An anonymous worker from the West Coast Port of Los Angeles came forward on “The Stew Peters Show” to discuss the claimed issues around the cargo ship backlogs. {Direct Rumble Link} As the port worker noted, based on his 18-years working there, there is no supply disruption on the unloading end of the supply chain; though they are a little backed-up, but the port is offloading at a high capacity.
The interview is interesting because the ground report contradicts the popular narrative about COVID impacts on the current supply chain. There are ample goods flowing into the supply chain from the ports, yet there are claims of shortages at the warehouse and distribution level. WATCH
Stew Peters accurately reminds his audience that no nation generates and exports as much raw material foodstuff as the United States. This is a key point seemingly overlooked by most media. The U.S. exports around $73 billion in food products annually. The next closest food export nation Germany isn’t even close at $34 billion.
In very general terms, about one-third of U.S. food exports are North/Central America (Canada, Mexico, etc) exports; approximately one-third go west (Asia) and about one-third go east (Europe). There have been no reported issues with those shipments departing the U.S.
However, one point worth noting, by the LA dock worker, is the influence of predictive orders or automated-purchases based on historic norms and patterns. I think that overheard note by the worker was somewhat misconstrued, and a correct interpretation could explain part of the backlog of container vessels offshore.
It is technically correct that large multinational importers use AI (artificial intelligence) to predict orders. However, it’s not something weird or as complex as it sounds. As supply chains have optimized computer assisted ordering has become the norm, you might have heard it referenced as ‘automated replenishment’.
Essentially, decades of manufacturer, retail or consumer scan data for all kinds of goods create a historic reference point for inventory needs. Large retailers use automated ordering to restock their warehouses with raw materials, interim assembly products (parts), and also finished goods. Prior sales data helps to determine or predict future ordering needs.
The advent of technology tracking has thinned the supply chain to a process of ‘just-in-time’ replenishment. This is JIT inventory management and now how most companies operate. The goal for Just In Time (JIT) inventory is for the new stuff to arrive just as the last of the old stuff is distributed or sold. This means you don’t have to carry excess inventory or tie up money in material waiting for consumer sales or manufacturing use.
AI automated purchasing is just a larger scale version of JIT. People involved in the supply chains and logistics simply facilitate and tweek the arrival/departure times by coordinating with suppliers and distribution on a frequency schedule. You watch the supply chain and make requests for slight modifications as you take daily use or sales information into account.
It’s not totally or fully automated; it’s more akin to computer assisted depending on the type of product being managed. However, it does become more automated every year, and there are less and less people who remember the olden ways of making predictive purchases/orders with human brain power instead of computer assistance.
That said….. Think about the economy suddenly grinding to a halt. Which, we will remind people, CTH said happened quietly at the end of May of this year.
April and May of this year was when the first batch of stunningly fast inflation prices on food, energy and gasoline hit the checkbook of working-class Americans like a thundershock. At the end of May and beginning of June the data was clear. We were seeing our first double digit inflation months in recent memory.
So, think about the impact of that massive first round of Biden inflation hitting the wages of 70% of American workers all at once. Spending priorities immediately change. Disposable income immediately shrinks. Consumer purchasing patterns immediately shift.
The consumer impact is sudden. However, the supply chain impact is more akin to slowing down a freight train with thousands of boxcars. It takes time.
What I would say, based on my experience in overlay with the conversation with the dock worker (Stew Peter interview), is that many of those off shore container vessels are full of goods that have already slowed at the consumption end. People have stopped buying some stuff, some types of goods, and those ships are carrying cargo that is no longer needed within the supply chain…. at least not at the rate within the automated replenishment system.
Part of the reason for the excessive container ships could simply be a reflection of a U.S. economy that has slowed so drastically that inbound durable goods are not needed by those on the destination side. As a consequence, there’s no rush for the importing corporation to take immediate control of the inventory.
This outlook would also explain why the worker was saying some of the delivery containers are just being stored full of goods without being distributed; and why the executives within the LA port were leasing additional storage space to house containers that were in no hurry to get picked up.
Back when import wholesalers were more important because they distributed to a larger population of smaller retailers, when this type of a scenario unfolded the importers then begin prioritizing durable good cargo that was needed more urgently, and they delayed the off-loading of durable good cargo that was less urgent. In modern days, there are less ‘wholesalers’ because small retailers have been replaced by massive multinational corporations and giant box stores. Those big corporations have their own in-house purchasing, supply chain and inventory management specialists.
[Note: Perishable cargo and fuel oil always get a priority offload regardless when they arrive in the port system.]
I can make a few calls and trace this down, but I suspect that’s essentially what is driving a significant portion of this backlog of cargo container ships that are not in a hurry to offload. Keep in mind, with Joe Biden inflation going bananas, that durable good inventory is going up in value even as it sits there idle. So unlike times when purchasing agents desperately need to turn the merchandise to get their profit, an increasing static inventory valuation simply becomes another reason for a multinational to be okay with any port delay.
If my suspicions are correct, that also means the U.S. economy is in much worse shape than financial media are reporting… another reason for the media to avoid telling the story of cargo vessels and instead deflect the story to imaginary COVID-19 supply chain disruptions. So there’s that.
So how do you explain widespread reports of grocery stores and the like with empty shelves?
Same way your explain those grocery stores that are currently fully stocked.
Look in the background of where you do your grocery shopping, meaning the ideology of the parent corporation that runs the supply chain, and you will discover whether they are a grocer or a multinational corporation maximizing profit.
Supply chains are built upon human relationships just like all other facets of life. If you are buying groceries from a company with a commitment to their customers and a history of great relationships in their buying offices, you will not find any issues in their stocked shelves.
If however, you are buying groceries from a massive multinational corporation who has, for the sake of profit, switched their entire supply chain to an automated or computerized replenishment system; and who use their scale of purchasing to bully the downstream supplier into compliance and low cost or else; you will find those shelves lacking inventory.
It really is that simple.
Costco has been out of frozen chicken thighs for months. They come from a multinational, Tyson I believe.
Costco has fresh chicken thighs, they process it in their own warehouse.
Both are sourced in the USA.
I have absolutely seen this in my small town. Our local grocery store is fully stocked with groceries, meats, produce, and paper goods. Meanwhile thirty miles away wal-mart has
near empty meat cases, and canned food spread out six cans wide trying to give the appearance of full shelves.
Notice multinational grocers are never out of junk food and the quality of paper products has changed VS price.
I had not made that connection, but You are right. Walmart had lots of junk food Pepsi and such. Just not a lot of meats especially chicken or canned vegetables. Weird isn’t it.
When I go shopping, it’s always 90% for grocery replenishment. I know exactly what I want and I’m not an aisle stroller.
The problems started this early summer. I was so angry and disappointed because, on a scale of 5, three out of 5 items I needed were out of stock. At times, I would replace with another brand but in lesser quantity. Up till now, the situation can last for weeks at a time.
Also, the sudden price hike has taken many of us by surprise. So, there again, I replace it with a smaller format or in lesser quantities of another brand. And then, suddenly, my usual brand is stocked but it’s more expensive. Some five weeks later, my usual brand goes on sale and it’s back to its normal price, the same price I paid for many years.
CTH: Thank you for explaining what is happening behind the curtain. I don’t comment very often here but I do read every post.
Covid lockdowns, then Bidan, have almost completely decimated face-to-face commerce and the mainstreet economy.
In some cities, its complete. The BLM/Democrat/Covid lockdown hotspots. San Francisco and New York especially.
Funnily enough, Amazon and Whole Foods warehouse same day delivery services are springing up everywhere, what a shock.
Huge Amazon, brand new, warehouse just south of here, now they are trying to staff it. 3.84 million square feet.
It’s a big club………….
If you are referring to Pierce county here in Washington state it’s not to far from me.
They want people to go there and pick up their own orders.
And yes, it is huge!
Same here in my area. The price of houses has skyrocketed.
I just spoke to a friend that does 100 loads a day via truck from the port. He said that the slow down has to do with the new Union Contract being negotiated in the next couple months. The union wants to flex their power on getting wage increases. I think this is more what is it it’s all about and that the politics are happy to go with it.
I heard from a separate source it’s taking eight days to process a ship instead of two days so it goes along with this. Slow downs on purpose has nothing to do with inventory levels.
Inventory levels are involved. When grocery retailers run out of specific flavors of carbonated water of a particular brand for weeks on end, this is an inventory issue.
We live near Interstate 81 in South Central PA. Huge trucking hub and constant truck traffic.
It seems there are a LARGER amount of tractor trailers on the road lately and the hubs are hopping.
I watched the video and am not so sure about some of the theories. The one theory was that the Biden regime is using these mandates to get rid of longshoremen so they can replace them with AI. The day that AI can replace longshoremen they will be replaced – there will be no excuse needed to do it.
Also there can be no denying that there has been major disruptions at the ports. You only need to go on ship tracking websites to see the dozens of container ship anchored off of the ports. This is not normal. As for JIT it has been around for decades. It was pioneered by the auto companies going back to the 80’s.
AI robots can make burgers and then send them to the robot burger-chef in a restaurant that then flips them and inserts them in buns with required embellishments and then passes them off to another robot that brings them to the customer’s table. Do you really think longshoremen can’t be replaced?
The crude oil shipping industry has been doing this for many decades. The container ships have become storage facilities which can be moved towards higher demand and higher prices.
it’s a repeat of the “Lumber Shortage” to wit we pulled through. Phase 2 can be overcome as well. Don’t let them take our Country down. It’s all Smoke and Mirrors, policies that are not laws, etc.
Here is a left field comment:
I accidentally stumbled into an open Mike podcast (@at 4:oo am) and became fascinated with the thoughts of people calling in.
Two things stood out,
It was stated that ports in China are looking like Long Beach.
A retired military officer mentioned something more sinister he said rumors afloat of a ‘broken arrow’ situation so every vessel & container is being searched.
Another (again military) said a destroyer is deployed in the area and is keeping watch on the container vessels.
I’m not attempting to plant a new conspiracy, but we are living in a country that is maiming our military with a toxic trial vaccine. Eighty percent of our navy
has now been dosed and the Navy will be needed if China advances further on Taiwan?
Will they be able bodied?
Military Times says all but 7000 sailors are jabbed. Hubby is holding out
TIme to stock up on basics for the next two months….then STOP BUYING for two months…..then the GREEDY suppliers of everything will get busy producing so they can get $$$ again.
TIme for Consumers to Strike
Don’t forget, the suppliers of shipping containers are charging 4X times more for a container than a year ago. The ports are charging an extra $800$ per day for unloaded containers on their property. Take a guess who has the most shipping containers in the world by far – Communist China. They don’t want this to stop, they are prolonging it to try and make up for the Trump tariffs that cost their commie asses billions.
You see, commies sometimes cheat, sometimes they even lie, and sometimes they even kill millions of people.
Its how commies roll.
Don’t forget the cost of gasoline makes everything go up. If it doesn’t get there by truck, it doesn’t get there!
At least in the Hawaii trade (by law must be US built/US flagged/US crewed) I don’t see any issues.
There is not a nicer place in the world. Don’t go anywhere, once you get here.
I’m in retail. We will be out of items for about 2-3 weeks at a time (different departments/manufacturers, whether it be plastics, pet food, etc) , then replenished. This is logical with companies that have a Covid hit (whether real or they make everyone go home for two weeks). We have also been short drivers for over a year, which has caused up to 10 days of a delay from OUR warehouse. Why work when you can collect unemployment?
I believe both of these scenarios are affecting the supply chain among others. We are a billion dollar company, with a fair amount of buying power, but not as much as Walmart. Good business owners would try and keep all their customers as well taken care of as possible, others will service their largest customer first and let the chips fall. That’s the reality.
We live rurally in Florida, and although we have seen shortages, we have never seen empty supermarket shelves (except for hurricans). Is that an urban thing?
“… others will service their largest customer first and let the chips fall. ”
That’s one of the first things I noticed about the empty shelves. I wasn’t seeing the generic, low-priced off-brands replenished for weeks on-end, while the expensive name brands stayed fully stocked.
What about the talk that China (insert DJT way of saying it ) has bought, owns, and runs most larger ports ? True ? Relevant ?
What if…
(idk, but I wouldn’t rule it out)
Hope the ports aren’t full of Trojan horses.
it’s the plan. the build back better plan. destroy everything so dems can create the country THEY want. the more i think about it the more i think covid was released at just the right time for democrats. far enough away from the 2020 election but close enough for the 2020 election. mail in ballots are their future. 2 million illegals this year plus mail in ballots they have elections all wrapped up. they probably told all these illegals they must vote in every election or they will be deported by republicans.
Another explanation
https://geopoliticalfutures.com/explanations-for-the-labor-shortage/
Remember when we were told America was converting from a manufacturing economy to a service economy? We had no idea they were actually talking about people quitting their jobs, remote learning, Universal Basic Income, and groceries delivered to your door. But here we are. Logically thinking, this new normal is unsustainable without rationing goods and services. This is just the beginning.
Pay-By-Scan is one of the ways micro inventories (the big-box stores) keep from having to invest in all that inventory. They don’t “pay” for your widget until that widget is scanned on checkout. Then the real magic kicks in… whatever the retailer and the supplier had previously agreed to amount – plus shipping – is part of your price at checkout. The amount above that fixed price is the retailers’ cut. HOWEVER… if widget A is not selling, and widget B is flying off the shelves, then the inventory management systems automatically discount the widget A, even below the already fixed price to the supplier, taking a hit on each scan, and the retailer puts widget A on a big “SALE!” while allowing more space for the hotter item widget B. The bean counters still make money, and both the suppliers and retailers are making money.
NOW… take that same Pay-By-Scan system concept, and apply it to the macro of inventories: entire warehouses. Even floating warehouses. Yes. Each container’s contents are tracked to the nth and iota. Each vessel is the same. Everything is tracked. The smart money is they are waiting for the optimum prices. In order to get the optimum prices, demand MUST be larger than supply. The waiting, floating warehouses are simply inline for an apparent skyrocketing demand.
Somebody. Somewhere. Is betting on making a killing.
FYI it is estimated that there are almost 1 million TEUs (“Twentyfoot Equivalent Units” the length of a container) sitting off the CA coast – and by the time the rest of the west coast and east coast is added, probably double that. The enormity of that bet – and IMO the suppliers are “betting” on drastic shortages to spike the market prices – is staggering. The average commodity cost of one TEU is approximately the same as a standard 18-wheeler tractor trailer. About $100,000. so… times 1 million TEUs “parked” off our coasts. That’s about 100 Billion in goods. Oh wait… remember, if there is no shortages, those ships can simply “lose” a few to the deep. Yup.
from last month:
https://www.freightwaves.com/news/just-how-many-containers-of-cargo-are-stuck-off-californias-coast