“The circulatory system our globalized economy depends has collapsed.”

Ryan Petersen, CEO of of Flexport;

Yesterday I rented a boat and took the leader of one of Flexport’s partners in Long Beach on a 3 hour of the port complex. Here’s a thread about what I learned.

First off, the boat captain said we were the first company to ever rent his boat to tour the port to see how everything was working up close. His usual business is doing memorial services at sea. He said we were a lot more fun than his regular customers.
The ports of LA/Long Beach are at a standstill. In a full 3 hour loop through the port complex, passing every single terminal, we saw less than a dozen containers get unloaded.

There are hundreds of cranes. I counted only ~7 that were even operating and those that were seemed to be going pretty slow.
It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.
Right now if you have a chassis with no empty container on it, you can go pick up containers at any port terminal. However, if you have an empty container on that chassis, they’re not allowing you to return it except on highly restricted basis.
If you can’t get the empty off the chassis, you don’t have a chassis to go pick up the next container. And if nobody goes to pick up the next container, the port remains jammed.

With the yards so full, carriers / terminals are being highly restrictive in where and when they will accept empties. […]

And with all the containers piling up in the terminal yard, the longshoremen can’t unload the ships. And so the queue grows longer, with now over 70 ships containing 500,000 containers are waiting off shore. This line is going to get longer not shorter.
This is a negative feedback loop that is rapidly cycling out of control that if it continues unabated will destroy the global economy.

Alright how do we fix this, you ask?

69 Replies to ““The circulatory system our globalized economy depends has collapsed.””

  1. Am I the only one who gets the sense the entire bottle neck has been organized by corrupt governments at all levels? Seriously Califlaka can’t be that incompetent can it?

    1. Rose, NO you are not the only one. By a very long shot.
      Klaus Schwab, WEF, Build Back Better. Biden and most western leaders have bought into it.
      Collapse it first.

      It’s a more broad based Cloward-Piven technique. Overwhelm the system.

    2. Most families are 9 meals away from nothing. Most modern homes do not keep a pantry. And that is just the front end of the problem. The Covid Death Cult Leadets aka Trudeau, Biden, Kenney etc have also bankrupted the country and the Provincial governments as well. The Financial collapse that is coming will mean no pensions, huge cuts in healthcare, schools, and many many feel good programs will be gone. Expect to also defend yourself as the crime wave and break ins and home invasions will be brutal. Yet people keep believeing these criminals in government.

      1. And there is no agenda to destroy America and the west, and the whu who flu is killing everybody, and the vaxxes are 100% safe, and EVERYBODY REALLY IS STUPID, which of those things are true? They will catch on when we start to take everything they thought they were going to keep from us.

      2. That’s interesting what you say about 9 meals. Yes, most people will be unprepared for what’s coming. In terms of pensions, they will not cut them off, they may seize pensions and roll them all into the Federal Government. They won’t cut off all pensions. Their goal is to give everyone a basic minimum pension so that everyone is reliant upon the government. They will try and roll out digital currencies soon and at that point, they will be able to control your life if you are reliant upon the digital currency. People need to prepare beforehand while we still have control over our money….

        1. THEY will do that to the ones that survive.
          The one’s not stupid enough to take the Clot shot.
          That way we can be enslaved to do their bidding long enough until the robots take over.
          Then it is a downward push to the 1/2 billion population level needed I think to conserve enough fossil fuels and food for the Great Global Cooling / Maunder Minimum that THEY know is coming.
          ( It’s the only sane theory I got, why they are doing this, other than the other one , that Satan wants us ALL dead )

    3. No. TOTALLY by design. Just like gas shortages. They are trying to bankrupt us after two years of Covid. Shut down businesses. Google Planet Lockdown by Catherine Austin Fitts. Pretty much step by step. Remember Trudeau hiring 1000’s of CRA agents a few years ago? Calling small businesses tax cheats? Now Biden doing the same! It’s about us vs them (elites). They are dividing us along every front. It’s going to be a tough winter. Forget TV’s, food, sofas and computer chips, when is medicine going to quit coming?

    4. Democrat California forbids tractor trailer trucks more than 3 years old. Half the truck fleet. So 3+ year old trucks come from all over N America and unload at the Commifornia border, whereupon a 3 year newer truck takes it into Social Enviroland.

      But wait, there’s more.

      Commiforia forbids independent owner operator trucks that bid on loads.

      Ha ha.

      Good thing President Dementia appointed as Transportation Secretary a gay Harvard son of Marxists, and now on maternity leave( he/she is the wife, nursing adopted twins with strap on milk breasts) for two months.

      Lastly, see Canadians! Grande US can way way out fk up mire than you guys. Nice trying though.

      1. Also, the US has a federal rule that prohibits truck drivers under the age of 21 from driving across state lines. So there goes another chunk of potential help.

      2. Scott Adams, yesterday or day before on his podcast said that he was gonna help somebody to get a trucker license in California.
        The person turned it down.
        Anyway the trucker course that you gotta take cost some $3000 to $5000 USD.
        Adams mentioned that for an unemployed guy its impossible to take the course and pay that kind of money with job uncertainty.
        How long a trucking job would last? A few months.
        With them people coming over the southern border, working cheap, not likely that safe bet.

    1. READ WHAT THE ARTICLE SAID…there is no place to unload the ships to.
      Where are the railroads?
      where are the trucks? (regulations; Newsome)

      1. *
        wanna know how important container ports are in this world economy?

        ever wonder why africa can’t pull itself out of the stone-age?

        “The development of port infrastructure in most African countries lags behind
        the rest of the world – only three African ports are featured on the 2020 list
        of top 100 global container ports.”

        maybe hand-bombing material onto wooden skids isn’t the way to go.

        *

    2. Should have fired Newsome when they had the chance. Legislation governing working/driving hours very much the problem from my understanding.

  2. A secondary limitation on trucks recently mentioned is the change in environmental restrictions in Cali several years ago that essentially limits OTR tractors to those built in the last 3 yrs, as older 18 wheelers do not meet the standards and can not be operated on Cali highways. Since OTR tractors have a commercial life span of 4-8 yrs or so this has crimped access to Cali for companies that continue to use trucks older than 3 yrs.

    1. Apparently a lot of independent truckers can’t operate in California due to California law AB5, also known as the gig economy law. Adding fuel to the fire

  3. While I appreciate the story I have to take issue with these lines…

    “It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.”

    The bottleneck is not yard space – it can’t be, otherwise this would have happened before. The bottleneck “must” be in getting the containers out of the yard, if the yard is piled high with containers. Otherwise there would be a bee-hive of activity trying to get the containers out of the yard. It seems like each person sees a small glimpse of the truth and yet there is no one person who knows what is going on. How did this suddenly happen? I am very suspicious.

    Meanwhile the children won’t get their $10 billion worth of Halloween shit from China.

    1. Meanwhile the children won’t get their $10 billion worth of Halloween shit from China.
      Wow, yes I look on the bright side.

    2. Demurrage must be through the roof. heh I hear we can just perform the liturgy of the church of sciencieness stuffs by chanting the magic words on twitter: contemporaneous container coincidence has nothing to do with the supply chain.

      Agree that you have to map out the entire supply chain to look at each step. Accumulation in one area, that wasn’t happening before is a symptom but sometimes using the shotgun is the right answer at least in the short term. Inelegantly, expensively and inefficiently solve a problem to prevent a bigger one. Assuming no one wants the bigger problem. To keep the original problem from recurring as you back off the emergency measures, you do need to understand the root causes. Someone should do a proper RCI and perhaps a monte carlo sim.

    3. I agree Steve, Gavin Newsom announced he will be ordering State Bureaucrats to look for open government property to store containers … empty or otherwise. Can the Harbor operators be THAT incompetent? That they couldn’t foresee an imbalance of container movement, resulting in a choking excess of containers (loaded or empty). With ALL the wildly sophisticated computer programs that coordinate the movement of containers!? I don’t think so.

      The clog is with big rig movement. And THAT problem lays squarely on the State of CA’s myriad of anti-business regulations that are choking off big rig traffic. And the problem lies (see what I did there) with the EPA’s “finding” that micro-fine particulate matter is killing BIPOC children in god-forsaken “urban” hell holes such as The LBC. Yes, Gavin Newsom and the “green” voters if CA have prefabricated this mess.

      And no, it won’t get better … because the State will NEVER back off it’s “green” agenda. In fact … in the back rooms and leftist cocktail parties where people say things like “energy prices will necessarily rise” … they are now saying; “GOOD! It’s about time the capitalist consumer culture got STOPPED”

    4. Read Eliyaha Goldblatt’s “The Goal”. An oldie but a goody on how to solve the problem of bottlenecks.

  4. However, if you have an empty container on that chassis, they’re not allowing you to return it except on highly restricted basis. If you can’t get the empty off the chassis, you don’t have a chassis to go pick up the next container.

    Set up temporary holding facilities for empty containers, with appropriate paperwork waivers, and free up the trucks. Once the system is running again there will soon be a demand for the containers.

    1. A problem with just in time infrastructure, that single part in the 500,000 containers that you need, may never be found quick enough. Your still waiting through months of backlog.
      You also have China companies going bust waiting for an empty container or even to make an order as this system has slowed down and yet still needing vast amounts more fuel everywhere.

      1. “You also have China companies going bust waiting for an empty container…”

        We can hope, anyway. A nice side-effect here is that if ALL the containers are stuck in Cali then -none- of them are available to the Chicoms to ship stuff out.

        Warfare by other means. Two can play at Sun Tzu. They threaten Taiwan, the Americans “accidentally” can’t send back all those empty containers.

        Be a shame if all those multinationals were forced to start making stuff in North America again, eh? Apple might have to start making iPhones in Kentucky, GM might be stuck buying bolts from American steel mills. Darn.

        1. *
          have China companies going bust waiting for an empty container”

          well… they’re making new ones willy-nilly… but that has pushed
          2020 shipping costs from $3,800 per container from the far east
          to $17,000 plus dollars today.

          *

  5. I saw similar things in Vancouver.

    Earlier this year, I was still flying to and from my house in B. C. If I took Air Canada, I would have to pass through Vancouver. From the air, I could see at least 20 or 30 ships in the harbour and several more closer to Richmond.

    And, like in the California ports, I saw containers stacked, sometimes 3 or, perhaps, 4 deep. Actual ground space near the various yards was becoming scarce.

    1. What if … the stuff in the containers isn’t sold and has nowhere to go? What if … there has been a massive slow-down in the economy and there is nowhere for this stuff to go? You would have to move 4 containers of unsold crap to move 1 container of sold crap… just searching for my weekend conspiracy theory.

        1. There are reports of full containers destined for companies that are now bankrupt. Don’t know the size of this problem, but can’t be helping things.

          1. The Bankruptcy Receivers will take delivery and liquidate everything for pennies on the dollar.
            Stuff will get sold, money will be made and hopefully a few bargains can be had.

  6. Folks, have you figured out how to keep Gates and Schwabb and company from taking all you have worked all of your life to have?
    That better be on the list as they seem to have gone back to trying for the original ‘Agenda21’

  7. The weather started getting rough, the tiny ship was lost. If not for the courage of the fearless crew… oh wait.

  8. More ships have been coming to the US east coast via the Suez Canal. Remember the Evergiven, the container ship that got jammed sideways there this spring? Coincidence, or deliberate? That few days created terrific panic among shipping companies. Funny that it never happened before.

    1. it’s happened at least 2 other times within my lifetime, and that doesn’t include the time it was closed due to Egypt attacking Israel….

  9. What/who can we trust or depend on when everyone is an expert just because governments say so?
    Maybe we can trust incontinent products like “Depends” and be very suspicious about the rest.

  10. If the election had not been stolen, this wouldn’t be happening. State’s rights do not extend to damaging the entire country’s economy, and if Canada was a real country, our leadership would be putting pressure on the US, as this bottleneck is harming the entire continent’s economy.

    Both the US and Canadian leadership actually want to ruin the continent’s economy.

    1. Exactly right. Why Trudeau was desperate for a majority. Not that it matters with useful idiots like Singh and O’Tool.

  11. Those who’ve never worked in the private sector, run a business or met a payroll, telling those who have toiled for decades in theirs how to do so, with no clue other than reading the Economist or attending seminars on equity fairness BS, all of it on entrepreneurs’ dime.

    Put another way, bureaucrats with no skin in the game gambling with the wealth and money of those who put it on the line every day.

    Intellectual Yet Idiot (IYI). Sure in their hearts what they could never know in their minds, the default changed towards statism, not away.

    A second set of eyes with the binders on. What could go wrong? As we said in the Forces – seen. Counterintuitive government inaction.

  12. Just maybe they will have spectacular fire sale on empty containers. The last 40ft conex I bought cost 4,200$ delivered southern colorado about 4years ago. Maybe the prices will halve? One can hope. Salt Lake is the closest big conex center receiving them by rail.

    1. Prices for containers have doubled in Canada and unless you have lots of land they don’t like issuing permits. I paid $3,200 CAD for a 40-fter 10 years ago. Recently I was told a 20-fter would go for $4,200 if I could get one. To rent one is $108/mn.

  13. Has Biden created a quasi embargo with China?
    I doubt they are that clever, but if we embargo Chinese products, don’t they suffer as well?

    1. Until such a time as we de-regulate our own manufacturing sector(at the very least, as pretty much every sector in the west is regulated to the point of not being able to compete), embargoing China is not only economic suicide, but also physical suicide.
      The Yellow Man’s Burden.

  14. Time for a consortium of regular folks to invest in some inland acreage and take those empties the truckers want rid of…and start hoarding them.

  15. Looks like the Marxists are trying to do a re-run of the 1921-22 Povolzhye famine in Russia which was one of the worst human disasters of the 20th century (and which my Dad’s family lived through)…..where the U.S. tried to ship corn to Russia but the Bolsheviks wouldn’t allow the trains to carry it from the Black Sea to the Samara area in Russia. But then that’s what Marxists do best. Create misery.

    1. The whole point was to kill ethnic minorities by seizing their crops. Why would they screw that up by allowing import of food? I likely lost some relatives in this holocaust. In one village the communists seized all the potatoes and put them by a railway siding where they sat all winter and spoiled. Anyone touching them would have been killed.

  16. A good idea might be to charge a $5,000 deposit on all containers entering the US which is refunded when it hits a foreign port whether it is full or empty.

  17. Also, the IS has a rule that prohibits truck drivers under the age of 21 from driving across state lines. So there goes another chunk of potential help.

  18. It’s not just California. Vancouver is similar. The whole global system has been thrown out of whack by governments of the world delusionally believing that they could turn the economy off and back on without any consequences.

  19. Just in time one of the worst storms ever in the north Pacific is set to hit on Sunday. Already we have a cargo ship on fire and likely to sink off the coast of Vancouver Island after Thursdays storm. Seriously come Sunday evening / Monday morning a good portion of southern BC will be without power.

  20. During the coronavirus panic they stopped loading empty containers back onto ships. Now the US ports are jammed and exporters can’t get them.

    1. roadog, first we have to get back to making our own stuff. We have destroyed the manufacturing capability all across the country.

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