Connect with us

Spread & Containment

Peak Retail Season: Let The Chaos Commence

Peak Retail Season: Let The Chaos Commence

By Todd Maiden of Freight Waves,

Freight markets have entered their second year of extreme dislocation, brought on by record consumer spending and a transportation network that doesn’t have the…



Peak Retail Season: Let The Chaos Commence

By Todd Maiden of Freight Waves,

Freight markets have entered their second year of extreme dislocation, brought on by record consumer spending and a transportation network that doesn’t have the labor or equipment to fill the need.

Freight continues to roll in amid capacity shortages (Photo: Jim Allen/FreightWaves)

A lack of openings on ocean sailing schedules, ships waiting longer to berth at the ports and delays unloading the freight once it has landed are some of the front-end issues facing the transportation industry. Once freight is routed inland, a chicken-and-egg scenario is playing out between container/chassis scarcity and slow rail service, with each causing further detriment to the other.

Add in labor headwinds throughout all phases of the supply chain, notably difficulties finding truck drivers and warehouse workers, and the storm for freight delivery is near perfect.

Inventory pull forward pushing inbound containers to new highs

The National Retail Federation said earlier this month inbound twenty-foot equivalent units would again break a recently established monthly record. The group is calling for August TEUs to increase 12.6% year-over-year at the nation’s largest retail container ports to 2.37 million, which would surpass the record just set in May.

“August is the beginning of the ‘peak season,’ when retailers stock up on holiday merchandise each year,” the report stated. “Many retailers are moving up their shipments this year as part of their risk-mitigation strategies to ensure that sufficient inventory will be available during the holidays.”

FreightWaves data shows inbound ocean bookings are accelerating again.

Chart: (SONAR: IOTI.CHNUSA). Ocean bookings to the U.S., measured as a 10-day-moving average of volume being tendered with ocean carriers and freight forwarders, are forward-looking and provide insight into volumes before they depart a port of origin.

The NRF expects full-year 2021 TEUs of 25.9 million, 17.5% higher year-over-year and a new record. Monthly volumes are expected to remain above the 2 million-unit level for the rest of the year, continuously stepping lower from the August prediction to 2.02 million by December.

However, loaded imports came in lower than expected in July at the Port of Los Angeles due to congestion. Loaded inbound TEUs of 469,361 were light of the port’s expectation of 516,000. The port’s executive director, Gene Seroka, pointed to warehouses filled beyond capacity, maxed out rail yards and difficulties finding chassis and containers as the culprits for the shortfall.

“Both anchorage and dwell times are trending in the wrong direction,” Seroka said. “Seventy-five percent of ships stopped at anchor in July [instead of heading to berth], up from 50% in June. Early data for August shows that 90% of arriving vessels are headed straight to the parking lot.”

Dwell time hits new record at Port of Los Angeles

As recently as mid-August, 125 ships were either at berth or anchor (including 37 container ships) at the Los Angeles and Long Beach ports, which was an all-time high.

Seroka’s update showed dwell time at container terminals was at peak levels (5.3 days), and street dwell time at the warehouses was near peak (8.3 days). Seroka estimates that for each one-day increase in dwell time, an additional 3,500 chassis are required.

He is calling for the port to handle a total of 950,000 TEUs in August, compared to 890,800 in July. Total TEUs are expected to step down to 880,000 in September with the full year producing 10.5 million in total throughput, a 14% increase from 2020.

“The cargo forecast remains strong through the balance of this year. This year’s peak [season] looks a lot like it has over the last 12 months: unrelenting consumer demand, imports competing for space and empties across the board,” Seroka said.

Container imports at the nation’s 10 largest ports increased 14.3% year-over-year in July, according to The McCown Report. July traffic was also up 12.3% compared to July 2019, a subdued but more normal freight market.

The NRF reported that retail container imports increased 35.6% year-over-year to 12.8 million TEUs during the first half of 2021. The bloated growth comp benefited from a sharp decline in freight demand at the pandemic’s onset as many sectors of the economy shut down or operated at reduced output levels for months.

Chart: (SONAR: CSTM.USA). The seven-day moving average of customs data shows the robust year-over-year comps recorded over the past year are flattening as the container surge that started last August is lapped.

Railroads dispute claims that poor service is tied to PSR

On the surface transportation side, many of the supply chain’s woes have been laid at the feet of the railroads. The railroads, however, are pushing back on the narrative.

At the Deutsche Bank 2021 Transportation Conference, management from Union Pacific told investors that in addition to a huge influx of containers landing on the West Coast, a lack of capacity in the terminals was the reason for service issues. Jennifer Hamann, EVP and CFO, pointed to “things beyond our network” like shortages of drivers and chassis as the culprits behind trains being delayed.

“Dray capacity is still an issue,” Hamann said. “That very much is an issue on the international side in particular, but to a lesser extent on the domestic side. I would say the domestic issue … is more the chassis.” She pointed to roughly 2,000 containers still stuck in stacks because UP doesn’t have the chassis needed to put them into service.

In July, the railroad suspended international container movements from West Coast ports headed inbound to Chicago for one week to allow the network time to catch up. BNSF Railway also made a similar decision to limit traffic.

Chart: (SONAR: IRAILINTL.CHI). Total loaded inbound international rail container volume to Chicago.

At his monthly press conference, Seroka said UP had 25 miles of trains and BNSF had 22 miles of trains sitting outside of facilities near Chicago at the time of the service pauses. He also noted that rail dwell time at the Port of Los Angeles has worsened to more than 13 days, which is a record.

UP’s intermodal volumes are down 5% year-over-year in the third quarter and down sequentially from the second quarter as well. Hamann said declines in parcels from an e-commerce surge a year ago are hurting the comp.

UP began recalling crews this year when volumes improved, but July Surface Transportation Board employment stats show the railroad’s employee count was down 2.8% year-over-year in the latest month.

The company ended the second quarter with just north of 30,000 full-time employees, its “lowest number of FTEs in the last 15 years,” and well off the 42,000 mark recorded in 2018. By comparison, average weekly volumes are down just mid-single digits compared to a 28% reduction in headcount over the same period.


In addition to volume declines, precision scheduled railroading and other efficiency initiatives have been the primary driver of the labor reduction. Management expects headcount to remain near current levels and said as volumes come back, it will add employees but not on a one-to-one basis.

Hamann said the objective is to build the most efficient rail network in North America while growing volumes. She said PSR efforts are not to blame for declining service on the railroads, noting that key performance indicators like miles per car and the percentage of boxes and cars arriving on time have actually seen mid-single-digit percentage increases from two years ago. 

“PSR is going to support our ability to do those things, not hinder them,” Hamann added.

The company’s current guidance calls for 7% volume growth in 2021. Declines in recent weeks (total third-quarter volumes flat year-over-year but down mid-single digits sequentially) are clouding the path to the target. Improving auto production and agricultural shipments as well as improving intermodal fluidity are expected to bridge the gap “in the coming weeks.”

Rail service issues are far from isolated to UP and the West Coast. 

Significant equipment and labor headwinds have been seen in the East Coast ports of New York and New Jersey as well as Savannah, Georgia, resulting in growing queues of late. Railroads have been diverting containers to inland intermodal terminals in efforts to increase capacity and address the congestion.

In a separate appearance at the Deutsche conference, management from Norfolk Southern said a repair program in place to address a defect on approximately 1,500 chassis has only exacerbated intermodal equipment shortages. The company will have 75% of the repair work done by the end of August and said it plans to begin taking delivery of an additional 1,100 chassis at the beginning of the year to address the shortfall.

The railroad was later than others to adopt a PSR initiative. However, since the launch of its TOP21 operating plan in the third quarter of 2019, it too has leveraged headcount. Gross ton miles per employee have increased 22% in that time.


J.B. Hunt is hopeful for improvement but not guiding to it

J.B. Hunt Transport Services plans to take delivery of 3,000 to 4,000 intermodal containers during the third quarter (12,000 in total over time) to ease network congestion. However, the fix is unlikely to be meaningfully impactful in the near term.

Asked at the same conference if intermodal loads could be flat year-over-year during the third quarter, Brad Delco, VP of finance and investor relations, provided some caution. He said the midquarter additions would only add approximately 8,200 loads (assuming the recent monthly run rate of 1.65 loads per container) to the 500,000 it handled during the second quarter. 

“Compare that to a year ago [530,000 loads], flat may be a little bit optimistic,” Delco added.

Overall intermodal volumes on the U.S. Class I railroads are flat year-over-year so far in the third quarter, down 6% sequentially.

Chart: (SONAR: RTOIC.USA). Rail traffic originated by intermodal containers.

Delco said J.B. Hunt had 70% of its intermodal customer contracts repriced at the end of the second quarter and that the entire book of business will be repriced by the end of the third quarter. He said the rate increases should be reflected on roughly 85% of its intermodal business this quarter, which will drive revenue per load higher again. The metric was up 15% year-over-year in the second quarter.

But as intermodal pricing steps higher, so have the costs associated with operating a network stressed by overwhelming demand and prolonged delays.

J.B. Hunt has been enforcing assessorial charges more strictly on customers that are turning boxes too slowly. But Delco said there has been little evidence that the fees are working, as some customers are turning containers quicker while others have fallen further behind.

Earlier in the year, the company guided to sequential quarterly margin improvement in the segment as rate increases take hold. J.B. Hunt achieved that goal in the first two quarters of the year. Delco said intermodal margins should continue to improve as revenue per load increases. But cost inflation presents some headwinds as extra miles are being driven by extra drivers to reposition equipment and meet the company’s commitments to customers.

“Congestion is still bad, still hard attracting and retaining drivers,” Delco said. “I could tell you pricing is going to get better, but our costs are also going to get more challenging and how that shakes out will ultimately determine where margins shake out for Q3.”

The market is ripe for intermodal conversion. High fuel prices, extremely tight truck capacity and sky-high truckload rates would typically have shippers fleeing truck markets in favor of rail. But the opposite is occurring as the intermodal complex remains bogged down.

“We’re going to have more containers, we’re still working with customers and we’re still working with the rails to get better fluidity,” Delco said.

Chart: (SONAR: IMCSIF.USA). The intermodal cost savings index shows the cost difference between truck and rail has increased. The blue shaded area represents final reporting (eight-week lag). The orange line (SONAR: IMCSI1.USA) displays initial reporting (two-week lag).
Tyler Durden Mon, 08/23/2021 - 18:00

Read More

Continue Reading


NIH Doctor Flagged Wuhan Virus Lab Safety Problems As Early As 2017

NIH Doctor Flagged Wuhan Virus Lab Safety Problems As Early As 2017

Authored by Tom Ozimek via The Epoch Times,

A doctor working for the…



NIH Doctor Flagged Wuhan Virus Lab Safety Problems As Early As 2017

Authored by Tom Ozimek via The Epoch Times,

A doctor working for the U.S. government in 2017 visited the China-based virus research facility that may have leaked the pathogen that causes COVID-19, and sounded the alarm on safety issues at the lab earlier than previously reported, according to documents obtained by The Epoch Times.

Dr. Ping Chen, who worked for the National Institute of Allergy and Infectious Diseases (NIAID), visited the Wuhan Institute of Virology (WIV) in October 2017 and prepared a report for her superiors after her visit.

While a version of her report obtained by a Freedom of Information Act (FOIA) request was fully redacted, Sen. Ron Johnson (R-Wis.) and his team were granted an opportunity to carry out an in-camera review of the report that had some of the redactions removed.

“It is clear to me by talking to the technician that certainly there is a need for training support” at the Wuhan lab, Dr. Chen wrote in the report, parts of which were attached to a letter sent by Mr. Johnson to Department of Health and Human Services (HHS) Secretary Xavier Becerra on Sept. 21.

The letter, which was obtained by The Epoch Times, includes fragments of Dr. Chen's report and suggests that HHS and the U.S. National Institutes of Health (NIH) were aware of safety issues at the Wuhan facility as early as October 2017.

The P4 laboratory on the campus of the Wuhan Institute of Virology in Wuhan, Hubei Province, China, on May 13, 2020. (Hector Retamal/AFP via Getty Images)

Earlier reporting based on two State Department cables and correspondence records obtained by Judicial Watch indicate that NIH was made aware of safety problems at the Wuhan lab in 2018, the year after Dr. Chen's report.

“I think the institute would welcome any help and technical support by NIAID,” Dr. Chen wrote in her 2017 report.

Mr. Johnson wrote in his letter to Mr. Becerra that Dr. Chen's 2017 report partially served as the basis for a Jan. 19, 2018, State Department cable that raised safety concerns about the Wuhan virus lab.

Evidence suggests that SARS-CoV-2, the virus that causes COVID-19, leaked from the Wuhan facility before spreading across the world. According to the so-called lab leak theory, the deadly pathogen that caused the pandemic escaped the Chinese facility, which was conducting risky gain-of-function research on bat coronaviruses that was partially funded by U.S. taxpayer dollars.


Mr. Johnson demanded that HHS provide a version of Dr. Chen's 2017 report that contains fewer redactions in order to scrutinize its contents more closely and determine how closely it aligned with the cable.

“In the public FOIA document, HHS redacted Dr. Chen’s entire report claiming that it contains privacy and deliberative information,” Mr. Johnson wrote.

“It seems apparent that the only reason that HHS redacted this information was to hide the report’s contents from the American people. Perhaps HHS did not want the public to fully understand the fact that NIH and NIAID officials were aware of safety concerns at the WIV dating as far back as 2017,” he added.

Mr. Johnson also accused NIH and HHS of obstructing his probe.

"HHS and NIH continue to obstruct my oversight efforts," he wrote. "It is unacceptable that HHS and NIH had Dr. Chen's report in its possession and only provided a slightly less redacted version for my staff to review in camera."

He demanded that HHS provide unredacted copies of Dr. Chen's report and all documents and communications relating to the report and to the Wuhan lab.

Mr. Johnson also asked for Dr. Chen to sit before a congressional panel and testify.

He set an Oct. 5 deadline for HHS to comply with his request.

HHS officials didn't immediately respond to a request by The Epoch Times for comment.

Chinese virologist Shi Zhengli is seen inside the P4 laboratory in Wuhan, China, on Feb. 23, 2017. (Johannes Eisele/AFP via Getty Images)

'Preponderance of Evidence' for Lab Leak

In August 2021, a report by Republican lawmakers noted a "preponderance of evidence" that the virus that caused the COVID-19 pandemic leaked from the Wuhan lab.

Chinese officials have denied the lab leak claim, insisting that the virus made a natural jump from animals to humans.

Rep. Michael McCaul (R-Texas) said in testimony before the Coronavirus Select Subcommittee Republicans that evidence points to a lab leak as the likely origin of the virus, saying that "it's time to completely dismiss the wet market as the source of the outbreak" and "the preponderance of the evidence that it came from the lab is very convincing."

U.S. intelligence agencies later said in a report that a natural origin and a lab leak are both plausible hypotheses but that a lack of evidence makes a definitive conclusion either way impossible.

It's a sentiment echoed by Mr. McCaul in his testimony.

"Unfortunately, we may never know for certain because the Chinese Communist Party went to great lengths to cover up this outbreak," he said. "They detained the doctors in order to silence them. They disappeared journalists. They destroyed lab samples. They hid the fact there was clear evidence of human-to-human transmission. And they have refused to allow a real investigation into the origins."

Wuhan Lab Funding Controversy

The U.S. Agency for International Development awarded a total of $1.1 million to the WIV between October 2009 and May 2019, the agency wrote in a May 2021 letter (pdf) to Rep. Guy Reschenthaler (R-Pa.).

Mr. Reschenthaler alleged that the funding was used for a study that used gain-of-function research to create "a hybrid, man-made virus by inserting a spiked protein from a wild coronavirus into a mouse-adapted SARS-CoV backbone, which could infect human airways."

The agency said the funds were channeled through EcoHealth Alliance and were meant for the purpose of advancing research on critical viruses that could pose a threat to humans. It also denied claims that the money was used for gain-of-function research, which seeks to boost viral lethality for the purpose of studying it.

In June 2022, the House Appropriations Committee approved a ban on sending any further funding to the Wuhan Institute of Virology.

More recently, the NIH quietly removed the WIV from a list of foreign facilities that are eligible to receive U.S. taxpayer funds to conduct animal experiments.

Tyler Durden Thu, 09/28/2023 - 19:40

Read More

Continue Reading


Fauci And The CIA: A New Explanation Emerges

Fauci And The CIA: A New Explanation Emerges

Authored by Jeffrey A. Tucker via Brownstone Institute,

Jeremy Farrar’s book from August 2021…



Fauci And The CIA: A New Explanation Emerges

Authored by Jeffrey A. Tucker via Brownstone Institute,

Jeremy Farrar’s book from August 2021 is relatively more candid than most accounts of the initial decision to lock down in the US and UK. “It’s hard to come off nocturnal calls about the possibility of a lab leak and go back to bed,” he wrote of the clandestine phone calls he was getting from January 27-31, 2020. They had already alerted the FBI and MI5. 

“I’d never had trouble sleeping before, something that comes from spending a career working as a doctor in critical care and medicine. But the situation with this new virus and the dark question marks over its origins felt emotionally overwhelming. None of us knew what was going to happen but things had already escalated into an international emergency. On top of that, just a few of us – Eddie [Holmes], Kristian [Anderson], Tony [Fauci] and I – were now privy to sensitive information that, if proved to be true, might set off a whole series of events that would be far bigger than any of us. It felt as if a storm was gathering, of forces beyond anything I had experienced and over which none of us had any control.”

At that point in the trajectory of events, intelligence services on both sides of the Atlantic had been put on notice. Anthony Fauci also received confirmation that money from the National Institutes of Health had been channeled to the offending lab in Wuhan, which meant that his career was on the line. Working at a furious pace, the famed “Proximal Origin” paper was produced in record time. It concluded that there was no lab leak. 

In a remarkable series of revelations this week, we’ve learned that the CIA was involved in trying to make payments to those authors (thank you whistleblower), plus it appears that Fauci made visits to the CIA’s headquarters, most likely around the same time. 

Suddenly we get some possible clarity in what has otherwise been a very blurry picture. The anomaly that has heretofore cried out for explanation is how it is that Fauci changed his mind so dramatically and precisely on the merit of lockdowns for the virus. One day he was counseling calm because this was flu-like, and the next day he was drumming up awareness of the coming lockdown. That day was February 27, 2020, the same day that the New York Times joined with alarmist propaganda from its lead virus reporter Donald G. McNeil

On February 26, Fauci was writing: “Do not let the fear of the unknown… distort your evaluation of the risk of the pandemic to you relative to the risks that you face every day… do not yield to unreasonable fear.”

The next day, February 27, Fauci wrote actress Morgan Fairchild – likely the most high-profile influencer he knew from the firmament – that “be prepared to mitigate an outbreak in this country by measures that include social distancing, teleworking, temporary closure of schools, etc.”

To be sure, twenty-plus days had passed between the time Fauci alerted intelligence and when he decided to become the voice for lockdowns. We don’t know the exact date of the meetings with the CIA. But generally until now, most of February 2020 has been a blur in terms of the timeline. Something was going on but we hadn’t known just what. 

Let’s distinguish between a proximate and distal cause of the lockdowns.

The proximate cause is the fear of a lab leak and an aping of the Wuhan strategy of keeping everyone in their homes to stop the spread. They might have believed this would work, based on the legend of how SARS-1 was controlled. The CIA had dealings with Wuhan and so did Fauci. They both had an interest in denying the lab leak and stopping the spread. The WHO gave them cover. 

The distal reasons are more complicated. What stands out here is the possibility of a quid pro quo. The CIA pays scientists to say there was no lab leak and otherwise instructs its kept media sources (New York Times) to call the lab leak a conspiracy theory of the far right. Every measure would be deployed to keep Fauci off the hot seat for his funding of the Wuhan lab. But this cooperation would need to come at a price. Fauci would need to participate in a real-life version of the germ games (Event 201 and Crimson Contagion). 

It would be the biggest role of Fauci’s long career. He would need to throw out his principles and medical knowledge of, for example, natural immunity and standard epidemiology concerning the spread of viruses and mitigation strategies. The old pandemic playbook would need to be shredded in favor of lockdown theory as invented in 2005 and then tried in Wuhan. The WHO could be relied upon to say that this strategy worked. 

Fauci would need to be on TV daily to somehow persuade Americans to give up their precious rights and liberties. This would need to go on for a long time, maybe all the way to the election, however implausible this sounds. He would need to push the vaccine for which he had already made a deal with Moderna in late January. 

Above all else, he would need to convince Trump to go along. That was the hardest part. They considered Trump’s weaknesses. He was a germaphobe so that’s good. He hated Chinese imports so it was merely a matter of describing the virus this way. But he also has a well-known weakness for deferring to highly competent and articulate professional women. That’s where the highly reliable Deborah Birx comes in: Fauci would be her wingman to convince Trump to green-light the lockdowns. 

What does the CIA get out of this? The vast intelligence community would have to be put in charge of the pandemic response as the rule maker, the lead agency. Its outposts such as CISA would handle labor-related issues and use its contacts in social media to curate the public mind. This would allow the intelligence community finally to crack down on information flows that had begun 20 years earlier that they had heretofore failed to manage. 

The CIA would hobble and hamstring the US president, whom they hated. And importantly, there was his China problem. He had wrecked relations through his tariff wars. So far as they were concerned, this was treason because he did it all on his own. This man was completely out of control. He needed to be put in his place. To convince the president to destroy the US economy with his own hand would be the ultimate coup de grace for the CIA. 

A lockdown would restart trade with China. It did in fact achieve that. 

How would Fauci and the CIA convince Trump to lock down and restart trade with China? By exploiting these weaknesses and others too: his vulnerability to flattery, his desire for presidential aggrandizement, and his longing for Xi-like powers over all to turn off and then turn on a whole country. Then they would push Trump to buy the much-needed personal protective equipment from China. 

They finally got their way: somewhere between March 10 or possibly as late as March 14, Trump gave the go ahead. The press conference of March 16, especially those magical 70 seconds in which Fauci read the words mandating lockdowns because Birx turned out to be too squeamish, was the great turning point. A few days later, Trump was on the phone with Xi asking for equipment. 

In addition, such a lockdown would greatly please the digital tech industry, which would experience a huge boost in demand, plus large corporations like Amazon and WalMart, which would stay open as their competitors were closed. Finally, it would be a massive subsidy to pharma and especially the mRNA platform technology itself, which would enjoy the credit for ending the pandemic. 

If this whole scenario is true, it means that all along Fauci was merely playing a role, a front man for much deeper interests and priorities in the CIA-led intelligence community. This broad outline makes sense of why Fauci changed his mind on lockdowns, including the timing of the change. There are still many more details to know, but these new fragments of new information take our understanding in a new and more coherent direction. 

Jeffrey A. Tucker is Founder and President of the Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

Tyler Durden Thu, 09/28/2023 - 17:40

Read More

Continue Reading


Watch: Biden Tells People To Stop Questioning COVID Shots

Watch: Biden Tells People To Stop Questioning COVID Shots

Authored by Steve Watson via Summit News,

In remarks made Wednesday, Joe Biden…



Watch: Biden Tells People To Stop Questioning COVID Shots

Authored by Steve Watson via Summit News,

In remarks made Wednesday, Joe Biden argued that people, including potential “leaders” should stop saying “inflammatory things” about COVID vaccinations and fall into line with what his administration is telling them to do.

“What leaders say matter, in terms of people’s confidence in things they’re not sure about,” biden began.

He continued, “And one of those areas — you saw what happened with regard to the crisis — health crisis that we had that cost us — we lost well over a million people. And as time began to move on, you had more and more voices saying, “No, no, no. You don’t need to get that shot. You don’t need to be — get — you don’t need to.”

“We have a new strain of COVID now, and we have answers for it,” Biden contended, further stating “I just would urge those in public life and both political parties or no political party to be cautious about the ac- — the sometimes inflammatory things you say about this, because people’s lives are at stake.”


That will be the COVID shots that don’t prevent anyone from getting COVID or stop transmission of the virus then will it? The ones that cause more serious side effects in children than they do save lives?

The comments come in the wake of revelations that Anthony Fauci was secretly escorted into CIA and State Department meetings to steer the direction of the COVID origins investigation away from the lab leak evidence.

*  *  *

Brand new merch now available! Get it at

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support my sponsor – Summit Vitamins – super charge your health and well being.

Also, we urgently need your financial support here.

Tyler Durden Thu, 09/28/2023 - 17:00

Read More

Continue Reading