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Chinese New Year to Cause Worsening Shipping Delays

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The Chinese New Year is earlier than the previous five years, causing some shipping companies to suspend services ahead of their new year, further straining global supply chains. The potential for supply chain disruption in 2022 is exacerbated by two key factors: China’s new year falling on the first of February, and their strict zero-Covid policy, which has already created problems for sailors who are forced into quarantine for extended periods of time. As a result, China’s southern manufacturing hub is starting to feel the effects of 7-week (and sometimes longer) quarantines. An article by Insider reports on the details behind China’s effects on the global supply chain.

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North America’s Largest Railroad May Go On Strike

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Further supply chain disruptions are currently in the making as railroad giant Burlington Northern and Santa Fe Railway (BNSF) plans to unveil a new attendance incentive program that may cause over 35,000 employees to go on strike as soon as February 1st, 2022. BNSF is asking a federal court to classify the railroad’s dispute with two rail unions over a new company attendance policy as a “minor dispute,” which would inhibit the unions from striking. The unions strongly disagree that this is a “minor dispute”, specifically citing that the attendance program penalizes employees for time taken off for any reason, including leaves for disabilities and pregnancies. BNSF warned that if union members went on strike, it would not only potentially result in immediate, substantial and lasting disruptions to the railroad’s schedules, but it would affect the traffic of its interchange partners as well. “Because of the scope of BNSF’s operations, even a partial or temporary shutdown would have a drastic impact on large segments of the public and the national economy. Thus, any strike… has the potential to interfere with the nationwide transportation in interstate and international commerce,” stated attorneys representing BNSF. To learn more about this potential supply chain disruption, read the article published by Freight Waves by clicking the link below.

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Hurricane Ida Weighs on Chemical Production

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As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. The chemistry industry is one of the largest industries in the United States, with lingering hurricanes and other supply chain disruptions, the largest decline in chemical production from July to October was in the Gulf Coast region. In fact, chemical output declined in all regions within that time period except for the Northeast. An article by the American Chemistry Council examines chemical production for the past four months.

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Wholesale Prices Increase at Record Pace

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Supply chain bottlenecks and surging demand have been the primary drivers of inflation. Wholesale prices have increased at a record pace this past November, according to the Labor Department, indicating the inflation pressures in the post-covid economy are persisting. Consumer pricing is increasing at its fastest pace in nearly 40 years, with the demand for goods being the biggest driving force behind producer price increases as the world struggles to catch up with their supply and demand. Federal Reserve officials have been insisting that inflation is “transitory” and closely associated with pandemic-related factors that would eventually become irrelevant. However, Chairman Jerome Powell, along with other officials, has recanted their initial statement about current inflation being “transitory”. A recent article published by CNBC breaks down the numbers in greater detail.

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California’s Executive Order to Alleviate Port Congestion

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California Governor Gavin Newsom issued an executive order on October 20th, 2021, effective immediately, directing state agencies to locate federal and private land for short-term container storage while identifying freight routes for trucks. The port of Los Angeles and Long Beach alone move roughly 35% of all containers in the United States, both imports and exports. The executive order comes after hundreds of cargo ships have been stuck off of the California coast in recent months, with as many as 65 ships at anchor, with an estimated 200,000 containers still stuck at sea, waiting to dock. The executive order also encompasses solutions for the driver shortage faced by many trucking companies around the nation. An article published by CNN reveals an in-depth look at California’s new plan to relieve its port congestion.

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