Magnesium shortage

For a stunning wake-up call to just how concentrated the complex global supply chain is, 85% of the world’s magnesium production comes from China. Much of it comes from one town in Shaanxi province, Yulin, where the government has curbed output at 70% of all magnesium smelters this year due to energy conservation ahead of the Northern Hemisphere winter. 

The article specifically references the automotive industry. But in reality anything that uses aluminum is being affected. In addition magnesium is used in the creation of a variety of metal alloys, not to mention a huge list of medical applications.

That 2nd article also references silicon shortages, which also affect aluminum, as well as a bunch of other things. Like, glass, concrete, electronics (its part of the computer chip shortage problem), medical implants, toothpaste, deodorants…..


Supply chain woes

I get so many comments from customers at work who don’t understand why the supply chain broke the way it did. In addition I see ALOT of comments online in the same vein.

I’ve been slowly trying to come up with an analogy that explains it, but there’s no short explanation. The answer is complicated no matter what. But here’s my best try so far. Note, all numbers and many of the dates used here are made up. In some cases it’s because I don’t know the exact numbers. In others its because I DO know, but that info is likely proprietary to my job. And regardless nice round numbers are easier to work with when typing up examples.

So, I work at a local Home Depot. Lets say that in March of 2020 we’d JUST gotten in our first shipment of lawnmowers. Lets say that shipment is a grand total of 50 mowers. And that 50 mowers was expected to last us till the end of April. Instead the shutdown hit, and that 50 mowers were sold out before April 1.

So the store calls the warehouse and says that not only do we need another 50 lawnmowers a month early, we want you to ship us an additional 50 cause holy crap sales!! (ok, this is all automated, but work with me here)

The warehouse says holy crap! I can send you another 50, but we weren’t expecting you to need them for another month, so I REALLY don’t have that extra 50. I’ll see what I can get! The warehouse ordering person calls the manufacturer (again, this is all automated in RL) and says sales are through the roof, we need to at least double our order!

The manufacturer says I’d love to double your order, but we’re not an essential business so you’re out of luck till we’re allowed to run again.

So two months later, the stores and warehouses are all sold out of lawnmowers and the manufacturer is finally allowed to start running their lines again, but they have to do it with extra social distancing, which means at a slower pace, and they’re at risk for being shut down every time someone tests positive, but at least they can start building lawnmowers!

Except that they only have enough of the various parts on hand to build the originally expected orders of lawnmowers, not this more than doubled sales orders of lawnmowers. So they start making what they can, and in the mean time they call the parts manufacturers and say Hey! We need to at least double our orders!!

The parts manufacturers look at their supply of raw materials and say well, we have enough on hand to make up the parts for the originally expected orders, but we don’t have enough to do double, much less more than double! Plus we’re at risk of the same slowdowns/shut downs you are, but we’ll do our best! And THEY call the raw materials peoples and say hey! We need to at least double our orders!

And the raw materials peoples say geez people, we haven’t been able to mine the raw materials in 3 months! I don’t have it! And we’re at risk of the same shutdowns and slow downs you are, but we’ll do our best!

Meanwhile the store is sold out of lawnmowers again, and the manufacturers are dribbling them in because holy shit no one predicted anything like this mess.

And the orders just keep rolling in.

And the transport between raw material people, to the parts manufacturer, is clogged all to hell, cause covid, and restrictions, and no one expected to have to ship double the number of containers with no warning.

And the orders keep coming.

And the raw materials finally make it to the parts manufacturers, who rush to make the parts, and then the transport between parts manufacturers gets clogged, because now we’re not only running double the containers of raw materials but we’re running double the containers of parts, all with no warning.

And the orders just keep coming.

The parts finally make it to the machine manufacturing line, and they rush to build the actual mowers. And now the transport from them to the warehouse is clogged and backlogged all to hell, cause now we’re running double containers of raw materials, parts, AND finished machines and holy shit we don’t have that many drivers, much less chassis to put the containers on!

And the orders just keep on coming.

AND all those mowers still need to get from the warehouse to the store, with is yet ANOTHER layer of transport doubling.

And by this time the orders have continued to the point where we need to actually TRIPLE our order back here at the store. And we’re not sure THAT’S going to be enough. So go back to the beginning of this and substitute “triple” for all the word “double”.

And then do it again for the word quadruple.

Now do the same math for something like half the products that a store like Home Depot sells.

And multiply by the number of stores that Home Depot has around the country.

And multiply again by all the other stores LIKE Home Depot who found themselves stuck in the same holding pattern.

Add in that the internal USA materials transport system has been running a bit short since well before 2020 for a variety of reasons including the generalized panic over air pollution from the trucks and lack of drivers and constant added restrictions from states, counties, and towns.

Add in that when Covid hit the media did their damndest to panic the world into refusing to work and hide at home. And then the .GOV paid them MORE to stay at home than to work.

And the ones who did work found themselves burning out at an even faster rate than normal. AND not receiving that additional pay that the folks sitting at home were getting. AND doing so while dealing with the same materials shortages that everyone else was dealing with.

And the orders just keep rolling in.

And now we’re short on the parts needed to FIX the trucks and chassis and keep them on the road.

And the costs for the parts we do have keep going up.

And the manufacturers also have to have parts to keep THEIR machines going.

And people are still ordering and ordering and ordering.

This is so over simplified its not even funny, and I KNOW I’m missing out on all sorts of aspects. There’s bottlenecks all along the transport lines for various things. The ships backing up at cargo points is the one currently making news, but keep in mind it’s not JUST a matter of getting all those ships unloaded. Those containers have to go somewhere, and the ports can only hold so many at a time. And while huge portions of that process is automated you still have to have people to keep an eye on the machines. And chassis to put the containers on, and trains and trucks and machinery all need parts to run.

And people won’t stop ordering more things.

I keep seeing people saying that “if we made more things here in the USA we wouldn’t be in this problem!!!”, and while I agree with the underlying concept its not realistic. First of all a huge portion of the raw materials have to come from overseas no matter what, unless we want to open up ALOT of mines here in the USA, and trust me, you don’t want to (plus there’s things we can’t mine here, so yah). So there would still be international transport bottlenecks. Second, we shut down EVERYTHING that the various politicians decided wasn’t “essential” for 3 months. And since politicians are idiots their definition of “essential” had no bearing on reality. Plus the US public is madly materials oriented, I don’t think we could have enough internal manufacturing to keep up with demand these days. I really don’t.


63 ships waiting to unload off CA coast

10/6/21 “The ports had 90 container ships in the port, 63 of which were waiting off the shore on Tuesday — a number far above the ports pre-pandemic average of zero to one ships at anchor.”

Ran across this site that tracks commercial ships at sea in real time.

For those of you who don’t want to click through, here’s a screenshot taken minutes before posting:

If you actually zoom in to a smaller area you can see that to some degree the congestion is actually the result of the big icons, but still, thats ALOT of ships.

On the other hand, the average consumer is actually waking up to the fact that the supply chain is a bit fucked. I had 3 different people yesterday ask me if HD had stock stuck in that cargo ship mess in CA.

Of course, one of them then proceeded to tell me that “they could unload those ships if they wanted to, they’re trying to artificially raise prices”.

*sigh*


The supply chain is so fucked

March 2021 plastics shortage across industries

April 2021 big rig parts and supplies, including rubber and computer chips

April 2021 Land Rover suspends production due to shortages

April 2021 shortage of pipette tips causing testing and lab shortages

April 2021 semiconductor shortage hits all electronics industries including appliances, small electronics, vehicles

April 2021 aluminum shortage affects beverage industry

May 2021 shortage of glass bottles and jars

June 2021 increasing plastics shortage

July 2021 big rig parts and supplies

July 2021 Ford cuts production due to shortages

July 2021 shortage of glass packaging

July 2021 shortage of aluminum packaging

July 2021 seafaring crews burning out

August 2021 over 40 ships waiting to unload off CA ports

August 2021 Toyota cuts production by 40% due to shortages

August 2021 restaurants report shortages of plastic cups and takeout containers

August 2021 plastics shortage affecting beverage industry

August 2021 shortage of glass bottles affecting liquor industry

August 2021 aluminum shortage affects across industries

Sept 2021 computer chips and auto parts shortages

Sept 2021 a record 56 ships waiting to unload off CA ports

Sept 2021 tracking a single toy through the supply chain

Sept 2021 plastics shortage affecting sporting goods industry

Sept 2021 Kroger says grocery prices continuing to climb

add in constant labor shortages that have only increased in the last year

add in that EVERYTHING relies on computers to run

we’re running short on just about anything that can be used as packaging for products across the board, never mind the products themselves

we’re literally looking at shortages of the materials we need to package foods in, and not just the single meal freezer things, but whole roasts, large bulk meats, kegs of drinks, milk jugs, are all packaging plastic or metal or glass based.

and none of that is looking at the medical industry, I mentioned it briefly in one of the above links, but all of these material shortages also affect the packaging of drugs, sterile liquids, sterile needles, packaging to keep things sterile, IV line hose, IV bags, lab equipment. Plus the labor shortages in the medical industries were already severe before COVID, then folks burned out hard during COVID, and now we’re firing some fairly significant percentage of the remaining peoples because they’re wary of the COVID vaccines. Think it’s already hard to get in to see your doctor? It’s about to get way worse, only now not only is it because there aren’t enough doctors, it’s also because they don’t have the supplies to do your treatments. Need an infusion? Lets see, metal IV needle, or plastic port, silicone hose, a not short list of plastic parts-valves and what not, the bag or bottle containing the medication, various sterile packagings.

Oh, medications! As of Feb 2021 80% of the raw materials used to make drugs used in the USA are manufactured overseas. Which means that not only is there a packaging problem for medications, there’s all those same transportation and manufacturing and labor problems for medications too.

Lets see, what else is of vital importance….oh, electricity to run the hospitals, and your fridge! April 2021 continued parts shortage and price increases of electrical supplies and copper. July 2021 expect electrical supply shortages through 2022.

What about running water? April 2021 shortages of PVC pipe cause a relook at clay pipe. April 2021 pool equipment shortage, seems pretty benign, till you realize much the same equipement is also used to handle drinking water. Infact the same supply chain disruptions that affected all the plastics and rubber are all things that are required for the making of water pumps, plus metals and plastics for the pumps themselves.

But yes, lets keep freaking out about a virus with a 99+% survival rate and lets keep shutting things down and making things harder and harder to run. Who needs electricity? Or food, or running water, or drugs? Its all good……


What I’m seeing in stores

I’ve spent the last several weeks at work either working hardly any hours, or working strictly in the receiving dept, so I haven’t been able to watch the sales floor the way I usually do. But I’m noticing things anyway.

Cement/concrete mix is still selling out as fast as we can get it into the store.

OSB has dropped back to something close to 2019 prices. My store has plenty in stock, but stores across the country are reporting shortages still.

Halloween decor hasn’t even hit the sales floor yet and people are already buying things to the point of driving them out of stock.

On the pesticides sides of things, Raid spray cans have been sold as larger cans marked “20% extra!!” for a few years new. This year? They just switched them all back to the smaller cans without those markings. For a higher price. Not sure if its a chemical shortage, a metal can shortage, or something else.

Cleaning chemicals are still wonky. We’ll get a case, or a batch of cases, of one product, and then not see it again for weeks and weeks. We have disinfecting wipes in all the major brands though.

So far no real issues with TP or paper towels, but I’m noticing a shortage of overstock too. We’ve been able to keep the shelves full, but we don’t have as much spare as we did.

At the grocery store things are getting interesting again. The last two weeks I ended up in two big grocery stores (one Wegmans, one Tops) and a little locally owned butcher/deli/store.

The deli meats sections were looking a little sparse at Wegmans, but I don’t normally get my lunch meats there so I didn’t stop and browse. The little local deli was looking decidedly empty, they carry almost exclusively Boars Head usually, but this time not only were they short on products, half of what they had were from different brands. They were busy, and the kids working the counter were already overwhelmed with people being pissy because they couldn’t get what they wanted, so I didn’t ask for details. When I stopped in at Tops I noticed that they were also looking short on deli meats, and they had a sign up stating “so sorry for the shortages on Boars Head products”. They didn’t have a line, so I asked the guy cutting my order if they’d had any input on what the supply chain issue was. He said they were being told it was a plastics issue (to wrap the products in to ship to the stores). He also said that there were several Land O’Lakes products that they’d not been able to get consistently for a few weeks too. I can believe there’s a plastics issue. I can also believe there’s an ingredient issue.

Wegmans and Tops have both shrunk their canola oil sections, and neither was full. Since I was shopping both on (separate) Friday afternoons if they COULD have filled them they would have been full then.

Ice cream, especially the individually wrapped “novelties”/servings ice creams, are looking remarkably short stocked and have for weeks at both big stores, and the little local place has also been showing signs of stock problems. I’d originally put it down to the hot weather driving sales, but the shortage has lingered way past the point where that’s a reasonable assumption. Grocery stores thrive on getting stuff like that on the shelves quickly when there’s a run, but gosh this is looking like a precursor to the empty sections of 2020 again. Could be plastics again, most of those products are individually wrapped in thin plastics of some kind.

Vitamins and the like never really recovered, last time I paid attention ALOT of the vitamin powders used come from overseas, especially Asia, and I wouldn’t be surprised if that supply chain never recovered right. Both Wegmans and Tops have recently rearranged their vitamins sections to look less empty, but if you know what you’re looking for they’re still short on alot of things.

Sanitary napkins and supplies are STILL short at both stores. Both have also shrunk and rearranged those sections, and they STILL look half empty.


A perfect example of the fucked supply chain

Fillmore Container is significant retail and bulk supplier of supplies for canning, candle making, and other such supplies for crafters. They specialise in glass jars of all kinds and the accessories needed to go with them for the above mentioned crafting and canning. As a canner I have found that there are often cheaper places to buy canning supplies, often locally, but Fillmore normally carries an awesome selection of products that’s worth keeping an eye on.

They just did a blog post on the company blog, detailing some of why they’ve had to keep prices high and why stock is still short.

Its all connected folks. And its not even close to fixed. Infact, it keeps getting worse. I’ll admit to a temptation to sit back and watch it all burn and enjoy my popcorn, but the reality is that I have to live here too. So STOP the fear-mongering over that damned virus, and figure out how to get it all working again. Or we’re ALL going to regret it.


Food

Did I mention the supply chain is broken? Cause the supply chain is very broken. And what does that have to do with food that I’m bringing it up now?

Well, it means that after last year’s, ehem, “issues”, no one anywhere has any backstock of much of anything. Well, the warehouses and the suppliers don’t anyway.

So its not going to take much to throw portions of the food chain into disarray again.

So when I see reports like THIS. Or THIS. Not to mention THIS. And am reminded of THIS. On top of last years, ehem, “issues”, well, it might be time to make sure you’re keeping an extra bag or two of flour in the freezer. And maybe an extra box or two of pasta. Or bottle of oil.


whats going on in stores by me

This mornings OSB screenshot:

Also, concrete is going to be the next thing to spike in price. We can’t keep it in stock, and we’re not the only ones. Not sure if its a labor problem, a transportation problem, or a materials problem, but good luck getting it if you need it.

Insulation, and roofing, are short.

Hand powered garden tools, well, lets just say that that aisle is damn empty.

Peat Moss is completely unavailable.

For various reasons I ended up at 3 different grocery stores in the last two weeks. Flour is short across the board, they all had some in stock, but only enough to put one or two in each shelf space. Vinegar is short again. The vitamins shelves just keep getting emptier and emptier. Sugar was the emptiest I’ve seen those shelves since the original shut down. Cat food actually looked decently stocked, till you looked at the selection and realized that they’d just rearranged the shelves. Cat litter has NOT recovered yet.

Bird seed is damn near non-existent again, especially if you’re picky about the type of seed you want.