We’ve spoken at length in these pages (most recently two weeks ago) about the supply chain bottlenecks that are hampering our economy and making it difficult for companies and individuals to buy what they need.
Ryan Johnson, who describes himself as “a twenty year truck driver”, gives us an insider’s perspective on why (he claims) “America’s ‘Shipping Crisis’ Will Not End“. It’s a long and very interesting article, outlining all the obstacles and inefficiencies in the shipping process, and I recommend it very highly. It’s worth your time to read it, if only to understand the shortages your local shops and suppliers are experiencing. Mr. Johnson begins:
I have a simple question for every ‘expert’ who thinks they understand the root causes of the shipping crisis:
Why is there only one crane for every 50–100 trucks at every port in America?
No ‘expert’ will answer this question.
He concludes (bold, underlined text is my emphasis):
My prediction is that nothing is going to change and the shipping crisis is only going to get worse. Nobody in the supply chain wants to pay to solve the problem. They literally just won’t pay to solve the problem. At the point we are at now, things are so backed up that the backups THEMSELVES are causing container companies, ports, warehouses, and trucking companies to charge massive rate increases for doing literally NOTHING. Container companies have already decreased the maximum allowable times before containers have to be back to the port, and if the congestion is so bad that you can’t get the container back into the port when it is due, the container company can charge massive late fees. The ports themselves will start charging massive storage fees for not getting containers out on time — storage charges alone can run into thousands of dollars a day. Warehouses can charge massive premiums for their services, and so can trucking companies. Chronic understaffing has led to this problem, but it is allowing these same companies to charge ten times more for regular services. Since they’re not paying the workers any more than they did last year or five years ago, the whole industry sits back and cashes in on the mess it created. In fact, the more things are backed up, the more every point of the supply chain cashes in. There is literally NO incentive to change, even if it means consumers have to do holiday shopping in July and pay triple for shipping.
This is the new normal. All brought to you by the ‘experts’ running our supply chains.
There’s more at the link.
I can only repeat my earlier warning: “The US economy is in imminent danger of seizing up solid“. That’s not an exaggeration. Go re-read that earlier article in the light of Mr. Johnson’s comments, and it becomes even clearer.
Friends, we are facing a situation where serious shortages of basic goods and services may become a reality. If even the simplest supplies (bread, milk, TP, and so on) run out because they (or their ingredients) can’t be distributed due to clogged transport channels, what will happen to the average US consumer? How many people can cope for a few days, or a few weeks, without what they consider to be essentials? How many of them have made emergency preparations to do so? I suspect many have done nothing at all – and they’re not going to be happy at having to do without. Might that lead to urban social unrest, particularly if stirred up by proponents of racial tension and political correctness and extremism?
This is a potential flash-point for all sorts of knock-on problems – even for Big Brother (a.k.a. the “nanny state”) to try to intervene and regulate what’s shipped where and when, and by whom, and at what price. Given the government’s monumental inefficiency in organizing anything of importance (most recently its response to COVID-19), that thought should give you no comfort at all.
Be prepared.
Peter
I'm noticing the day after Halloween none of my local grocery stores are advertising Turkey specials for Thanksgiving. That's unusual.
Apparently their is a Turkey shortage this year too
There's plenty of turkeys in DC…Esp. 1600 Penn. Ave.
The whole crane issue is a swing and a miss. There are roughly the same number of cranes at ANY seaport in the world. I've seen Japanese ports, Italian ports, German ports, Australian, Singaporian, and a number of US ports. They are all similarly configured and that is based on pier size and ship size serviced. NOT the numbers of trucks that service the port.
Peter is calling this mostly West and Northeast coast problems "America" a bit of a synecdoche? And never is a long time, like eternal, and nothing of man is eternal. Non coastal America, what used to be called flyover country before the great airline cancellations, will go back to local manufacture if need be. And that would be a beautiful thing.
Localities such as LA, San Francisco, Portland and Seattle are all controlled by people with similar agendas, so there won't be solutions coming from those quarters. Nationally there is the Butt guy and Let's go Brandon.
So Steve S is on the ball (above). We manufacture in the US for the US and work with Canada and Mexico to the extent possible.
+1 to Old NFO, Steve S, and LL.
I've heard that other ports are busy but moving. Is the main problem really Long Beach with their unique issues, or is it a truly national problem?
Given that the government could screw up a one-car funeral, letting them manage (or mangle) what gets shipped and when would be an unmitigated disaster.
Karl Denninger has several good posts about this issue over at alt-market.us.
It's true that making more of everything domestically will improve supply chain stresses, but the problem is we don't realize just how dependent we have become on imports in so many areas. Even where the US is ostensibly self sufficient, say farming for example, what happens when that complicated thresher, combine, harvester etc breaks down? Many of the critical parts needed to repair it are made in China. There is the story of the Charlotte FL water treatment plant that is mandating water restrictions because a key component broke and the part needed must be imported– something that may take months w current conditions. Repeat this predicament in just about every facet of your life– electrical grid, automobile manufacture and repair, transportation… Even if we wanted to ramp up domestic production tomorrow, many of the critical parts, chemicals, metals, etc.. are not made/ mined here anymore. We are in a #%#%load of hurt and we don't know the half of it yet.
OLDNFO beat me to the punch vis the container crane number issue. Point in fact, the number of cranes IS increasing, as is their size and speed. The old bottlenecks, like the NY/NJ mafia limiting the number of containers moved per hour, has been gone for a few years now.
Tomorrow we're going to the 2nd largest ship ever to visit the port of NY/NJ, and they're taking a few grades of fuel, which will require 2 barges, so we're scrambling to make sure we get done before they're ready to sail. There will be 3-4 ships on the same pier, and I believe there are 15 container cranes, so I would assume 5 cranes will service the ship, 4 if there are 4 ships present. Which means that the ship can be emptied and restowed in 36 hours and headed back to China. Granted, the terminal piers are 3 sides of a box, so there are 3 more ships on the other side, and one on the 3rd side. 10 ships at a time, requiring 60 trucks per hour to service each crane… granted, some of those moves are done by Hustlers, special vehicles that moves containers around the yard for transshipments and transfers… still, you can get the idea that the number of cranes isn't an issue these days. Now, the number and usage of ports still is. There are still 2 terminals in NY that are not at maximum use.
Oh, and this week the charter rate for container ships actually fell for the first time. Interesting to see.
Make it America, as locally as possible and sell it here and all your shipping problems go adios .
You'll; pay more for goods and for labor and for benefits but you'll be able to recover that money when they buy what you make and everyone except the globalists elite gets richer.
Make it in America…yes, yes. Wonderful. Out of what? The raw material to make the parts of the widgets that make the widgets, is almost certainly going to have plenty of imported bits and pieces in it. And that is just the widgets to make the widgets that make the factory.
Can we do it? Of course. It will take as long as it took to get into this mess though. So, let's see, that puts us at about 75 years. I'll be generous, chop off two thirds because we aren't actually starting from scratch. That is still a generation. Still a game changer.
As for flyover country doing better than the coasts. Have you all looked at the guts of John Deere combine lately? It ain't being built in Topeka. When you start breeding decent draft horses let me know. (I have two, I can make that snark, I wish they weren't geldings though!)
Wait till all of you realize how much of our medical supplies for both durable medical equipment or the expendables from gauze to gloves are made in China or somewhere in Asia itself. (rarely) Let alone the medications.
Gonna let that same gummit-up that did SUCH a STERLING job of saving our allies in Afghanistan choose how and when and where trucks/trainers/containers move/go to???
Coal will go to Newcastle, refrigerators will go to the southern Boundary Waters or Alaska, canvas will go to Iowa, wheat will go to Dakotas and the Plains…
Yeah THAT will work SO well…
Night driver
Great article about the core issues:
https://www.joc.com/port-news/port-productivity/us-port-congestion-solutions-bump-third-rail-labor_20210413.html
Hey, we're still making money hand over fist while simultaneously gaining ever more power over you peasants. Things aren't good – they're effing INCREDIBLE!
– The Elites
Seems to me that much in the same fashion that Biden and company are seemingly intentionally destroying the American economy California is purposefully attempting to turn the state into a third world craphole.
Extreme covid restrictions on its residents, especially on essential workers such as stevedores and crane operators, not to mention health, law enforcement, and emergency services. And their all out effort to demonize and drive from their presence all fossil fuels and the internal combustion engine.
Not to mention housing restrictions that make it nigh on impossible to find an affordable home any more.
Folks are voting with their feet, and industry will inevitably do the same though in a much slower fashion.
Heard there is a credible proposal to expand a west coast Mexican port, somewhere in the upper Baha with improved multilane highway and an upgraded high speed rail line straight into Arizona. Might see a similar northern solution through Vancouver.
Kiss those California ports adios.
Port of Houston is booming from what I hear even with the increased cost of sea miles around the Horn or through the canal.
Won't even go into all the other craptastic "green" ideas Cali imposes on its residents resulting in brown outs, water restrictions, obscene gas prices, and so on.
Considering the number of problems cropped up since Jan. 20th, how does ANYONE delude themselves it's not intentional?
"First is happenstance, twice is coincidence. The third time, it's enemy action." Ernst Blofeld
We did our shopping for Thanksgiving yesterday and last week – turkey breast currently in the freezer, bottled cranberry sauce from Trader Joe's yesterday … we're set.
We did notice that the local grocery chain HEB was totally out of Halloween candy by Halloween. None left at all, whereas in previous years, there was always masses of Halloween candy on half-price sale after Halloween.
As we went through the HEB, Sprouts and Trader Joes, we tried to figure out what might become problematic in the coming weeks, and stocked up on it.
(Note to self – pick up a couple of four-packs of small propane bottles this week. There's talk that we might have another cold winter and power outages in Texas.)
If you keep pumping more water into the tub than the drain will handle, the overflow is endless.
When/if we stop ordering more goods to be shipped in than the ports can handle at once, the backlog will dwindle and we'll start catching up. Not before.
If they insist on continuing to overload the system until they crush all the other links in the chain too, it will eventually self-correct, but only at the expense of all shipping completely, and whatever's left afterwards will be less capable, not more.
No system can run at 125% of capacity indefinitely, and normal maintenance on every link (ships, cargo cranes, trucks, trains, etc.) is eventually going to start to fail from deferred maintenance, lessening handling and carrying capacity that much more for the long term.
Self-correction in this case looks exactly like COVID total shutdown: nothing moves anywhere.
And what overflow that can be re-directed probably overflows the system in other places, expanding the ripples outward, and exacerbating a local problem into a system-wide disaster.
And the culprit still isn't green truck mandates.
And Uncle Lar,
Mexico ports will help??
The ones where the entire country, top to bottom, is corrupt, since about 5 minutes after Cortez?
Where the cartels control 60% of the country, and the government controls less than 20%?
The country now receiving all the precursors for carfentanil from China, and illicit drugs in general, is going to expand their ability to receive containers from China?
And then you're going to expand the amount of goods transshipped through that turd-world $#!^hole, and bring it across the southern border?
What could possibly go wrong there?
I don't think you're thinking this through very thoroughly.
You guys keep saying "They won't pay to solve the problem"
….it's always "spend" and "pay". Now, if one changes the concept to "investing in", THEN the discussion might have a better chance of going somewhere.
Actually, businesses and services have always had this issue of inadequacy—from only having one bathroom for 50 customers to aisles being too narrow to chairs not having felt tips on the bottom of their legs in businesses with hard surface floors, and the like. These issues seem to be a carryover of a long-ongoing phenomenon.