Shortages, Freight, Shipping and the Medium Term

[isha]

Recently I have been hearing here and there about shortages of products.

Personally I experienced difficulties getting supplies of random things over the past year or so for a place I was working, and I have heard people working in shops saying they have had to substitute inventory. This would/could be expected with production lines being repurposed for 'covid' related items, like PPE etc.

There seems to be a variety of different factors, eg Brexit difficulties, shortage of truck drivers, ports being closed, isolation and quarantine requirements. Likely other issues I do not know about.

This was a very interesting Twitter thread I read about freight, shipping and supply shortages to come. Prior to reading it I had already made up a list of stuff I have planned to order in advance so that I can hopefully avoid any shortages or delays over Winter. Having read it I am even more determined to make preparations in my own modest way for things I need or like to have in stock.

Anyone else think this might be, has been, is or will be an issue?

https://threadreaderapp.com/thread/1430 ... 00262.html

Here is a bit of mad info from the thread-

Before I get into what it means for non-freight-folks, here's how much it costs to ship a 40' container from China to the United States:

August 2019: $1,326

August 2020: $3,224

August 2021: $18,425

Why are prices rising so much?

Lots of reasons. Roving COVID port shutdowns, people buying stuff instead of services, the Ever Given/Suez Canal fallout, passenger flight cancellations and all the right containers in all the wrong places turned global freight into a shipstorm.

[Scotty]

I usually bring in 2-5 40ft containers a year from China. Stainless steel catering and hygiene products. I've always been in the hand wash equipment business so covid has not hurt me financially at all, quite the opposite.

Containers would usually have cost about €2,200 to €2,800.

I went to book one in January and was shocked to be quoted over $6,000! I was assured it was temporary and after the Chinese New Year things would return to normal. I waited. In March I was quoted $8,500, a few weeks later $15,000. I decided to book and was told that the container would not leave until the end of June and prices were subject to change even AFTER departure. That container was cancelled by the shipper due to port closure due to covid.

The next quote I received, early July, was for $24,000 and again, subject to change after departure.

After a lot of enquiries eventually got a small broker to ship it for me for $18,000.

I've 1500 stainless steel hand basins on board at $16 each. Shipping has gone from less than $1.60 each to $12 each which of course means a hefty price hike for my customers and it'll be the same with all my other products.

I spoke with a colleague of mine recently who has put his prices up 25% across the board. I asked him did he think he'd lose much business over it and he said in a few months it won't matter about the prices as you simply won't be able to get the stuff. I've several UK suppliers who simply won't deal with me anymore because they're not willing to go through all the red tape that comes with Brexit.

I've always brought stuff in from Italy and Spain too so it's to there I'll be turning until China calms back down.

Expect many more price increases before the end of the year.

PS: I predict Christmas decorations/lights are going to be like gold dust this year and very expensive if you can find them

[Del.Monte]

Not wanting to row with you and I wish you well in your business dealings but I wouldn't buy as much as a bag of rice from China. Can you not source your requirements in the UK?

[Scotty]

Can you not source your requirements in the UK?

Yes, but...

1. It'll be 4 times the price.
2. Will probably have come from China anyway.

I've bought a lot of stuff from Italy and the UK over the years only to find it's the very same stuff I've bought from China. It's often not even re-boxed.

It's only the cheaper products that we buy from China, high end stuff still comes from UK and Italy.

[CelticRambler]

Not wanting to row with you and I wish you well in your business dealings but I wouldn't buy as much as a bag of rice from China. Can you not source your requirements in the UK?

Can't speak on Scotty's behalf (EDIT especially as he's done it himself while I've been writing!) but the simple answer post-Brexit is "probably not". The UK is, to all intents and purposes, on the same level now as China, but - as Scotty has pointed out - without the benefit of having years of experience dealing with the administrative implications of exporting to a global market.

The latest fiasco surrounding the UKCA "quality" mark is a perfect example of that. A Chinese company will have all the necessary processes in place to get their product a CE mark, and voilà, immediate entry to the 450-million EU+NI Single Market plus the 60-million GB market (and to the other blocs that accept a CE mark as good enough for their region). A UK company has to try to find a lab that'll give them a UKCA mark so they can sell to their own people (not including NI, coz they're not real British ) and also look for CE approval for customers that are furiously looking for alternative EU - or Chinese - suppliers. They're in a no-win situation.

[Scotty]

Don't get me started on the CE mark, not to be confused with the "China Export" mark, which is almost identical. The CE mark is the greatest load of bullshit the EU has ever come up with, well.... 2nd greatest, cookie warnings being the greatest!

Allowing Chinese (or any) companies to self declare their products as safe is lunacy.

[CelticRambler]

There seems to be a variety of different factors, eg Brexit difficulties, shortage of truck drivers, ports being closed, isolation and quarantine requirements. Likely other issues I do not know about.

There's another major issue that's not on that list, and that's the effect of climate change on US infrastructure. We don't get to hear much about it on this side of the Atlantic, but the amount of flood, fire, storm, and other "weather" damage to the physical fabric of the man-made US landscape is enormous, and the repair & reconstruction of houses, schools, churches and commercial property, as well as roads, cables and pipelines is sucking up huge amounts of raw materials - much imported from China - and the associated transport logistics.

I happen to think that this is, over all, a Good Thing - because it's reducing the price differential between stuff produced on the far side of the world with slave labour with no particular respect for the natural environment and more reasonably-made products coming from closer to home. Whether or not the effect lasts beyond the next year or two remains to be seen, but I think that this is probably quite a good time to Europeans to invest in relatively small manufacturing facilities, especially of the kind that can be quickly re-tooled to produce new/alternative goods.

[CelticRambler]

Don't get me started on the CE mark, not to be confused with the "China Export" mark, which is almost identical.

Ah now - don't get me started on that "China Export" mark nonsense. There is no "China Export" mark, never was, never will be.

There are only badly faked CE marks.

[isha]

Not wanting to row with you and I wish you well in your business dealings but I wouldn't buy as much as a bag of rice from China. Can you not source your requirements in the UK?

I did not say where I was sourcing stuff. The shipping lines are being affected in general, not just from China. It is not just shipping lines anyway, in the UK McDonalds has run out of products (not that I care about that, it is just an indicator) and so have other places due to staff shortages and staff quarantining etc.
And as for stuff from China being not kosher, I wonder where you source your tea, bananas, sugar, chocolate, almonds, avocados, coffee, mobile phone, computer products, PPE, garden furniture, jeans, etc? Do you trace back all individual ingredients and processes that go into the construction of every item to make sure they do not lead to some suspect source? I know it is rotten (frankly) that we are complicit in this crappy globalist supply chain built on slavery and suffering but unfortunately it is pretty fecken unavoidable to not be tainted unless one wants to live like a Jain monk.

I have put in orders of stuff anyway in various online outlets. Very little of it ''comes from China''. I get a lot of herbs, supplements, domestic and cosmetic products and essential oils in Ireland and UK. I buy bulk flour from Irish mills, and bulk food products from Irish online stores - but of course they may have gotten some of the original products from CHINA !! I have been having trouble recently with delivery from Baldwins herbal pharmacy in the UK - loads of stuff is getting turned back they have told me, for lots of customers in Ireland, for whatever reason. I do also buy things on Amazon and support Jeff Bezos, how dreadful of me! It is a very functional site. As they say, bite me

[isha]

There's another major issue that's not on that list, and that's the effect of climate change on US infrastructure. We don't get to hear much about it on this side of the Atlantic, but the amount of flood, fire, storm, and other "weather" damage to the physical fabric of the man-made US landscape is enormous, and the repair & reconstruction of houses, schools, churches and commercial property, as well as roads, cables and pipelines is sucking up huge amounts of raw materials - much imported from China - and the associated transport logistics.

I happen to think that this is, over all, a Good Thing - because it's reducing the price differential between stuff produced on the far side of the world with slave labour with no particular respect for the natural environment and more reasonably-made products coming from closer to home. Whether or not the effect lasts beyond the next year or two remains to be seen, but I think that this is probably quite a good time to Europeans to invest in relatively small manufacturing facilities, especially of the kind that can be quickly re-tooled to produce new/alternative goods.

I saw in that thread I linked in the OP that Timber has increased by 55% in price since 2019. That is enormous.

[isha]

I usually bring in 2-5 40ft containers a year from China. Stainless steel catering and hygiene products. I've always been in the hand wash equipment business so covid has not hurt me financially at all, quite the opposite.

Containers would usually have cost about €2,200 to €2,800.

I went to book one in January and was shocked to be quoted over $6,000! I was assured it was temporary and after the Chinese New Year things would return to normal. I waited. In March I was quoted $8,500, a few weeks later $15,000. I decided to book and was told that the container would not leave until the end of June and prices were subject to change even AFTER departure. That container was cancelled by the shipper due to port closure due to covid.

The next quote I received, early July, was for $24,000 and again, subject to change after departure.

After a lot of enquiries eventually got a small broker to ship it for me for $18,000.

I've 1500 stainless steel hand basins on board at $16 each. Shipping has gone from less than $1.60 each to $12 each which of course means a hefty price hike for my customers and it'll be the same with all my other products.

I spoke with a colleague of mine recently who has put his prices up 25% across the board. I asked him did he think he'd lose much business over it and he said in a few months it won't matter about the prices as you simply won't be able to get the stuff. I've several UK suppliers who simply won't deal with me anymore because they're not willing to go through all the red tape that comes with Brexit.

I've always brought stuff in from Italy and Spain too so it's to there I'll be turning until China calms back down.

Expect many more price increases before the end of the year.

PS: I predict Christmas decorations/lights are going to be like gold dust this year and very expensive if you can find them

That is all very interesting. Somehow I missed this post.
I have been importing on a small scale from India for 25 years and have completely been unable to get my products from there since Covid. It was partially because they could not work there to hand produce items due to lockdowns - it was a small business - and then when things got a bit calmer the bottom had fallen out of their business (and thus the end of my importing). But over the past year I have also been sourcing ordinary industrial items for companies and it got more and more difficult as time went on - even stupid little things like screw fittings and ...well, anything! It has been a scramble to get very ordinary things.

I am getting a few more Christmas lights early so I got these lovely solar powered white twinkly lights online last year that I left up in a tree in the garden all year as they cheer me up so much.

[CelticRambler]

I did not say where I was sourcing stuff. The shipping lines are being affected in general, not just from China. It is not just shipping lines anyway, in the UK McDonalds has run out of products (not that I care about that, it is just an indicator) and so have other places due to staff shortages and staff quarantining etc.

It does seem that many business and personal customers in Ireland hadn't really fully understood that when Britain went ex-EU, it wasn't simply some airy-fairy notion with no practical implications. Even now, I know from first hand experience that there are people in Britain who don't quite understand that they've built a wall around their island. A metaphorical wall, but a very real obstacle all the same.

Before the Great Meltdown on the Other Forum, there was quite an active thread suggesting alternative (EU) suppliers for a wide range of products, and as a non-Irish resident, I haven't experienced any particular shortages or delays because I've never been dependent on the GB component of the supply chain. Construction supplies are available, even if they've gone up in price, and I was lucky to get the last of my big Chinese imports in before things went pear-shaped.

But don't forget that pretty much everything you might buy in Britain is also available here in France, or in Germany, or any of the other EU member states!

[Hairy-Joe]

I've heard of the shortages alright. For example, the bike shop I go to told me of a TWO YEAR lead time on some parts he ordered.

He is having trouble getting new bikes and especially spares. The problem is that with Covid, a lot of the component factories closed for a while. Then when they started back up, they realised that there was a shortage of everything and could make more money making other items in short supply.

Another problem is that when components are made, they are made both for the bike manufacturers and for spares. Any components that are being made are going to the manufacturers rather than the spares market.

Also, there are components that are not being used by the main bike manufacturers and generally there was a decent stock to handle the spares demand. However, due to Covid, the spares are generally wiped out and obsolete spares are not being made now. Hence stuff may be scrapped for the lack of spares before their time. This situation is probably being replicated in other industries that we don't know about.

[isha]

I've heard of the shortages alright. For example, the bike shop I go to told me of a TWO YEAR lead time on some parts he ordered.

He is having trouble getting new bikes and especially spares. The problem is that with Covid, a lot of the component factories closed for a while. Then when they started back up, they realised that there was a shortage of everything and could make more money making other items in short supply.

Another problem is that when components are made, they are made both for the bike manufacturers and for spares. There are components that are not being used by the main bike manufacturers and generally there was a decent stock to handle the spares demand. However, due to Covid, the spares are generally wiped out and obsolete spares are not being made now. Hence stuff may be scrapped for the lack of spares before their time. This situation is probably being replicated in other industries that we don't know about.

Seems to me it could be an opportunity for local manufacturing industries to start up.

[CelticRambler]

Also, there are components that are not being used by the main bike manufacturers and generally there was a decent stock to handle the spares demand. However, due to Covid, the spares are generally wiped out and obsolete spares are not being made now. Hence stuff may be scrapped for the lack of spares before their time. This situation is probably being replicated in other industries that we don't know about.

This is one of the very strong arguments in favour of commercial 3-D printing, especially (or primarily) 3-D metal printing. Not only does it allow for the production of an infinite number of parts with one machine, but it can also allow for the production of simpler, more reliable parts than the original, if earlier production constraints meant that original had to be made up of several individually cast or pressed elements subsequently joined together.

Having (supposedly) secured the "spare parts for ten years" rule for products sold in the EU, it would seem like a logical next step for the EU to require all manufacturers/distributors to make their parts designs available in 3D/CAD form for download by third-party fabricants after a certain length of time (that same ten-year threshold would be a good maximum).

[Hairy-Joe]

The thing is that a lot of bike components are quite basic to make (gear wheels, brake blocks, etc) and are made in SE Asia. Given the low value of the pieces and a diminishing market (as they are obsolete and/or not being used by bike manufacturers anymore) it's probably not worth the investment to make them here in Europe.

It's probably the same in other industries.

Also, I was in PC World a few weeks ago getting a new toaster (the old one died). I was shocked by the lack of stock on the shelves. When I was there pre-Covid, you would be falling over piles of TVs etc sitting on pallets to be sold. Now there was nothing like that a few weeks ago.

[CelticRambler]

Now that you mention toasters, the other day when I went to peruse our local hypermarket's selection of fridge-freezers, I was surprised to see that they only had F-rated models on display, not a single one of the A/A+ products that I'd been vaguely keeping an eye on over the last year.

[isha]

Another interesting bit of info re shortages in UK - this time labour. Due to loss of staff (most leaving UK after Brexit to go home to Eastern Europe ) there are 70,000 excess pigs in a kind of backlog now, and they may have to be slaughtered for no reason - ie as far as I can make out they won't go in the food chain. 15000 more pigs join that backlog every week. And for some reason high food prices by Christmas.

https://www.ft.com/content/ad37558e-be8 ... ace20938a7

The UK’s pig producers have warned they are weeks away from culling healthy animals after labour shortages in abattoirs caused a backlog of 70,000 surplus animals on farms.

The National Pig Association is the latest group to sound the alarm over the effects on its members from a lack of workers that has hit food production and haulage, with knock-on effects to many UK supply chains.

Zoe Davies, chief executive of the association, said some slaughterhouses were running as much as a quarter below normal capacity, leaving about 15,000 extra pigs per week stuck on farms.

“If they don’t do something soon we will have to destroy perfectly healthy pigs,” she said.

[peasant]

Covid has really shown up our "global economy" for the fragile house of cards it really is.

I work for a company in the automotive supply sector with manufacturing in Ireland, China and the US and customers all over the world. Like many global companies, we, our suppliers and our customers are globally interconnected.

Pre-covid, long term planning and forecasting throughout the industry meant that the whole apparatus more or less worked like clockwork, enticing ever more companies to move production to wherever it was cheapest over the decades. Warehousing stock was dismissed as being too expensive, instead everything was made to arrive "just in time" and the sea and the road became the industries warehouse.

Now, close a few plants or ports for a while and the hole clockwork is broken ...especially so as they not all closed at the same time. So you had over-production of one part in one country, whereas the other location was closed and produced nada.

And when everything got more or less back into sync productionwise, you found that you couldn't ship the stuff. Empty containers piling up in one location that were needed somewhere else. Congested ports, ships stuck for weeks...a mismatch of demand and supply that went ever more out of sync.

Containers from the US that used to take four weeks to get here now take 12 ...first they cant get containers, then they can't get loaded, when they finally arrive in Europe they can't get unloaded and when they finally do, they sit in Antwerp or Rotterdam for ages until a suitable feeder is found to bring them to Dublin ...plus it costs treble than before.

We now have global shortages of computer chips/electronic parts and plastic granulate among many other things. These two are important to note though...because they go into everything.

Ford USA has acres and acres of nearly finished pickup trucks waiting outside for some small components that need a chip and a a few plasticky bits.

Peugeot has replaced the digital dash in some new models with old fashioned instruments in order to be able to sell the cars.

Nearly every car maker in Europe is running well below capacity and also well below demand ...waiting lists for new cars are getting longer and longer.

As somebody said above ...hopefully lessons will be learned and the global factories will get replaced with a more localised system ...because what we were doing was anything but sustainable. Always chasing the cheapest way of doing things with no regard for the environment or the human factor ..just looking for every single cent of profit.

[isha]

^^^Very interesting, peasant.

[Scotty]

Peugeot has replaced the digital dash in some new models with old fashioned instruments in order to be able to sell the cars.

Weren't Nissan UK or someone flying staff to Japan a while ago to bring back keyfobs as personal luggage?

[peasant]

Weren't Nissan UK or someone flying staff to Japan a while ago to bring back keyfobs as personal luggage?

Didn't hear of that one, but could well be true.

Personally, I have to say that I'm quietly happy about the automotive industry being short of electronics/chips ...because it's their own bloody fault, their hubris has finally caught up with them.

The life of an automotive supplier (especially in the first tier) has been a hard one. Automotive companies were used to squeezing the last drop of blood out of their suppliers ...because they could. They said jump, you asked how high, and that was that.

So, in the first phase of corona when pretty much all car production stopped for a period, the car companies cancelled their chip orders (because they don't carry stock, you see, they want to be supplied just in time)
They were of course fully expecting the chip makers to pile their goods high in expectation of a recovery of the car market.

The chip makers did no such thing...because while people were in lockdown, they started buying electronics like mad...so the chips went there.
Chips had been in short supply before and with this new demand opening, the chip makers had no reason whatsoever to sit on cancelled orders when they could find willing buyers for them. So electronics companies bought up all the production they could get their hands on, not just the cancelled car capacity, but any available capacity into the future as well.

And when the car makers came back with higher than expected demands, not only could the not get what they had thrown back at them before...they were told to go back in line and wait for their share...serves them right.

But behind all that lies a global shortage of electronic chips ...that's based on the fact that it takes billions and years to get new production going, which (understandably) hasn't been done in a while

[quodec]

Speaking to a potato merchant recently with 20+ years in the business and he is of the opinion that the perfect storm of Brexit, inexorable climate change and the modus operandi of 'Just in Time' trading, is already beginning to have an effect on important food supply chains. The process of food provision (which 99% of people havn't a clue about); from planting, to harvesting, to wholesale and retail sourcing becoming more problematic will soon drive prices higher and supplies of staples becoming more difficult to acquire. In his opinion the only viable solution is somehow to become self-sufficient.

[CelticRambler]

The process of food provision (which 99% of people havn't a clue about); from planting, to harvesting, to wholesale and retail sourcing becoming more problematic will soon drive prices higher and supplies of staples becoming more difficult to acquire. In his opinion the only viable solution is somehow to become self-sufficient.

"Somehow" isn't as difficult as it might seem - on the farm machinery forum a few weeks ago here, with a follow up thread of its own here, I wrote about how the pandemic has boosted what's called "short circuit" farming/food production in France. For the reasons set out in the second thread, there's been less of an impact on prices than might have been expected, but it very much depends on the customers accepting that you can't have everything fruity and veggie all year 'round, and meat-eaters need to get used to eating the whole animal that's been killed on their behalf, not just the leanest, juiciest cuts.

[isha]

A humourous response I saw to one lady's upset over haloumi.