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60 minutes report on bogged down supply chain

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Posted by Euclid on Wednesday, November 17, 2021 12:36 PM
With this supply chain failure, comes a new revelation.  That is that the offshore manufacturing craze was dependent on the reliable over-the-ocean supply chain.  But in truth, the supply chain was always seriously defective because it could not accommodate a demand surge.  But we never knew that until now, when it has been revealed by the odd occurrence of an unmentionable contingency.  But now we know that the off shore manufacturing craze was unstainable. 
 
Now we know that the cost of shipping is too high to cover the savings of off shore manufacturing.  If China raised their prices high enough to cover the shipping, would our consumers be willing to pay the price?
 
Here is the main question:  If the Chinese product cost were raised to cover shipping cost over the ocean, could U.S. manufacturers make the same products in the U.S. at cost lower than the Chinese cost?
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Posted by Convicted One on Wednesday, November 17, 2021 11:48 AM

I ponder that there may have been a string of veiled falsehoods we were wooed with when we were told that paying money to raise bridges, deepen harbors, and expand tunnels was a pot of gold in waiting.

Cheaper merchandise, but at what cost? Didn't someone once warn us about that "vast sucking sound"?  The manufacturing jobs left, and now those lower prices appear ready to follow.

We were enticed with the prospect of "good paying port jobs"  making up for the losses in manufacturing,.. but now people are insisting that our only option is to spend even more money automating the operation of the ports? Do I hear that sucking sound again?

Then there was the promise that once those off shore manufacturing economies matured,  then foreign demand for US manufactured finished goods would evolve.  How has that one played out?

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Posted by Convicted One on Wednesday, November 17, 2021 11:27 AM

CMStPnP
International trade based on the consumer generally constricts severely during wartime.

My main thought was that the current dilemma is a result of factors we at least believe are under our control to fix.  But if the international picture deteriorated,  even through no cause of our own...  and long term shipping disruption was a result, then we could easily end up back in the very same predicament no matter how much money we throw at our ports.

 Put another way, perhaps there is a valuable lesson to be learned from the current state of affairs. 

Add to that, the worm-on-the-hook supporting the current model was  always "savings".  Now that it appears  the elements who once made that a reality have now decided to cut a bigger slice out for themselves,  perhaps it's time to re-evaluate priorities?

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Posted by Convicted One on Wednesday, November 17, 2021 11:09 AM

MidlandMike
Wouldn't it cost more that $250 (plus the cost of shipping?) for a replacement container in Asia for the next shipment?

As I qualified earlier, that was 30 years ago, and according to the guys selling them, ...no  

I  had a conversation here with mr Hemphill on that very question 15 +/- years ago, and he generally agreed.  I guess it's not cheap to send them back empty?

I can verify that I bought one, and the guy selling them had many more he'd liked to have  sold at the time.....and they were NOT beat-up 'leakers'.

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Posted by tree68 on Wednesday, November 17, 2021 10:08 AM

The USS Nimitz (CVN68) has just over 1000' of anchor chain on each anchor, as an example.

There are several spots well off LA/LB that would permit anchoring, but there are spots that ore over 1,400 feet deep...

 

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Posted by Euclid on Wednesday, November 17, 2021 9:12 AM

BaltACD

 

 
Euclid
Here is the new proposal by the LA Ports to force waiting ships to move 150 miles off shore while waiting to dock.  Reducing pollution that moves onto land is one of the objectives.  Yet the video says pollution produced will rise for ships anchoring further out because they will be in the storm zone and will have to remain with full power on standby to maintain position in the stormy weather.  

The video says that the basic motive for this change is the imporoved "optics" of the public not seeing ships waiting to unload, and thus not perceiving a port backlog.   

https://www.youtube.com/watch?v=yqDRmI5UvfA

 

How far down is the ocean floor 150 miles off shore?  Is it deep enough that anchors don't even reach bottom?

 

I don't know how deep they could anchor.  But the guy with the video said that the ships would need to be with all power on line in order to frequently adjust their positions due to the wind drift there being continuous from north to south.  So that suggests that maintaining their positions by anchoring may not be possible due to ocean depth or other reasons.  

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Posted by Shadow the Cats owner on Wednesday, November 17, 2021 8:31 AM

Plus that far away from shore no way to get fresh food or water to the crew.  So they basically become prison ships for their crew while waiting to unload.  

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Posted by BaltACD on Wednesday, November 17, 2021 8:19 AM

Euclid
Here is the new proposal by the LA Ports to force waiting ships to move 150 miles off shore while waiting to dock.  Reducing pollution that moves onto land is one of the objectives.  Yet the video says pollution produced will rise for ships anchoring further out because they will be in the storm zone and will have to remain with full power on standby to maintain position in the stormy weather.  

The video says that the basic motive for this change is the imporoved "optics" of the public not seeing ships waiting to unload, and thus not perceiving a port backlog.   

https://www.youtube.com/watch?v=yqDRmI5UvfA

How far down is the ocean floor 150 miles off shore?  Is it deep enough that anchors don't even reach bottom?

Never too old to have a happy childhood!

              

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Posted by Euclid on Wednesday, November 17, 2021 8:12 AM

Here is the new proposal by the LA Ports to force waiting ships to move 150 miles off shore while waiting to dock.  Reducing pollution that moves onto land is one of the objectives.  Yet the video says pollution produced will rise for ships anchoring further out because they will be in the storm zone and will have to remain with full power on standby to maintain position in the stormy weather.  

The video says that the basic motive for this change is the imporoved "optics" of the public not seeing ships waiting to unload, and thus not perceiving a port backlog.  

 

https://www.youtube.com/watch?v=yqDRmI5UvfA

 

 

 

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Posted by JayBee on Tuesday, November 16, 2021 8:16 PM

Euclid

 

TWO QUESTIONS:

How long will it take to upgrade the ports to meet the demand surges we now know are possible? 

Figure 15 - 20 years. What they really need is to do something like what Rotterdam has done, expand out into the ocean. They need more land and they need to reconfigure the whole harbor. As a first step they need to merge the two separate Port Authorities into one. Each city would get ownership based on the current relative sizes of each port. Then get started on the Environmental Impact Report and the redesign based on reclaiming land from the Pacific Ocean. Reconfigure the berths so that the largest ships currently in use could easily reach their berths and provide a turning basin so that the ships would not need to back out very far. Next you would need to automate all of the terminals at least to the standard of the ECT Euromax Terminal in Rotterdam. The biggest problem with the Ports of LA/LB is that they were developed piecemeal over the years. By contrast the Port of Rotterdam was blessed by two things for the Dutch skills at reclaiming land from the North Sea, and second by World War 2, which totally destroyed the port giving them the ability and the need to start from scratch.

 

How long will it take for the supply chain to completely collapse if the current demand spike continues without the ports being upgraded?

 I think that you could make the case that the supply chain has already collapsed and it can't get much worse.
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Posted by MidlandMike on Tuesday, November 16, 2021 7:42 PM

Convicted One
My first hand experience is dated,.. going back to my involvement in warehousing in Oakland early 90's. But there was always a surplus of unwanted empties there, as well, The prevailing rule of thumb at the time was, if they could sell an empty box for $250. they were money ahead versus the cost to send it back to Asia empty.

Wouldn't it cost more that $250 (plus the cost of shipping?) for a replacement container in Asia for the next shipment?

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Posted by Backshop on Tuesday, November 16, 2021 6:00 PM

Paul Milenkovic

Diet Coke?

Can't you get the same taste experience for much less money by licking a galvanized metal fence post?

Not during cold weather.  Didn't you ever see Christmas Story?Big Smile

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Posted by Paul Milenkovic on Tuesday, November 16, 2021 5:09 PM

Electroliner 1935

 

 
tree68
 Backshop

People who keep large sums of money in banks are fools.  Your emergency fund of several months to a year or so is  (all you need.  

When I hear the interest rates that organizations I'm familiar with are getting on their savings accounts (they can't really invest in the stock market, etc), I'm almost amazed that the banks aren't charging for the privilege of holding the money... 

 

 

Shhhh. Don't give them ideas. 

One of my vices is Diet Coke. Used to be able to find it (2 ltr) on sale for $0.88 to 0.99. Now it's up to over $2.00 and sales are 3 for $5.00 (=1.66/bottle ). 

 

 

 

Diet Coke?

Can't you get the same taste experience for much less money by licking a galvanized metal fence post?

If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?

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Posted by Electroliner 1935 on Tuesday, November 16, 2021 4:23 PM

tree68
 Backshop

People who keep large sums of money in banks are fools.  Your emergency fund of several months to a year or so is  (all you need.  

When I hear the interest rates that organizations I'm familiar with are getting on their savings accounts (they can't really invest in the stock market, etc), I'm almost amazed that the banks aren't charging for the privilege of holding the money... 

Shhhh. Don't give them ideas. 

One of my vices is Diet Coke. Used to be able to find it (2 ltr) on sale for $0.88 to 0.99. Now it's up to over $2.00 and sales are 3 for $5.00 (=1.66/bottle ). 

 

 

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Posted by CMStPnP on Tuesday, November 16, 2021 3:28 PM

Convicted One
Question 3: How would we ever cope if  it was war and not greed (and/or) incompetence clogging  ocean trade?

International trade based on the consumer generally constricts severely during wartime.

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Posted by rdamon on Tuesday, November 16, 2021 1:28 PM

That makes sense.  I have not seen a add to "Drive a Big Rig" on late night TV in awhile.

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Posted by Backshop on Tuesday, November 16, 2021 12:45 PM

The problem isn't so much the lack of drivers as the lack of good companies willing to pay drivers a wage commensurate with the long hours, weeks away from home, etc.  Salaries haven't kept up with inflation the last 25 years, or more.

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Posted by rdamon on Tuesday, November 16, 2021 12:20 PM

That may be the main reason they want to drop the Interstate age from 21 to 18 

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Posted by Murphy Siding on Tuesday, November 16, 2021 12:15 PM

adkrr64

What are the requirements with respect to truck drivers and previous D/A convictions? Are companies federally required to avoid hiring any such individuals in any capcity, ever? Or is there a sort of statute of limitations? If someone gets a DUI when they are 20, can they drive a truck when they are 30, if the ensuing 10 years were clean? Does it cargo type (i.e. HAZMAT) factor into how much flexibility there is around a previous D/A incident?

Would like to hear Shadow the Cat Owner's input on this.

 

I don't know about the time frames. When we look at hiring someone with a CDL (Commercial Driver's License), our insurance company checks the national register. When someone with a CDL screws up, that goes on the register. If a driver's record is not clean enough for our insurance company to cover, we don't need them.

Thanks to Chris / CopCarSS for my avatar.

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Posted by Convicted One on Tuesday, November 16, 2021 11:59 AM

Rather than dwell on incidentals, why not focus on the main premise? War would make the billions spent to upgrade the ports  a waste.  Let's invest the money on becoming LESS dependent on globalism, not more.  Big Smile 

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Posted by Euclid on Tuesday, November 16, 2021 11:40 AM

Convicted One,

Those cases of greed are basically the result of the supply chain failure.  I thought you were referring to greed causing the supply chain failure when you referred to it clogging ocean trade.

You said:

 

Question 3: How would we ever cope if  it was war and not greed (and/or) incompetence clogging  ocean trade?

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Posted by Overmod on Tuesday, November 16, 2021 11:19 AM

charlie hebdo
know, but transloading to/from flat cars is much quicker when not stacked.  Speeds up the flow.

In some cases, dramatically.  One of the promises of sideloading (as I learned about it as a kid from Kneiling's columns) is that a whole trainload can be offloaded in the time it would take for one car, and loaded in not much more time (the extra time being mostly safety-related).

That the sideloading systems in the '60s generally 'failed to thrive' economically is not generally related to their technical feasibility.  And in fact, where rapid asynchronous mode change becomes desirable, especially in countries that use flats for containerization... the advantage of sideloading for that reason alone may become compelling.

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Posted by Convicted One on Tuesday, November 16, 2021 11:14 AM

One thing in particular in that video resonated with me. The claim that the majority of available containers chassis were marooned under empty boxes waiting to go back on ships for the (empty) return run.

Aren't we always told of the unenviable chore in railroading of non-revenue return of empty box cars, hoppers, tankers...etc?  Wonder if something similar might be at work here?

My first hand experience is dated,.. going back to my involvement in warehousing in Oakland early 90's. But there was always a surplus of unwanted empties there, as well, The prevailing rule of thumb at the time was, if they could sell an empty box for $250. they were money ahead versus the cost to send it back to Asia empty. That's why you tended to notice an abundence of derelict containers sitting on the ground behind businesses being used for sheds and auxiliary storage...they were a dime a dozen compared to purpose-built similar structures.

Maybe the solution to freeing up chassis might require a little "outside the box" thinking?

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Posted by Convicted One on Tuesday, November 16, 2021 10:54 AM

Euclid
I don't understand your point about the supply chain problem being caused by greed or incompetence.  Can you elaborate on that? 

 

Did you not watch the video?  Cost to transport containers up from $1,000 to over $25,000 while the carriers are enjoying "record profits"?  One importer forced to pay over one million dollars in  penalties during September alone?   "Woe is me"  etc? (why allow a good crisis go to waste?)

And as for incompetence, everybody in the video with their "he started it" round-robin of finger pointing?

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Posted by Euclid on Tuesday, November 16, 2021 10:47 AM

My answers to question one and two would be:

Question One:  10 years minium.  

Question Two:  8-1/2 months maximum.  However the current demand spike may not continue past this Christmas season.  Although it is not clear how much of the spike is being caused by this Chirsmas season versus being caused by a longer range trend of everyone isolating and cacooning at home.  

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Posted by charlie hebdo on Tuesday, November 16, 2021 10:45 AM

SD60MAC9500
 

 

 
charlie hebdo

The report mentioned how the city-state of Singapore is spending 50 billion dollars on a new container port. Ports like Rotterdam an Hamburg are very automated, including transfer to railcars. Maybe single stack has some real advantages in turn around?

 

 

 

If your're talking about IM trains. Clearance restrictions in Europe preclude doublestacks. European freight operators wish they could doublestack containers..

 
 
 

I know, but transloading to/from flat cars is much quicker when not stacked.  Speeds up the flow.

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Posted by Euclid on Tuesday, November 16, 2021 10:39 AM

Convicted One

 

 
Euclid
TWO QUESTIONS: How long will it take to upgrade the ports to meet the demand surges we now know are possible?   How long will it take for the supply chain to completely collaspse if the current demand spike continues without the ports being upgraded?

 

Question 3: How would we ever cope if  it was war and not greed (and/or) incompetence clogging  ocean trade?

 

The supply chain  problem would be worse if there was a war.  I don't understand your point about the supply chain problem being caused by greed or incompetence.  Can you elaborate on that?  

I conclude that the problem is being caused by higher demand than the basic port infrastructure can handle. 

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Posted by Convicted One on Tuesday, November 16, 2021 10:23 AM

The port authorities have announced a delay in implementing the threatened fines.

https://abcnews.go.com/US/wireStory/la-long-beach-ports-delay-fines-backlogged-cargo-81192119

They claim that since the fines were announced, marked improvement in flow has taken place, resulting in a 26% decline in overdue cargo.

Proof that government intervention can serve to remedy ills within the transportation sector .

 

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Posted by adkrr64 on Tuesday, November 16, 2021 9:29 AM

What are the requirements with respect to truck drivers and previous D/A convictions? Are companies federally required to avoid hiring any such individuals in any capcity, ever? Or is there a sort of statute of limitations? If someone gets a DUI when they are 20, can they drive a truck when they are 30, if the ensuing 10 years were clean? Does it cargo type (i.e. HAZMAT) factor into how much flexibility there is around a previous D/A incident?

Would like to hear Shadow the Cat Owner's input on this.

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Posted by Convicted One on Tuesday, November 16, 2021 9:28 AM

Euclid
TWO QUESTIONS: How long will it take to upgrade the ports to meet the demand surges we now know are possible?   How long will it take for the supply chain to completely collaspse if the current demand spike continues without the ports being upgraded?

Question 3: How would we ever cope if  it was war and not greed (and/or) incompetence clogging  ocean trade?

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