports, rushing to bring attention to this topic, such as the following:
- West Coast port disruptions likely to cloud outlooks as Q4 earnings approach – Goldman Sachs
- Port Slowdowns Intensifying, Risk Heightened Across Retail Space: Credit Suisse
- Further West Coast Port Disruption A Possibility – Deutsche Bank
- All’s not quiet at the Western ports – Bank of America
And so on. Why the dramatic shift in attention to what as our readers knew 10 days ago, could be a crippling event to the US economy? Simple: as we again explained last Thursday, “in an economy that is desperate for any “one-time, non-recurring” item to explain what is now global secular stagnation and economic slowdown, an excuse such as a port strike, or a harsh winter, or a strong dollar, or plunging crude, may be precisely the scapegoat that the central-planning doctor ordered.”
…click on the above link to read the rest of the article…
The invisible network that keeps the world running
The invisible network that keeps the world running
It’s been just over 45 years since the Apollo Moon landings, and some would have it that we are failing to build big anymore; that we’ve since become too fascinated with the small, too impressed by our tablet computers, games consoles, and smartphones that we don’t invest in grand, world-changing engineering projects.
Stand on the bridge of a container ship docked in a mega-port in Korea, however, and it’s clear that’s just not true. The global supply chain that brings us those tablets and phones, and pretty much everything else from our clothes and food to our toys and souvenirs, is nothing short of a moon shot itself – a vast, unprecedented engineering solution to a truly astronomical logistics problem. The fact that it’s hidden from most people’s sight, and that it has become so utterly reliable and efficient to the point of transparency, doesn’t make it any less of an achievement of human technical endeavour.
To find out more about this huge, invisible network, I accompanied a group of architects and designers called the Unknown Fields Division for a rare voyage on a container ship between Korea and China. The aim of the trip was to follow the supply chain back to some of the remotest parts of China and the source of our consumer goods – and what we saw as we travelled through mega-ports and across oceans looked closer to science fiction than reality.
Early rise
We’re picked up at 9am from our guesthouse in the Korean city of Busan by a local ‘ground agent’ for the shipping company Maersk, whose ship will be carrying us for the next week. They have at least one of these personnel handlers in every major port in the world, their job being to ensure crew members make their way through each country’s unique and complex maze of customs and immigration bureaucracy, and on to their ships on time.
…click on the above link to read the rest of the article…
“Catastrophic Shutdown Of America’s Supply Chain Looms” As West Coast Port Worker Talks Break Down
“Catastrophic Shutdown Of America’s Supply Chain Looms” As West Coast Port Worker Talks Break Down
For those who have been following the recent ISM reports, one of the recurring concerns of respondents in both the manufacturing and service sector has been the congestion at West Coast Ports – which handled 43.5% of containerized cargo in the U.S and where transiting cargo accounted for 12.5% of US GDP – as a result of reduced work output by the local unions who have been more focused in recent weeks on ongoing wage hike negotiations.
And according to the latest update from the 29 west coast ports that serve as the entry point of the bulk of Asia/Pac trade into and out of the US, things are about to get far worse for America’s manufacturing base, because as RILA reported earlier, talks between the Pacific Maritime Association (PMA) representing port management, and the International Longshore and Warehouse Union (ILWU) officially broke down on Wednesday, and without an agreement, experts have suggested that nearly 30 west coast ports could be shut down within a week.
As RILA reports, “a work slowdown during contract negotiations over the past seven months has already created logistic nightmares for American exporters, manufacturers and retailers dependent on an efficient supply chain. A complete shutdown would be catastrophic, with hundreds of thousands of jobs at risk if America’s supply chain grinds to a halt.”
…click on the above link to read the rest of the article…
