I think we’re going to see a second wave of shortages. All the back up part inventory had been used up and capacity to build stuff has not caught up to demand so we’re out of buffer. You can see this in supply chains everywhere, inventory of critical parts isn’t getting replenished. It’s not everywhere but there are enough critical bits that are running out that production bottle necks are popping up and causing problems in adjacent industries. Labor shortage is real too, that’s going to be our mechanism for inflation because suddenly wages have become unstuck and labor has some negotiation power
The entire just-in-time economy is crumbling like a sugar cube in tea. The fact that you can't buy green bananas anymore says it all. LOL. In the ten days it took me to redesign my cart to deal with the fact that Metal Supermarkets lies about their stock sizes, my cart went from $190 worth of metal to $370 worth of metal. People keep talking about how the lumber shortage is drawing to a close without recognizing that most of it is driven by wood borer beetles decimating Canadian forests due to climate change. Apples. At the local Kroger. Not on sale. No comment on the fact that these are ruined blems that would never have left the orchard under normal circumstances. It's what you got. Because if they didn't sell you these apples, they'd have no apples to sell.Labor shortage is real too, that’s going to be our mechanism for inflation because suddenly wages have become unstuck and labor has some negotiation power
It seems strange to me that there was no organized labor movement to demand higher wages, and conditions had to deteriorate so far that a streak of chaos was the spark that inspired a mass strike of sorts. I mean we all know that if you scaled the minimum wage from ~35 years ago proportionally to inflation that it's like $25/hour in today's dollars. It's almost like Capital was trying to foment revolution.?
“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.” - Earnest Hemingway, The Sun Also Rises What really happened is conditions for unskilled and semi-skilled labor have been steadily deteriorating since the '70s. Conditions for unskilled and semi-skilled labor deteriorated precipitously starting March 2020. Simple inertia will keep you in place after that. Do you stay home or go back to the job you hated doing worse work for the same amount of money under shitty conditions? Or, since you've already been cast adrift, do you look around for the first time since forever? I recently finished The Outlaw Ocean. It's fuckin' medieval. Granted - container ships are top of the heap as far as the maritime economy is concerned but you're talking about an environment where summary executions, slavery, kidnapping, human trafficking and piracy are the fundamental underpinnings so a bunch of Philippinos stuck offshore for six months with crappy food and no way home? I mean, that basically just puts your average cargo crew on a level with your average fishing crew and if you do that once, you basically need to reconstitute your cargo fleet. You're talking an environment where stow-aways are routinely put overboard in order to avoid the costs of asylum. And you're talking about an economy in which Chinese bridge crew drive Phillipino deck hands like slaves, and both countries are under some changes at the moment. Being at sea used to be a slightly better deal than being on land. It very much isn't anymore. And that is going to completely unravel the global shipping industry because our maritime academy evolved in the treaty and customs cracks plastered over by the pretense of the New World Order.conditions had to deteriorate so far that a streak of chaos was the spark that inspired a mass strike of sorts.
In a labor shortage situation you don’t really need unions to demand higher wages. Employees just quit and go elsewhere. Union wages are actually quite sticky and low on the new hire end due to how contracts always favor seniority and get locked in for many years. Non union wages have been going up quickly to respond to labor shortages but union wages have to wait till next contract. Union leadership is also super stale in most organizations, they really are only effective in newly formed unions where the folks are passionate about organization and demanding reform vs protecting the status quo. The National union leaders are just cancer for the whole movement. I swear they were planted for their incompetence to prevent effective organization.
kleinbl00 'member? I swear, the three of us covered like 20 hot topics (nothing to do with the mall store) in about 90 minutes.The most dramatic expression of this snarl is the purgatory of loaded cargo containers stacked on ships bobbing off the coast of Los Angeles and Long Beach.
Yeah I was annoyed because I took out some ETH at $1300 to buy my mill, and then had to wait six weeks and spend $2000 to get it here. By the time it showed up ETH was at $3300. Of course, by the time the mill got here the wait time had gone up to 3 months and the quote to ship it had broached $10k. I guess it's closer to $30k now. Derek Thompson's "I read this thing in the New York Times" reporting doesn't really touch on the fact that "reserving a container" is a tiny, tiny part of logistics. What's funny is I've been buying stuff like a madman from China this year. All of it comes by air and gets here in a timely fashion. It's not the logistics that are snarled, it's the cheap logistics that are snarled. The price differential between "put 500lbs worth of heavy machinery on a boat" and "put 500lbs of heavy machinery on a plane" was about 2x back in March. I haven't tried to put anything that big on a plane since, but I've got maybe 40lbs worth of machine parts in the closet that were all shipped DHL for free since then. i think that's part of the problem - this isn't really fucking up commerce. It's fucking up manufacturing. It's fucking up agriculture. It's fucking up production.
I don't think so. I'd be curious as to your take; you know hella more about transportation than I do. But in my brief foray into surface shipping, that shit is medieval. Basically, the laws haven't been touched since 1915. Big, dumb container ships only make sense because maritime laws are a giant loophole not subject to globalization; international quarantines and global economic slowdowns not only blasted through that veil like a shotgun, but the general response worldwide has been isolationism. Shipment by air, on the other hand, belongs entirely to the FAA. We've basically allowed an American post-war bureaucracy to dictate air transshipment since the end of WWII and pretty much whatever the FAA wants, the FAA gets. Does air travel suck for the environment? Hells yeah. But shipment by sea involves bunker fuel and magic pipes so it's not like the alternatives are great. Big dumb heavy commodities that only made sense to ship by surface? They make a lot less sense to ship. Small smart light commodities that often got shipped by air? They're gonna be more expensive, but not catastrophically so. You know who this isn't great for? Amazon and Ali Express. "Just give me the cheap Chinese version of the thing I really want" is going to become a lot less compelling, I think.
I hope I do, but in a fairly narrow range. I'd argue "transportation" is as broad as a category as "engineering"; the nuances of shipping logistics are approximately as far removed from my corner of transportation as chemical engineering is to you. I could've chosen that speciality, but I didn't, so beyond knowing some basics like what a TEU is I won't be able to provide much insight. My worry however is not about the refined products, but about all the intermediary and low-value parts that are necessary to create refined products. If shipments are going to suck ass for the foreseeable future, and we have lost the ability to produce much of the basics locally, how are a lot of our products going to get made? A supply chain is only as strong as its weakest link, and I'm worried we're gonna see a lot more weak links the coming years, with problems 'trickling up' from "it's too expensive to ship iron to make bolts" to "it's too expensive to ship bolts to make bicycle frames" to "bicycles are twice expensive and/or out of stock". The current GPU shortage is not exactly caused by these kinds of issues, but it does show just how difficult these processes are to improve or change when necessary.I'd be curious as to your take; you know hella more about transportation than I do.
Been thinking about this. It's a bigger question than anybody really grasps, and a proper understanding of it, in my estimation, requires a lot of synthesis. My hypothesis is that global shipping has been cost-effective because of the cost advantages of lax regulation, antiquated labor standards and a substantial disparity between "nations served" and "nations serving." On the one hand, COVID has forced a lot of industries to modernize. On the other hand, COVID has made awful occupations worse. One of the things I've noticed among all the discussion of employment is that nobody is even bothering to capture the true number. We keep reporting the unemployment rolls as if they mean anything - if you can't collect unemployment, you have zero incentive to report and everyone's unemployment ran out three weeks ago yet this fact has been utterly absent from the discussions. Similarly, "global shipping dominance" will give you a list of flags-of-convenience which are absolutely, fundamentally, entirely irrelevant to the discussion. No, Greece and Panama are not the world's largest shipping nations. It's China by a mile. I believe the shipping industry is exquisitely sensitive to political pressure. The Biden administration could fuck things up for China through executive order or bureaucratic (what an awful word) action. This bird? That's a shipping interdiction bird. I think the Biden administration, as well as the G8, could radically change the face of globalism without anyone getting a vote. Without anyone getting a memo. Do a google news search on "biden shipping" and you will see a mandate. 'cuz that's the other thing nobody is paying attention to - the Biden administration has been doing big, sweeping liberal shit that doesn't inflame any culture wars so the Right hasn't fucking noticed. interesting times.