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HonorableTB
Dec 22, 2006

hey bb u want sum fuk?

I SURVIVED THE AWFUL BLOCK, AGDQ 2018




Hi all, I've noticed there hasn't been a thread created yet to discuss the ongoing worldwide supply chain crisis that has left shelves bare, shipments uncertain, Dems in Disarray, and Christmas at risk of being canceled for children everywhere.

First up, I'm a historian, not an economist, and the main reason I wanted this thread is so that people who are knowledgeable about this can make nice effortposts for those of us who don't know why we can't find things in grocery stores anymore.

Some discussion topics to get us started:

1. There aren't enough truckers to unblock the ports!
Biden's 24/7 Port Schedule Not Working

quote:

President Joe Biden has ordered California ports to stay open all night to ease supply chain jams — but data shows that truckers aren't showing up to collect the cargo.

According to shipping giant Maersk, around half of its 2,000 available appointments for truckers at its giant terminal on the Port of Long Beach went unused on Friday, The Washington Post reported.

Truckers aren't showing up because they either don't have the chassis available to hold the cargo or because warehouses are full, experts say.

Plus, the industry is also grappling with a record shortage of drivers.

2. Shelves are starting to empty out! gently caress!!!
Shopping Trip Shows Supply-Chain Crisis

quote:

During an everyday errand run, The Atlantic's staff writer Derek Thompson said he found that snarls in the global supply chain had created an "everything shortage." Thompson said what should have been a quick errand run for an at-home COVID-19 test, some paper towels, and prescription drugs turned into a sort of multistore scavenger hunt.

The shopper went to a CVS, whose at-home COVID-19 tests and paper towels had sold out. Then, he went to a Walgreens that had run out of everyday prescription medications, as well as a Target, whose ransacked shelves were "alarmingly barren, like the canned-food section of a grocery store one hour before a hurricane makes landfall," he said.

I'll let the thread take it from here, but let me leave you with a great YouTube:

https://www.youtube.com/watch?v=hWTFG3J1CP8

The Man Who Arranges The Blocks posted:

I am the man who arranges the blocks!
But tomorrow I think I'll stay in bed
The winter is cold, I've got plenty of gold
And I'm standing in line for a loaf of bread
Maybe we'd be better off
If we brought down Gorbachev

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Solkanar512
Dec 28, 2006



So I keep hearing about problems with lack of space and whatnot at ports in California, why aren't ports in Oregon and Washington taking on extra load? I know they're smaller, and not directly where producers want them, but they still have rail connections and a few extra days should be better than waiting at sea. What am I missing here, just a lack of reporting on those ports already at capacity? Other limitations?

Epic High Five
Jun 5, 2004





Solkanar512 posted:

So I keep hearing about problems with lack of space and whatnot at ports in California, why aren't ports in Oregon and Washington taking on extra load? I know they're smaller, and not directly where producers want them, but they still have rail connections and a few extra days should be better than waiting at sea. What am I missing here, just a lack of reporting on those ports already at capacity? Other limitations?

Some companies have tried this, though with smaller ports nearer to LA. I think the primary obstacle they've reported is that the challenge then becomes it being twice as hard to get trucks out there to haul stuff out

HonorableTB
Dec 22, 2006

hey bb u want sum fuk?

I SURVIVED THE AWFUL BLOCK, AGDQ 2018




Seattle is one of the country's biggest ports and handles an enormous amount of trade from Asia. Our port facilities are massively backlogged and I've seen cargo ships waiting in the Sound for days for there to be space to unload the containers, quite frankly I don't remember the last time, if ever, I've seen *this* many ships going in and out of the Port of Seattle. The guys on Harbor Island must be having a field day, I've already seen at least one congratulatory circlejerk article published by the previous port commissioner who ordered container space to be expanded on Harbor Island (which is already a manmade island in the Sound specifically for the purpose of being a massive warehouse for the Port's overflow) because everyone gave him poo poo for what was considered a massive waste of spending on port facility expansions that would never be used or ever pay for themselves

edit: he got my vote today for port commissioner tbh, that was a pretty solid "this guy knows what the gently caress is up with ports" moment

edit 2: port no longer seems like a real word

HonorableTB fucked around with this message at 19:24 on Oct 28, 2021

Solkanar512
Dec 28, 2006



Great, thanks for the additional info!

Mr. Fall Down Terror
Jan 24, 2018


Solkanar512 posted:

So I keep hearing about problems with lack of space and whatnot at ports in California, why aren't ports in Oregon and Washington taking on extra load? I know they're smaller, and not directly where producers want them, but they still have rail connections and a few extra days should be better than waiting at sea. What am I missing here, just a lack of reporting on those ports already at capacity? Other limitations?

they are also backed up

every port which handles TEU aka containers, aka "random stuff", is experiencing backups for a variety of reasons, primary among them being a shortage of truckers to haul containers away from the ports

"just raise wages" is the obvious answer, but the trucker shortage predates the pandemic and supply chain problems because this kind of short haul trucking is a miserable job regardless

long beach/los angeles gets the most press because it is the largest container port (not largest port, that is south louisiana by a large margin) and directly adjacent to a major metro area, full of journalists, who can see all the ships abnormally sitting around. but all of the major container ports - south california, seatac, NY/NJ, savannah, are all backed up for similar reasons. you even see the same problems internationally at other container ports. the overall reduction in trade during covid 2020 lead to both a relative and absolute increase in trade in 2021, and while in economic terms everything will shake out and stabilize into an equilibrium eventually, what this means while that new status quo is reached is a disruption and empty shelves

other contributors to the crisis is backups at warehouses and distribution centers. any sort of chaos at any link in the chain introduces more chaos at other links, and increased delays, and increased costs. in the before times we had it good as everything became streamlined and cheap. now it's not that way, and it will be that way again, but not for a while. now is a good time to practice lessening one's dependence on material goods

RBA Starblade
Apr 27, 2008

Going Home.

Games Idiot Court Jester


I haven't seen anywhere with any real lack of anything except at home Covid tests, but I've only been in and around cities recently. I assume it's more of a rural issue?

AtomikKrab
Jul 17, 2010

Keep on GOP rolling rolling rolling rolling.


I live in Maryland, We doing fine over here. I think the port of Baltimore is even going "Hey shiiiips come over here, we got room and brand new fancy cranes for you to unload with"*

*We had a delivery of brand new all electric container cranes like last month. Cranes so big they barely fit under the bridges on the way.*

Frostyhawk
Jan 21, 2012

Bird Up!


Mr. Fall Down Terror posted:

long beach/los angeles gets the most press because it is the largest container port (not largest port, that is south louisiana by a large margin)

By tonnage, the Port of Houston is actually the largest port in the country, and that being said, things are really backed up there too, so yep, pretty much hosed all over!

Epic High Five
Jun 5, 2004





Frostyhawk posted:

By tonnage, the Port of Houston is actually the largest port in the country, and that being said, things are really backed up there too, so yep, pretty much hosed all over!

Isn't the big divide in metrics between Houston and the rest "gulf coast is all liquid oil and the rest is all far less dense consumer goods" or has that changed with the upended patterns we've been seeing lately?

KillHour
Oct 28, 2007






We just need to wait for blue conveyor belts to finish being researched and that should take care of the throughput issues.

UCS Hellmaker
Mar 29, 2008

mega. milk.

Toilet Rascal

Some of its media driven though, some of the dumbest takes have been from the initial pandemic rushes and the best one being from england along with prices in pounds. Theres a big issue with some right wing media blowing this up as a way to make people panic.

CommieGIR
Aug 22, 2006

Santa's gonna cut you man, Santa's a blade man, man.
-----------------------------------
SA is funded by your AV purchases, thank you!



Pillbug

UCS Hellmaker posted:

Some of its media driven though, some of the dumbest takes have been from the initial pandemic rushes and the best one being from england along with prices in pounds. Theres a big issue with some right wing media blowing this up as a way to make people panic.

Plus a lot of the supply chain issues were already in effect as of Christmas last year, but the news wasn't jumping on it nearly as heavily.

Eric Cantonese
Dec 21, 2004

You should hear my accent.


Prices are up in NYC, but availability is still good. I feel kind of spoiled because delivery times still seem close to the old pre-pandemic standards.

At least in Manhattan.

CommieGIR
Aug 22, 2006

Santa's gonna cut you man, Santa's a blade man, man.
-----------------------------------
SA is funded by your AV purchases, thank you!



Pillbug

We've had spotty availability for specialty products like wet cat food, etc. But average food products seem readily available without issue.

Solkanar512
Dec 28, 2006



Here's a weird one for you - all the flavored cream cheese at the local Fred Meyer (Kroger) was gone with little signs saying that these products wouldn't be available for a while. Rather odd, I would have thought those were locally made like other dairy products. But it's mostly "oh, you don't have literally every flavor of Mt. Dew" or "my FedEx shipping dates are all hosed up".

Absolute shortage on Gunpla though, and releases keep getting pushed back again and again. Not too surprised.

lobster shirt
Jun 14, 2021

I'm lifting up black bodies Jerry and I'm loving every minute of it!


The weirdest shortage I have seen, on a consistent basis, is that there is way more peanut butter spread and way less actual peanut butter on the shelves in grocery stores in my city. Also I haven't been able to get peanut butter flavored protein bars for months. Very weird! I live in Houston too so it's not like I'm far away from regional ports and logistics hubs.

The availability of normal stuff like meat and veggies and dairy is still good, but it's all gotten more expensive.

Lester Shy
May 1, 2002

Goodness no, now that wouldn't do at all!


The biggest shortage I've seen over the past 18 months is the yeast and flour drought of spring 2020. I did my first big grocery pickup order in several weeks today and it was one of the few times that they've had absolutely everything that I ordered, even the meat that was on sale.

Mr Luxury Yacht
Apr 16, 2012




Lester Shy posted:

The biggest shortage I've seen over the past 18 months is the yeast and flour drought of spring 2020. I did my first big grocery pickup order in several weeks today and it was one of the few times that they've had absolutely everything that I ordered, even the meat that was on sale.

That was less the supply chain having major issues and more half the country deciding to get into baking all at once because everyone was stuck inside with nothing to do from what I recall.

Harold Fjord
Jan 3, 2004



Here's some bits from a long thread with more info about the issue. Which in LA is apparently having enough space for empty containers so that full containers can be unloaded.
https://twitter.com/typesfast/status/1451543779484258307?s=20
https://twitter.com/typesfast/status/1451543782516740099?s=20
https://twitter.com/typesfast/status/1451543784504897546?s=20
https://twitter.com/typesfast/status/1451543797645647877?s=20

Mr. Fall Down Terror
Jan 24, 2018


in my neck of the woods its mostly just random things that are hard to get - gatorade for some reason, wet cat food, gourmet crackers are the things we've consumed that are having chronic shortages. this is as like a problem sourcing the packaging as anything else. at least some of the problem with empty shelves is lack of shelf stockers, because that is a poo poo job. places with rock bottom pay like wal-mart are suffering more heavily from this (always have been) where at my local publix, which pays good wages and benefits, there is high turnover but positions remain filled with new faces

Mr Luxury Yacht posted:

That was less the supply chain having major issues and more half the country deciding to get into baking all at once because everyone was stuck inside with nothing to do from what I recall.

right, loving everyone started baking in spring 2020 and wiped out the flour supply

Owlofcreamcheese
May 22, 2005
Probation
Can't post for 5 hours!


Buglord

I feel like supermarkets have some amount of bare shelves, I went into a store a few days ago and the whole coffee row was just bare, but that stuff seems to come and go. It does feel like a bunch of things are just like, perma out of stock when I'm ordering for work.

Like, ordering laptop cases from apple, or some sorts of network switches just get you "ship date, 2022" and no further information. Lots of stuff we ordered in early summer is just coming now or has not come. Sort of technology stuff from the chip shortage, but laptop cases don't have chips in them, some stuff just can't be sourced for some reason right now.

Oracle
Oct 9, 2004




Our local Panera is completely out of coffee and hot tea. That was weird. (still have fountain drinks including green tea stuff, no other place has run out of coffee, though I have heard its getting more scarce).

HonorableTB
Dec 22, 2006

hey bb u want sum fuk?

I SURVIVED THE AWFUL BLOCK, AGDQ 2018




The grocery store was out of peas, of all things. We also haven't been able to get bags for the litter genie, the arrival date keeps getting pushed back so they're probably on a container ship somewhere. If insulin starts becoming short we're in major trouble, my girlfriend is a type 1 diabetic so it is kind of important!!

LionArcher
Mar 29, 2010




So you're telling me to buy my Mechanical keyboard parts next week if I want them by Christmas? (they aren't group buy pieces) (Presents for my family will be gift cards at this point).

Dapper_Swindler
Feb 14, 2012

endless gurgling about dumb shit on a dying forum.

most of the stuff i see is ordering from like smaller shops online. i buy dumb weird poo poo from nerd shops and t-shirt stuff. and they have taken weeks to process. shipping is slow but only like a week and half at most. most of the big stores i go to still have lots of merch but it takes them somewhat longer to replace poo poo. i think the bare shelves exist but its mostly certain types of food or some electronics and luxury items.

Killer robot
Sep 6, 2010

I was having the most wonderful dream. I think you were in it!


Pillbug

Mr. Fall Down Terror posted:

in my neck of the woods its mostly just random things that are hard to get - gatorade for some reason, wet cat food, gourmet crackers are the things we've consumed that are having chronic shortages. this is as like a problem sourcing the packaging as anything else. at least some of the problem with empty shelves is lack of shelf stockers, because that is a poo poo job. places with rock bottom pay like wal-mart are suffering more heavily from this (always have been) where at my local publix, which pays good wages and benefits, there is high turnover but positions remain filled with new faces

right, loving everyone started baking in spring 2020 and wiped out the flour supply

And that caused disruption if even if it was just people making bread at home instead of getting it from supermarkets and restaurants, since retail and commercial supply chains are distinct. Likewise, the toilet paper shortage wasn't just hoarding, it's because commercial and home toilet paper are different products made in different mills, and when lockdowns mean people are pooping at home instead of in workplace or public toilets, you can't just start shipping those big-rear end rolls to supermarkets instead.

Also totally reading "wet cat food and gourmet crackers" as a different shopping list than intended.

Mr. Fall Down Terror
Jan 24, 2018


look, we serve our cats hors d'oeuvres, whats the loving problem

Mr. Fall Down Terror fucked around with this message at 14:42 on Oct 30, 2021

StratGoatCom
Aug 6, 2019

Our security is guaranteed by being able to melt the eyeballs of any other forum's denizens at 15 minutes notice





https://www.freightwaves.com/news/carriers-must-move-60k-containers-out-of-la-lb-by-halloween

oh dear.

sinburger
Sep 10, 2006

*hurk*




Is this an intentional fee to motivate movement of empty containers, or is this the result of the existing regulations that are contributing to the bottleneck?

My understanding is that one of the major issues driving this bottleneck is that containers can only be stacked 2 high, meaning that surplus containers are being left on chassis. It seems really dumb that they haven't temporarily suspended these rules to help alleviate a global supply chain crisis.

KillHour
Oct 28, 2007






Removing safety regulations "temporarily" has never in the history of man either backfired or resulted in them not going back in after. Nope, never.

KirbyKhan
Mar 20, 2009

I post posts about posts

Soiled Meat

Just sell all the containers unlike each lootboxea. 0.2% chance for a box loaded with graphics cards.

UCS Hellmaker
Mar 29, 2008

mega. milk.

Toilet Rascal

KillHour posted:

Removing safety regulations "temporarily" has never in the history of man either backfired or resulted in them not going back in after. Nope, never.

Understanding was that was due to nimby laws because it trashes the view. Containers get stack way more then two high while in cargo ships.

KillHour
Oct 28, 2007






UCS Hellmaker posted:

Understanding was that was due to nimby laws because it trashes the view. Containers get stack way more then two high while in cargo ships.

Well then let me amend my previous statement to "they did."

https://losangeles.cbslocal.com/202...ting-to-unload/

Bar Ran Dun
Jan 21, 2006

When there were five in the bed and we all rolled over I said nothing, because I would not fall off.

Wrote this years ago. Pandemic did what I was worried the trade war would do.

Bar Ran Dun posted:

Systems, Business, Trade, Kanban, and Political Economy

This a bit rambling and it's not polished and it's probably not coherant yet. But here it goes.

There is a very useful concept from the Foundations of Cybernetics I’d like to start with. For every technology, be it a physical technology or a conceptual one there is a corresponding set of ideas and concepts, an (or almost) ideology, that allows one to use the technology in question most efficiently. Basically when one has a tool one also has to have a suite of concepts to use that tool most effectively. With that in mind I’m going go all the way back to the beginning. I think one needs to look at the technologies and historical events that gave rise to systems thinking to really understand it. This is a very, very simplified representation of a steam cycle.

Steam cycle



A boiler, boils and then superheats steam, it runs through the turbines which turn a generator, the steam is condensed and then as water it is pumped back into the boiler. Look at the diagram. Obviously the system and the drawing is informed heavily by thermodynamics. But I’m trying to communicate the following characteristics: The circular nature of the cycle, the flows of steam and water represented by lines, and the stocks of various liquids inside each of the parts. The lines showing flows between individual components. This diagram omits controls, but I’ll get to that in a sec. Anyways stocks are how much poo poo (water in a tank, steam in a boiler, etc) X things. Flows are how fast poo poo is moving X things per second. Flows can indicate what will happen in a system, but you need stocks to know when it will happen. Now one of the ways to control systems, is valves. Valves can do things like open and close. Or they can be throttled. Or a line can take pressure feed back from a pipe against a spring tension (or theses days a controller) and keep a flow at a particular rate (a analog solution). These are controls. Controls let one maintain the output one wants across variable inputs. One uses controls to keep a system from blowing up basically.



I’m going to play fast and loose with the history here but eventually WWII happens. During the war there is a lot of development in maths and we get tools like linear programming, that let's one maximize or minimize for desired values. There also is a problem after the war. How the hell does one get a rocket to fly where one want’s it to? Control theory solves this problem. They take concepts, particularly the math for how that pressure control valve works and they apply it to rocketry. Controls theory is how they solve the problem of getting rockets to fly straight. See those simple valves, can be expressed as terms in differential equations. That same math can describe rockets, electronics, etc. All of these things (and some other concepts from other disciplines like ships stability) eventually come together and form a discipline called Operations research. The controls / stock and flow modeling part sometimes gets called the “Differential Equations Paradigm” and eventually we can digitize the industrial controllers with it. Eventually we turn this poo poo on everything. In business operations research gets used as ”management science”. In the sixties Kennedy’s eggheads, the whiz kids, this is the way they’re thinking , the tools they are using. Rand Corp pioneers a lot of this type of modeling. Eventually it becomes one of the standard ways we look at business. Managers use linear programming to maximize production and profits. Businesses are modeled using ideas from the circular stock and flow . That steam cycle, the suite of concepts used to describe that, can also be used to describe a business or business cycles. In fact when executives talk about creating value designing systems is what they mean. And I don’t mean I’m inferring this. I mean I’ve asked, and they give this answer. They are creating circular systems that take in inputs and spit out money. Some of these models get pretty sophisticated look at things like SCOR as good example. And I would remind you this type of supply chain modeling is what makes apple, one of the most valuable companies in the world. It’s what Tim Cook is good at.



Something vitally important to understand. A lot of these models are constructed and then spread. They then get applied and even taught by people who couldn’t have made them and don’t really understand them.
Anyway systems thinking gets used to model economics and trade, the economist Wille posted here: https://forums.somethingawful.com/showthread.php?threadid=3862896&userid=0&perpage=40&pagenumber=11#post488017309
Is a great example amd what prompted this post. And important because it shows how compatible systems thinking is with dialectic though, because of the circular nature of the model. A number of times he talks about using stocks and flows to model trade and currency flows after the switch to fiat currency. He talks at length about using stock and flow models (and I think he is applying them correctly and reaching correct conclusions with them). Think tanks, consultancies (McKinsey is a good current example) they all use models built on these ideas. I’ve done some simple modeling in this area for grad school.

Anyway eventually somebody (the Japanese, but I don’t know enough about the specific people to tell which ones, Toyota is a big player) takes this thinking and comes up with the idea of minimizing inventory (a stock) by balancing logistical flows. One can really supercharge a business’ return on investment by bringing it’s inventory holding costs down as low as possible. This idea is called Kanban. Now the principle here is basically just that pressure control valve I told you about earlier. Flows are controlled to reduce the need for inventory. This idea becomes wide spread. Process management (which is more than Kanban and proceeds it) becomes widespread and largely in conjunction with growing globalization. Something to have in mind. You and I are if we are employees are stocks to be minimized to maximize cash flow and return to shareholders.

I wrote all that to say this. Now we have business systems that are very sophisticated, they use models like SCOR, to minimize their inventories (and again it’s worth noting inventory can be considered include employees) and make more money . But systems with very low stocks tend to be less stable. In physical systems, like the steam cycle, poo poo blows the gently caress up when things go wrong. Now in business where we have managers applying models they didn’t construct and are merely applying (hmmm now that’s familiar) and those models tend reduce stocks, they’re reducing stability in the system.

When it gets too hard to steer around the rocks, sometimes we hit the rocks. And this is the underlying thing that’s been worrying me about this escalating trade war.

rxcowboy
Sep 13, 2008

I have slipped the surly bonds of Earth; fucked both a chick and her mom

I will get anal. Oh yes.

I work for a large industrial bakery in Baltimore. We run 24/7 and average around 120,000 lbs of bread a day. Here's some current issues:

1: We keep running low on ingredients like rye and gluten. Many of our large use bulk ingredients come from overseas and as best as I can figure those ships are now idling somewhere near Cali.

2: We use a shitload of chemical additives to make bread cheaper, faster and last longer. Small amounts per dough but vital for the formula. We're running out of them. The problem with substitutions is we're running out of the easy to swap ingredients and getting to the point where the information we have to legally put on the bag will change

3: Which brings me to point three, we keep running out of bags. Bag orders are set up months in advance, sometimes a year. We can't get the bags we already contracted for, there's no way in hell to put in a rush order for new bags with new nutritional info. So the realistic scenario is we will be selling bread that doesn't match the caloric information and ingredient list on the bag.

4: Labor shortage right now is insane. We can't get workers, and the pay is decent. We're a second chance employee for many felons, so someone with a record can make 60k a year in Baltimore, have a 401k, great insurance and be in a union. And we just can't get workers. It's never been this bad.

Tldr: Running out of poo poo to make bread, bags to put it in and people to put it in the bags

Bar Ran Dun
Jan 21, 2006

When there were five in the bed and we all rolled over I said nothing, because I would not fall off.

Bar Ran Dun posted:

https://www.nytimes.com/2021/08/20/opinion/us-globalization-tariffs.html?referringSource=articleShare

Lol I fired an email off at Krugman asserting he was underestimating the effect of the container flow issue on inflation and I’m pretty sure this is his the response:

Honey, Who Shrunk the World?

When I was in my 30s, my parents gave me a sweatshirt bearing the words “Global shmobal.” At the time, I was going to many economics conferences; when my parents would ask me what the latest conference was about, I apparently always replied, “Global shmobal.”

What I didn’t know at the time was that the global was about to get even shmobaler. In the mid-1980s, world trade had recovered from the disruptions and protectionism of the interwar period, but exports as a share of world G.D.P. were still back only to around their level in 1913. Starting around 1988, however, there was a huge surge in trade — sometimes referred to as

hyperglobalization — that leveled off around 2008 but left the world’s economies much more integrated than ever before:

Image
Exports as percentage of world G.D.P.
Exports as percentage of world G.D.P.Credit...World Bank
This tight integration has played an important background role in pandemic economics. Vaccine production is very much an international enterprise, with production of each major vaccine relying on inputs from multiple nations. On the downside, our reliance on global supply chains has introduced forms of economic risk: One factor in recent inflation has been a worldwide shortage of shipping containers.

But how did we get so globalized? There are, it seems to me, two main narratives out there.

One narrative stresses the role of technology, especially the rise of containerized shipping (which is why the box shortage is a big deal). As the work of David Hummels, maybe the leading expert on this subject, points out, there has also been a large decline in the cost of air transport, which is a surprisingly big factor: Only a tiny fraction of the tonnage that crosses borders goes by air, but air-shipped goods are, of course, much higher value per pound than those sent by water, so airplanes carry around 30 percent of the value of world trade.

By the way, pharmaceuticals, presumably including Covid-19 vaccine ingredients, are mainly shipped by air: An alternative narrative, however, places less weight on technology than on policy. That’s the narrative one often sees associated with Trumpists (although they’re not the only ones with something like this view): Globalists pushed to open our borders to imports, and that’s why foreign goods have flooded into our economy.

And the truth is that from the 1930s up to Donald Trump, the U.S. government did, in fact, pursue a strategy of negotiating reductions in tariffs and other barriers to trade, in the belief that more trade would both foster economic growth and, by creating productive interdependence among nations, promote world peace.

But the long-run push toward more open trade on the part of the United States and other advanced economies mostly took place before hyperglobalization; tariffs were already very low by the 1980s:

While there weren’t big changes in the policies of advanced economies, however, there was a trade policy revolution in emerging markets, which had high rates of protection in the early 1980s, then drastically liberalized. Here’s the World Bank estimate of average tariffs in low and middle-income countries:

You might ask why a reduction in emerging-market tariffs — taxes on imports — should lead to a surge in emerging-market exports. So let’s talk about the Lerner symmetry theorem — or, actually, let’s not and just say that tariffs eventually reduce exports as well as imports, typically by leading to an overvalued currency that makes exporters less competitive. And conversely, slashing tariffs leads to more exports. Basically, nations can choose to be inward-looking, trying to develop by producing for the domestic market, or outward-looking, trying to develop by selling to the rest of the world.

What happened in much of the developing world during the era of hyperglobalization was a drastic turn toward outward-looking policies. What caused that trade policy revolution and hence helped cause hyperglobalization itself?

The immediate answer, which may surprise you, is that it was basically driven by ideas.

For more than a generation after World War II, it was widely accepted, even among mainstream economists and at organizations like the World Bank, that nations in the early stages of development should pursue import-substituting industrialization: building up manufacturing behind tariff barriers until it was mature enough to compete on world markets.

By the 1970s, however, there was broad disillusionment with this strategy, as observers noted the disappointing results of I.S.I. (yes, it was so common that economists routinely used the abbreviation) and as people began to notice export-oriented success stories like South Korea and Taiwan.

So orthodoxy shifted to a much more free-trade set of ideas, the famous Washington Consensus. (Catherine Rampell suggests that should be the new name for D.C.’s football team. Nerds of the world, unite!) The new orthodoxy also delivered its share of disappointments, but that’s a story for another time. The important point, for now, is that the change in economic ideology led to a radical change in policy, which played an important role in surging world trade: We wouldn’t be importing all those goods from low-wage countries if those countries were still, like India and Mexico in the 1970s, inward-looking economies living behind high tariff walls.

There are, I think, two morals from this story.

First, ideas matter. Maybe not as much as John Maynard Keynes suggested when he asserted that “it is ideas, not vested interests, which are dangerous for good or evil,” but they can have huge effects.

Second, it’s a corrective against American hubris. We still tend, far too often, to imagine that we can shape the world as we like. But those days are long gone, if they ever existed. Hyperglobalization was made in Beijing, New Delhi and Mexico City, not in D.C.

Bar Ran Dun
Jan 21, 2006

When there were five in the bed and we all rolled over I said nothing, because I would not fall off.

Been commenting on all this in CSPAM for a while gunna cross post the stuff that might be relevant. Will be a couple of posts:

Bar Ran Dun posted:

it’s also that international container shipping cartel’ed up and most of the big lines jointly reduced capacity to bring rates up in response to the Covid drop off. they had been caught up in nasty feedback loop that kept prices low for a long time.

absurdly cheap intl container freight was always going to end eventually. it would have been bad if there would have abrupt line failures, but eventually it would have been a similar state to what’s happened now.

Bar Ran Dun posted:

lol,

so the lines reduced capacity by laying up smaller ships. the smaller ships did the Asia-> west coast-> east coast -> Europe-> east coast -> west coast -> Asia. think a big ole horseshoe. the biggest ships just go Asia to LA.

so this fucks European supply chains more than us ones by raising the freight from Asia to Europe. long term that gap is real bad for Europe, especially Germany I think.

edit and that’s a huge gap.

Bar Ran Dun posted:

the marine underwriters were having a bad year already. I mean there have been multiple very large losses of on deck containers on several vessels in the last six months.

the claims industry is uh having a good year.

Bar Ran Dun posted:

Global supply chains are going to be less competitive going forward. The container lines are pulling it in hand over fist now. The cheap container freight party is over.

Bar Ran Dun posted:

it’s not just the db order book it’s all ship category order books.

it means the feed back loops that were driving down freight rates in several categories have stopped driving new builds. it means the ship owners think there will be less international trade in the future. that or they intend to go the route the container lines did and pulling back jointly to raise rates.

basically bulk freight rates are probably going to rise and operators are going to be more profitable.

Bar Ran Dun posted:

the end goal of supply chain management is for what we buy at the final point of sale to be able predict future needs all the way back to the base raw materials being dug out of the ground. then to maximize the whole chain for shareholder profit.

Bar Ran Dun posted:

lol of course. love finding out that people reached the correct conclusion (that controls were necessary to prevent collapse) over a decade before I was born and chose the status quo.

Delay terms are what’s happening. looking at the critiques of the model , the only really valid one I saw was substitution, that we would find new resources to substitute as old ones ran out. the critiques seem to suggest that would stop collapse. no it would just slow it down a bit. another thing slowing it down would be efficiency we have gotten way more efficient. we get way more out of infrastructure than we do in the seventies. the economies of scale are much much greater than in the seventies. but again that would only be a delay.

think about it this way. the SS Kauai is a steamship built in 1980. it’s 1626 TEU. The MV HMM Algeciras was built in April 2020 23,964 TEU. Kauai would have more crew. Fuel consumption is probably comparable, Kauai might even be worse because it’s a steam plant.

Bar Ran Dun
Jan 21, 2006

When there were five in the bed and we all rolled over I said nothing, because I would not fall off.

Bar Ran Dun posted:

employees were just another inventory to reduce, whoops

Bar Ran Dun posted:

lol

I’m looking at estimates that are $100,000 dollars higher from two months ago for some industrial machinery. like a 20% increase in two months, with a that’s only good for a week warning.

Bar Ran Dun posted:

“SHIP ORDERS SURGE AS CARRIERS RUSH TO ADD CAPACITY
Global shipyards that were retrenching and consolidating in a faltering maritime market barely more than a year ago are now flush with new orders, boosted by efforts by shipping lines to add capacity to meet resurgent consumer demand in Western economies.
Orders for new container ships in the first five months of this year were nearly double the orders for all of both 2019 and 2020, according to London-based maritime data provider VesselsValue Ltd., with the biggest gains going to shipyards in South Korea and China.
The order tally has been so strong that some yards have stopped giving quotes for new vessels and are trying to renegotiate existing orders for more than 20 ships as the price of steel plates used to build vessels has doubled since the end of 2020, according to people involved in those deals.
The resurgence in ordering is being driven mainly by container ships as Western retailers such as Walmart Inc. and Amazon.com Inc. scramble to restock after a year of supply-chain disruptions from the coronavirus pandemic.
The rush to replenish depleted inventories, along with congestion at major ports in North America, Europe and Asia, has left cargo space hard to find and sent freight rates soaring. That has spurred big profit gains at operators like A.P. Moller-Maersk, CMA CGM and Hapag-Lloyd , as well as triggered moves to renew and expand their fleets.
The strong orders are in contrast with the past couple of years, when a long downturn in maritime trade left a dwindling backlog of orders at shipyards and forced some to consolidate.
“It’s been our busiest period in years and it’s very much about container ships,” said a senior executive of South Korea’s Hyundai Heavy Industries Co., the world’s biggest shipbuilding facility in terms of capacity. “The orders are mostly for bigger ships with all the extras to emit less, which is good for margins. We are almost out of slots to build new ships until late 2023.”
“I’ve never seen such demand in 20 years,” this executive said.
South Korea’s three big yards - Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. - account for more than a third of all shipbuilding orders for all types of vessels. The other shipyards with big shares of global orders are China State Shipbuilding Corp., China Shipbuilding Industry Corp. and Japan’s Imabari Shipbuilding Co.
In the first five months of this year, 208 container ships worth $16.3 billion were added to the global order book, compared with 120 ships valued at $8.8 billion for all of last year and 114 vessels worth $6.9 billion in 2019, according to VesselsValue.
The South Korean shipyard executive said the boxship orders are mainly for vessels that can move around 14,500 containers and behemoths with a capacity of more than 20,000 boxes that are mainly deployed on Asia-Europe trade lanes. (The Wall Street Journal, 6/8/2021)”


lmao

Bar Ran Dun posted:

this will not happen quickly. ships take a long time to build. so that means years and years until capacity gets back to where it was.

it also means they broke ranks and eventually they’ll go back to what was happening before the pandemic. just that’ll be years from now...

Bar Ran Dun posted:

LINER CONGESTION SPREADS ACROSS THE PLANET, 304 SHIPS QUEUING FOR BERTH SPACE
The ebb and flow of record global liner congestion is neatly encapsulated in two maps provided below from Seaexplorer, a container shipping platform created by logistics giant Kuehne+Nagel.
As of 3.30 pm Singapore time today there were 304 ships idle in front of ports around the world waiting for berth space to open up. Seaexplorer data shows there are 101 ports reporting disruption such as congestion. Officials at the Kuehne+Nagel digital offshoot report the number of ships forming queues hit 350 in the middle of this week before falling back to 304, the same level as this time last week (see lower map). Red dots in the enlargeable maps represent clusters of ships while orange ones mark out ports that are congested or suffering from disrupted operations.
The clear change over the past week is how the congestion, so visible in recent weeks in south China, a key export area hit by a Covid-19 outbreak, is now spreading to other important hubs. Singapore, for instance, has seen the number of boxships waiting for berth space increase by 37.5% over the past week, while intra-Asia hubs such as Laem Chabang are now reporting tailbacks and in the US, east coast ports are suffering all manner of disruptions.
While last week, boxships queueing in Chinese waters made up more than 50% of the global total, this has dropped today to less than 40% indicating the growing global congestion contagion.
Terminals are becoming global bottlenecks, be it at berths, yards or gating out cargo.
Maersk, the world’s largest container line, in a post from earlier this week discussed the stretched nature of global supply chains, something it warned was now the new normal.
“The trend is worrying, and unceasing congestion is becoming a global problem. Due to Covid-19 and a significant volume push since the end of last year, terminals are becoming global bottlenecks, be it at berths, yards or gating out cargo, and it’s continuing throughout the logistics chain – in the warehouses, the distribution centers – with numbers on the rise,” Maersk stated.
Splash reported yesterday how the partial shutdown of Yantian Port following a Covid-19 outbreak late last month is now on track to affect twice as many containers as were impacted during March’s high-profile blockage of the Suez Canal. (Splash 24/7.com, 6/18/2021)

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Bar Ran Dun
Jan 21, 2006

When there were five in the bed and we all rolled over I said nothing, because I would not fall off.

Bar Ran Dun posted:

The skyrocketing price of shipping goods across the globe may hit your pocketbook sooner than you think - from that cup of coffee you get each morning to the toys you were thinking of buying your kids.
Transporting a 40-foot steel container of cargo by sea from Shanghai to Rotterdam now costs a record $10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping. With upwards of 80% of all goods trade transported by sea, freight-cost surges are threatening to boost the price of everything from toys, furniture and car parts to coffee, sugar and anchovies, compounding concerns in global markets already bracing for accelerating inflation.
“In 40 years in toy retailing I have never known such challenging conditions from the point of view of pricing,” Gary Grant, the founder and executive chairman of the U.K. toy shop The Entertainer, said in a interview. He has had to stop importing giant teddy bears from China because their retail price would have had to double to add in higher freight costs. “Will this have an impact on retail prices? My answer has to be yes.”
A confluence of factors - soaring demand, a shortage of containers, saturated ports and too few ships and dock workers - have contributed to the squeeze on transportation capacity on every freight path. Recent Covid outbreaks in Asian export hubs like China have made matters worse. The pain is most acutely felt on longer-distance routes, making shipping from Shanghai to Rotterdam 67% more expensive than to the U.S. West Coast, for instance.
Often dismissed as having an insignificant impact on inflation because they were a tiny part of the overall expense, rising shipping costs are now forcing some economists to pay them a bit more attention. Although still seen as a relatively minor input, HSBC Holdings Plc estimates that a 205% increase in container shipping costs over the past year could raise euro-area producer prices by as much as 2%.
Central bankers have so far been sanguine about the phenomenon, arguing that the rise in consumer prices tied to supply hiccups won’t last. European Central Bank President Christine Lagarde said on June 10 that while supply-chain bottlenecks would push up production prices and the headline inflation rate is expected to rise further in the second half of this year, the effect will fade.
Several factors explain the relative lack of concern. Shipping costs only constitute a small fraction of the final price of a manufactured good, with economists at Goldman Sachs Group Inc. estimating in March - when China-Europe rates were about half of current levels - that internationally they made up less than 1%.

To top that, companies have annual contracts with the container lines, so the prices they’ve locked in are considerably lower than the headline-grabbing spot rates. Although the latest round of contract negotiations in May reflected the stronger spot market, HSBC trade economist Shanella Rajanayagam said that “the longer-term rates are much much lower than the spot rates, even if they are feeding through.”
With the end of lockdowns consumer demand is likely to shift to services from goods, but “the risk of course is that higher shipping costs persist - especially given ongoing shipping disruption - and that producers become more willing to pass these higher costs on to consumers,” Rajanayagam said.
While many economists note that even a full pass-through of higher shipping fares to consumers will have a marginal effect on headline inflation, Volker Wieland, a professor of economics at the Goethe University in Frankfurt and a member of the German government’s council of economic advisers, warns that they might not be sufficiently factored in.
“Even if the order of magnitude is smaller than estimated, the dynamic builds over a year and has significant effects,” he said. “That means there’s a danger we’re underestimating the impact.” (Bloomberg, 6/14/2021)

Bar Ran Dun posted:

RETAILER HOME DEPOT CHARTERS BOXSHIP TO MAINTAIN SUPPLY CHAIN
After months of reports of capacity and equipment shortages highlighting the challenges retailers are having getting merchandise to their stores, one of the largest big-box stores in North America, Home Depot, has taken the extraordinary step of chartering a containership to maintain its supply chain. It is the first time in the company’s 40-year history that it has gone to such extremes to fill its shelves.
The home improvement’ retailer ranks as one of the largest importers. With nearly 2,300 stores in the U.S., Canada, and Mexico, Home Depot generated over $132 billion in revenues in 2020. The home improvement sector continues to be one of the hottest segments, with consumers deciding to make changes as they spent months at home during the pandemic.
With sales rising over 30 percent in the first quarter of 2021, Home Depot has a voracious appetite for merchandise to keep its stores and warehouses full. Each store stocks approximately 35,000 products, the company reports, with a total of more than one million items listed in its online store.
President and Chief Operating Officer Ted Decker told CNBC that the company has already taken usual steps to maintain its merchandise inventories and get products on the shelves during the disruptions to the global supply chain. He said Home Depot has purchased merchandise at higher costs in the open market beyond its contracted suppliers. The company has even resorted to flying smaller, higher value items, such as power tools and electrical components, by air freight to make up for shortfalls in supply.
Describing the company’s latest efforts to maintain its supply lines, Decker told CNBC, “We have a ship that’s solely going to be ours, and it’s just going to go back and forth with 100 percent dedicated to Home Depot.” He did not identify the size of the boxship or which carrier they are chartering the vessel from, nor the length of the charter. He said it would start running next month, but did not specify which routes or ports.
Last week, the National Retail Federation forecast that the U.S.’s major ports were on track for record volumes in 2021 driven in large part by retail merchandise imports. The NRF in its monthly Global Port Tracker projected that container volume would remain above 2020 levels at least until the fall but might see a slight decline in volumes versus 2020 before retailers begin stocking up for the holiday retailer season. (Maritime Executive, 6/15/2021)

Bar Ran Dun posted:

Hapag Lloyd just ordered 6 ultra large containerships.

Bar Ran Dun posted:

a business is a system designed to poo poo out whatever widget or service from its inputs to be turned into money (or a system designed to just Hoover up money). a business is a loop to repeat the same task over and over again.

and this is capitalism it is modernity tied up with the roots of the the industrial revolution.

Bar Ran Dun posted:

Home Depot is literally chartering their own containership because the container lines service is so bad now.

i don’t think another company is going to that extreme.

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