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The Station: Rounding up the Tesla Cyber Roundup, a Waymo change up and the mysterious disappearance of Bolt Mobility

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every weekend in…

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The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive it every weekend in your inbox.

Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B. This week it’s a dual-hosted event with transportation editor Kirsten Korosec and transportation reporter Rebecca Bellan steering the ship, er, car.

One story that deserves your attention is the mystery around Bolt Mobility.

Bolt Mobility appears to have ceased operations and vanished into the ether, leaving behind dead vehicles and unanswered calls in at least eight U.S. markets

Representatives from affected cities told TechCrunch they haven’t been able to get ahold of anyone from Bolt, including the company’s CEO Ignacio Tzoumas. In addition to reaching out to as many cities where Bolt had, until recently, been running a service, Rebecca also made multiple attempts to reach Bolt staff members and its investors — to no avail. Even Bolt’s customer service line doesn’t appear to be staffed. 

It’s all very mysterious. Bolt had appeared to be on an upward trajectory last year after acquiring the assets of Last Mile Holdings, which opened up 48 new markets to the micromobility operator. The company also had some recent undisclosed investment, which ostensibly could have tided Bolt over long enough to, at the very least, remove its vehicles from the streets and properly dispose of or recycle them. 

So what gives? We’re still working that one out, but Alex Wilhelm and Annie Saunders have been pondering the effect that asset depreciation can have on startups like Bolt. For example, we’ve seen with Bird just how lackluster the economics of running shared scooter companies are just from an operations perspective. Wilhelm and Saunders write:

When the cost of vehicle depreciation was factored into its business…it was hugely gross-margin-negative. So, its cash was going into not only operations but funding a huge fleet of gear. Gear that it had to design, manufacture, ship and market in an effort to make its money back. It never quite worked. 

Alrighty then, onward!

You can also email us at kirsten.korosec@techcrunch.com and rebecca.techcrunch@gmail.com to share thoughts, criticisms, opinions, or tips. You also can send a direct message to @kirstenkorosec

Micromobbin’

A word on safety.

I keep seeing reports of emergency room visits for e-scooter riders. My initial reaction to news of e-scooter accidents was to blame cars for ruling the roads and cities for not providing enough safe bike lanes. However, there’s also space to push micromobility companies to provide more protections. 

In Denver, a rider simply reached up to adjust her glasses and before she knew it was flatlined with a head injury. An easy mistake to make, and one I can see myself making.

Sturdier scooters and helmets offered with all shared micromobility vehicles could make an appreciable difference.

I live in Auckland, where Neuron, Beam and Lime run a service. Neuron and Beam both have helmets attached to their scooters, so it can be done, whereas Lime, for whatever reason, does not. In fact, most scooter companies don’t offer helmets. Instead, they promise to improve safety by spending lord-knows-how-much on computer vision technology to keep riders off sidewalks. 

In other news…

Electric moped growth is predicted to double in Asia

Google Maps is now providing route information updates to cyclists

India is finalizing its national battery swap program for two- and three-wheeled EVs. 

Joyride, a micromobility software provider, has opened up a hardware marketplace to help operators build up their fleets.

— Rebecca Bellan

A little bird

blinky cat bird green

We hear things and we share the tidbits that we can verify.

There is some executive movement over in Waymo land.

Dan Chu, Waymo’s chief product officer, has left the Alphabet subsidiary, according to a few folks in the know (and later confirmed by Waymo). Chu has been at Waymo for eight years and 14 years at Alphabet.

Waymo confirmed Chu’s departure and said he was moving onto a new “professional opportunity in the health tech industry.” The company said Chu was staying on through mid-September “to ensure a smooth transition.”

“We’re grateful to Dan for his product leadership and vision, having helped us launch Waymo One, Waymo Via, and build a world-class Product team,” the company said in a statement.

It appears that Waymo already has a replacement in mind. Saswat Panigrahi, who joined Waymo in 2016 and was most recently vice president of strategy, product management and data science, is taking the CPO spot.

“Panigrahi has been with Waymo for almost six years in a variety of product leadership roles, managing our engineering and commercial roadmaps across ride hailing, long haul trucking and local delivery,” the statement continued.

During his time at Waymo, Panigrahi has been a part of launching the first fully autonomous public commercial service in Phoenix and the start of fully autonomous operations in San Francisco, the company said, adding that prior to joining Waymo he was with Google for four years as senior product manager working on Chrome Browser, Chromebooks and Android.

Deal of the week

money the station

Looks like there’s a new micromobility SPAC on the market, and we’re trying not to cringe. Galata Acquisition Corp., a special purpose acquisition company led by Callaway Capital with $146.6 million in trust, has announced plans to merge with Marti Technologies, a micromobility app in Turkey that operates a fleet of over 46,000 e-mopeds, e-bikes and e-scooters. Marti will use the funds from the IPO to strengthen its position in Turkey by deploying additional vehicles across existing and new modalities. 

Given the performance of other micromobility companies that have gone public via SPAC – AKA Bird and Helbiz – it’s actually surprising to see Marti decide to go public on the same route, particularly so when many other startups are shunning the public markets until things heat up again. 

Other deals that got my attention …

Boatsetter, the Airbnb of renting boats, secured a $38 million Series B round.

Canyon Bikes is getting $30 million to fund its U.S. expansion from LeBron James, who apparently is an avid cyclist.

Hyundai is considering acquiring the remaining stake in 42dot, a South Korea-based lidar-free autonomous mobility platform. 

Mobiv Acquisition, a blank-check company led by Peter Bilitsch targeting the electric vehicle industry in Asia and Europe raised $87 million in an IPO.

Nexar, the Israeli dash cam data company, is acquiring Veniam, an IoT company that transfers data from cars to the cloud with its connected vehicle mesh network. 

Nikola agreed to acquire Romeo Power in an all-stock $144 million deal, giving the company control over a key part of its supply chain.

Orange EV raised $35 million in a round led by S2G Ventures and CCI to accelerate the adoption of electric yard trucks. 

Ottonomy.IO, the autonomous robotics delivery startup, raised $3.3 million in a seed round led by Pi Ventures. The company has raised $4.9 million to date. Connetic Ventures and Branded Hospitality Ventures and Sangeet Kumar, founder and CEO of Addverb Technologies also joined this round.

River, a Bangalore-based startup that makes electric two-wheelers, has closed an $11 million Series A. The round, which was led by Chris Sacca’s Lowercarbon Capital in participation with Toyota Ventures and existing investors Maniv Mobility and Trucks VC, will help the young company set up a manufacturing facility and get its first product ready for sale by early 2023. River has the potential to be a leader in the Indian market, given the government’s plans to push EV sales penetration of two-wheelers up to 80% by 2030.

Notable reads and other tidbits

Autonomous vehicles

Argo AI launched a safety advisory council, an external group of safety experts to help the company advance its autonomous mission and build trust with the public. The council is stacked with some of the best in safety, including former National Transportation Safety Board Chairman Robert Sumwalt, TransSafe Consulting CEO Annette Sandberg, who once led the Federal Motor Carrier Safety Administration and Christopher Doss, the senior managing director of cybersecurity at Ankura and former Assistant Director of the Federal Bureau of Investigation.

Aurora Innovation announced a multiphase commercial pilot to haul freight for Schneider National’s customers in Texas

Embark conducted a public demo to show how its autonomous trucks would interact with emergency vehicles and law enforcement in Texas. 

Innoviz will be supplying its lidar sensors and perception software to all Volkswagen group vehicles with automated driving capabilities. 

Pony.ai is suing two former employees who left to start their own autonomous trucking companies over alleged trade secret infringement. 

Electric vehicles

GreenPower Motor Company announced the first delivery of its EV Star Cab and Chassis to Workhorse for the production of the latter’s van line which is expected to enter production later this year. 

Lamborghini wants to wait and see what kinds of policies the European Union will enforce on ICE vehicles before deciding to go all in on EVs. 

Tesla shareholders approved a three-to-one stock split, but they rejected proposals to improve annual reporting on things like racial, sexual and gender harassment and discrimination, lobbying, water risk and use of child labor in the supply chain. Check out other key takeaways from Tesla’s Cyber Roundup

Speaking of Tesla, Mark Harris, who also writes for TechCrunch, just wrapped up a series on Tesla data for IEEE Spectrum. The Radical Scope of Tesla’s Data Hoard, Tesla’s Autopilot Depends on a Deluge of Data and Who Actually Owns Tesla’s Data? Check it out.

And the final item on the Tesla front, the California DMV has accused Tesla of falsely advertising its FSD beta software, reported the LA Times.

Volkswagen said it would offer a cheaper version of its ID.4 electric compact SUV, with a smaller battery pack, that starts at $37,495 before federal tax credits (and not including the $1,295 destination fee).

Xpeng’s July sales results are in. The Chinese EV company sold 11,524 Smart EVs. While that’s up 43% YoY, it’s down from 15,295 vehicles delivered in June. The breakdown looks like: 6,397 P7 sports sedans, 3,608 P5 smart family sedans and 1,519 G3i smart compact SUVs. In August, Xpeng will accept reservations for its new G9 SUV followed by an official launch in September.

Earnings

Aurora Innovation pushed back the deployment timeline of its commercial autonomous trucking platform. The company closed out Q2 with “collaboration revenue,” which isn’t actually revenue, of $20.7 million and a massive net loss of $1.2 billion.

Fisker said it now has more than 56,000 reservations for the Ocean electric SUV, of which it has 55 prototypes built, and is on track to start production November 17. Despite the promise of revenue in the future, the luxury EV startup closed the second quarter with pretty much no revenue to speak of, a loss per share of $0.36 and a net loss of $106 million, which is down from the $122.1 million loss reported in Q1. 

Lordstown Motors reported its first quarterly operating profit of $61.3 million. The embattled EV company still hasn’t delivered any vehicles, so these gains are largely related to the sale of its Ohio factory to Foxconn. The company reaffirmed plans to begin commercial production of its first vehicle this quarter and roll out customer deliveries by the end of 2022. 

Lucid Motors slashed its annual production guidance in half due to supply chain and logistics issues. The luxury EV company had originally planned to produce 20,000 Air sedans this year. In February, that number got cut down to 12,000 to 14,000. This week, Lucid said it could maybe deliver 6,000 to 7,000. The company reported $97.3 million in revenue for the second quarter, missing analyst expectations, and an adjusted net loss of $414 million.

Lyft reported record earnings in the second quarter, with revenues of $990.7 million. Net loss for the quarter was $377.2 million. The company’s shares were up 4.07% in after hours trading, after the company convinced investors it was able to offset the costs of increased investments in drivers by cost-cutting internally and taking advantage of a post-COVID travel boom.

Nikola reported $18.1 million in revenues on deliveries of 48 Tre BEVs and four mobile charging trailers. The EV maker, which is trying to move past its tumultuous and troubled past, closed out the quarter with a net loss of $173 million and total liquidity of $841.8 million. The company also announced the locations of three California hydrogen stations to help it scale up its long-term hydrogen distribution solutions. 

TuSimple reported a $2.6 million revenue, which was up 73% YoY but missed Wall Street expectations drastically. The self-driving trucking company used the earnings call to address a recent crash of one of its test trucks, in which the truck suddenly veered across the I-10 highway in Tuscon and slammed into a concrete barricade.  

Uber came out the gate swinging with its Q2 earnings, during which the company reported revenues of $8.1 billion, up 105% from last year. Gross bookings rose 33% to $29.1 billion from $21.9 billion a year ago. The company finished out the quarter with positive free cash flow, meaning it can now, finally, self-fund. Uber’s shares were up 14.4% after the company reported earnings. 

Another tidbit: Uber also sold its 7.8% stake in food delivery company Zomato for over $390 million. 

Miscellaneous 

General Motors will soon allow drivers to use Super Cruise on more than 400,000 miles of road in the U.S. and Canada, which will double the geographic access to the hands-free driver assistance system.

GM Future Roads and Inrix are offering “Safety View” to transport planners nationwide. The product is a cloud-based application that provides transportation officials with critical insights using crash, vehicle, vulnerable road user and U.S. census data to help prioritize and measure how effective roadway safety projects are and what their impact on communities is. 

The two entities also launched a research report that focuses on Washington, D.C. schools. They found more speeding, as well as crashes, to occur around low-income schools than high-income schools; traffic signs didn’t have a large effect on speeding; the built environment is a larger factor in vehicle speeds than signage or specific operating times of school zones. 

NYC’s daily subway ridership is still significantly below pre-pandemic levels, according to Observable, a data vis startup that worked with Microsoft and Oxford University to create a fun interactive of the data

Uber Freight published a white paper that finds for commercializing autonomous trucking in the near-term, the hub-to-hub model is the most practical and economically feasible starting point. The white paper also found, perhaps unsurprisingly, that autonomous trucks will fill job gaps rather than replace human drivers. 

UFODrive has launched its electric vehicle rental service in San Francisco. The European company offers both EV rentals and subscriptions, and plans to expand to Austin and New York this year, as well. 

U.S. Department of Transportation and Energy announced that all 50 states, D.C. and Puerto Rico have submitted EV infrastructure deployment plans as required under the National Electric Vehicle Infrastructure Formula Program under Biden’s infrastructure bill. The plans will unlock the first round of $5 billion funding available over the next five years to help states build out a national charging network. 

Ridehail

TechCrunch got some inside information into how the Lyft layoffs are shaping up since the company shut down its in-house rentals unit. A spoiler: Staff were given 30 days to find a new job within Lyft or be separated from the company, but many are jaded that they weren’t simply placed into new roles and instead have to compete with outsiders. 

Uber is testing adding train and coach travel to its app in the U.K. after a tie-up with Berlin-based multimodal travel platform Omio

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How bonds work and why everyone is talking about them right now: a finance expert explains

Investor confidence in the UK is at a low, and the bond market has reacted dramatically.

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The Bank of England is buying bonds again. Just as it was about to start selling the debt it had accumulated as part of its last effort to support the economy during the COVID-19 pandemic, the central bank has been forced to announce a new scheme to shore up investor confidence.

The bank’s £65 billion short-term spree aims to address the slump in bond prices caused by investors rushing to sell after the government’s recent mini-budget. This led to a surge in bond yields that hiked borrowing costs for the government and spread to pensions, housing and the general economy. So far, it has had a limited initial impact on the markets.

We asked an expert in finance to explain what’s going on in bond markets.

What is a bond and what is the difference between bond prices and yields?

A bond is essentially a tradeable IOU. It’s a loan that investors make to issuers such as companies or governments (UK government bonds are often called gilts). A bond has a price at which it can be sold and a yield, which is an annual amount the investor receives for holding the bond, a bit like interest on a savings account, and is expressed as a percentage of the current price.

When the price of a bond falls, it signals less demand for the bond because fewer investors want to own it. At the same time, the yield rises, which represents a higher cost of borrowing for companies or governments that issued the bond because this is what they have to pay to investors.

In the days since the government’s mini-budget, yields on 10-year Treasury bonds – which are issued by the UK government – increased from approximately 3.5% to 4.52% – the highest since the 2007-2008 global financial crisis. The expectation of continued increases prompted the recent intervention by the Bank of England.

UK government 10-year bond yields

United Kingdom 10-year bond yield. Investing.com / Tradingview

What causes bond yields to move?

To understand this, it is important to bear in mind that, while people often talk about the interest rate, there are actually a number of rates. This includes the rate at which the central bank lends to commercial banks (the base rate), the rate that banks lend to each other (the interbank rate), the rate that the government borrows at (Treasury yields) and the rate at which households and firms borrow (commercial loans and mortgages).

When the Bank of England changes the base rate, this cascades through all these rates. As such, the Bank of England carefully considers the state of the economy – that is, growth and inflation – when deciding on the base rate.

When an economy is growing, interest rates and bond yields tend to rise. The occurs for several reasons. Investors sell bonds to buy riskier assets with better returns. Firms and households also look to borrow more money in a growing economy, for example, to invest in new machinery or to move home. More demand for borrowing means lenders can charge higher interest on their loans.

Higher inflation often accompanies economic growth because of the increase in demand for goods and services. This tightens supply and causes prices to rise (including wages for labour). The Bank of England, which is mandated by the government to try to keep inflation as close to 2% as possible, will respond to higher inflation by raising base rates, which, as noted, feeds through to the different rates.

Investors will often anticipate the increase in base rates and look to act before it goes up by selling Treasury bonds and buying alternative, higher return, assets. This causes bond yields to rise further. As a result, the Treasury bond yield is often seen as a predictor of future Bank of England base rate changes.

So, if yields are rising, does this mean that investors are expecting future economic growth in the UK?

No, not at the moment. When the government raises money by issuing bonds, it does so over a range of time periods (called maturities), from one day to 30 years. When an economy is expected to grow, the yield on longer-term bonds will be higher than the yield on shorter-term bonds.

This relationship between yields across different maturities is referred to as the term structure or yield curve. An upward sloping yield curve implies a growing economy. At the moment, the UK yield curve is flat, or even downward-sloping across some maturities. My research shows that a falling yield curve is a good predictor of a coming recession.

Yield curve for UK government bonds

Line graph showing downward-sloping yield curve for UK gilts
UK gilts 40-year yield curve. *The curve on the day of the previous MPC meeting is provided as reference point. Bloomberg Finance L.P., Tradeweb and Bank of England calculations

It’s important to remember that these different yields act as a benchmark for commercial lending rates of equivalent lengths. The approximate jump to 4.5% in 2-year and 5-year yields has been reflected in mortgage rates, which is why some lenders have pulled available mortgage deals recently while they reassess the lending rates charged to households.


Read more: Is the UK in a recession? How central banks decide and why it's so hard to call it


But if the UK economy is not expected to perform well, why have bond yields been rising after the chancellor’s mini-budget announcement?

The rising bond yields we are seeing relate to an additional factor: the amount of government debt. The mini-budget introduced tax cuts and increased spending and investors know the government will need to increase borrowing to meet these commitments. Some estimates put potential government borrowing at £190 billion due to this plan.

An increase in the amount a homeowner borrows versus the value of their home (called the loan-to-value) causes the mortgage rate charged to the borrower to rise. Similarly, an increase in the amount of bonds that the government will be looking to sell (the amount it wants to borrow) will push down the price of existing bonds, increasing yields. More importantly, more debt without growth raises the risk level of the UK economy.

Anticipating this, investors triggered a large-scale bond sell-off after the government’s mini-budget announcement. This contributed to the fall in the value of the pound as investors selling UK Treasury bonds bought US bonds instead, essentially swapping pounds for dollars.

So will the Bank of England’s plan work?

The intervention will have a short-term positive impact, which started as soon as it was announced. But the bank is really only buying time. Any ultimate success depends on the government restoring investor confidence in its economic plans.

Unfortunately, rising yields and borrowing costs for the UK economy is the price we are now paying for the government’s recent fiscal announcement.

David McMillan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Zika Vaccine Targeting Nonstructural Viral Proteins Found Effective in Mice

UCLA scientists report positive preclinical results on the safety and efficacy of an RNA vaccine (ZVAX) against the mosquito borne Zika virus that severely…

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Positive preclinical results on the safety and efficacy of an RNA vaccine (ZVAX) against the mosquito-borne Zika virus that severely compromises brain development in children of infected mothers, were published in the journal Microbiology Spectrum on September 28, 2022 “Replication-Deficient Zika Vector-Based Vaccine Provides Maternal and Fetal Protection in Mouse Model.” The investigators tested the vaccine in pregnant mice and report the vaccine prevents systemic Zika infection in both mothers and developing fetuses.

“The ongoing COVID-19 pandemic has shown us the power of a strong pandemic preparedness plan and clear communication about prevention methods—all culminating in the rapid rollout of safe and reliable vaccines,” said senior author of the study, Vaithilingaraja Arumugaswami, DVM, PhD, an associate professor of molecular and medical pharmacology at the University of California, Los Angeles (UCLA). “Our research is a crucial first step in developing an effective vaccination program that could curb the spread of Zika virus and prevent large-scale spread from occurring.”

Vaithilingaraja Arumugaswami, DVM, PhD, an associate professor of molecular and medical pharmacology at the University of California, Los Angeles (UCLA) is a co-senior author of the study.

Engineering the vaccine

The experimental vaccine is composed of RNA that encodes nonstructural proteins found within the pathogen that trigger an immune response against the virus.

Arumugaswami said, “Engineering the vaccine involved deleting the part of the Zika genome that codes for the viral shell. This modification both stimulates an immunogenic reaction and prevents the virus from replicating and spreading from cell to cell.”

Eliminating structural proteins that mutate rapidly to escape the immune system also ensures that the vaccine trains the recipient’s immune system to recognize viral elements that are less likely to alter. The researchers packaged the replication deficient Zika vaccine particles in human producer cells and verified antigen expression in vitro.

Nikhil Chakravarty, a co-author of the study and student at the UCLA Fielding School of Public Health
oversaw data analysis and writing of the manuscript.

“We deleted not just the gene responsible for encoding the capsid, but also those encoding the viral envelope and membrane. This vaccine is replication-deficient—it cannot spread among cells,” said co-author of the study, Nikhil Chakravarty, a master’s student at the UCLA Fielding School of Public Health.

Chakravarty clarified, “The deletion itself does not lead to stimulation of immune response but it makes this vaccine safer by rendering it replication deficient. The nonstructural proteins encoded by the RNA packaged in the vaccine stimulate more of a T-cell immune response that can specifically recognize Zika-infected cells and prevent viral replication and the spread of infection.”

The team showed increased effector T cell numbers in vaccinated versus unvaccinated mouse models. Using mass cytometry, the researchers showed high levels of splenic CD81 positive T cells and effector memory T cell responses and low levels of proinflammatory cell responses in vaccinated animals, suggesting that endogenous expression of the nonstructural viral proteins by the vaccine induced cellular immunity. There were no changes in antibody mediated humoral immunity in the vaccinated mice.

Co-author Gustavo Garcia, Jr., oversaw and conducted much of the experimentation reported in the study.

“We saw complete protective immunity against Zika virus in both pregnant and nonpregnant animals, speaking to the strength and utility of our vaccine candidate,” said Chakravarty. “This supports the deployment of this vaccine in pregnant mothers—the population, perhaps, most at need—upon further clinical evaluation. This would help mitigate some of the socioeconomic fallout from a potential Zika outbreak, as well as prevent neurological and developmental deficits in Zika-exposed children.”

The investigators administered the RNA vaccine using a prime-boost regimen where an initial dose was followed up by a booster dose. To estimate the durability of the vaccine, the researchers monitored the mice for a month-and-a-half, which is equivalent to approximately seven years in humans.

Chakravarty said, “Since the vaccine is geared toward stimulating T-cell response, we anticipate it will induce longer-lasting immunity than if it were just stimulating antibody immune response.”

Pandemic preparedness

The global Zika outbreak in 2016, led to efforts in developing effective therapies and vaccines against the virus. However, no vaccines or treatments have been approved for Zika virus yet.

“Other Zika vaccine candidates mainly focused on using structural proteins as immunogens, which preferably stimulates antibody response. Our candidate is unique in that it targets nonstructural proteins, which are more conserved across viral variants, and stimulate T-cell-mediated immunity,” said Chakravarty.

Epidemiological studies have shown that the Zika virus spreads approximately every seven years. Moreover, the habitats of Zika-spreading mosquitoes are increasing due to climate change, increasing the likelihood of human exposure to the virus.

“Given that RNA viruses—the category to which both Zika and the SARS family of viruses belong—are highly prone to evolving and mutating rapidly, there will likely be more outbreaks in the near future,” said Arumugaswami.

Kouki Morizono, MD, PhD, an associate professor of medicine at UCLA is a co-senior author of this study.

“It’s only a matter of time before we start seeing the virus spread again,” said Kouki Morizono, MD, PhD, an associate professor of medicine at UCLA and co-senior author of this study.

Before the vaccine candidate can be tested in humans, the researchers will be test it non-human primate models.

The post Zika Vaccine Targeting Nonstructural Viral Proteins Found Effective in Mice appeared first on GEN - Genetic Engineering and Biotechnology News.

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Butter, garage doors and SUVs: Why shortages remain common 2½ years into the pandemic

The bullwhip effect describes small changes in demand that become amplified as they move down the supply chain, resulting in shortages. The pandemic put…

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Consumers have been seeing empty shelves throughout the pandemic. Diana Haronis/Moment

Shortages of basic goods still plague the U.S. economy – 2½ years after the pandemic’s onset turned global supply chains upside down.

Want a new car? You may have to wait as long as six months, depending on the model you order. Looking for a spicy condiment? Supplies of Sriracha hot sauce have been running dangerously low. And if you feed your cat or dog dry pet food, expect empty shelves or elevated prices.

These aren’t isolated products. Baby formula, wine and spirits, lawn chairs, garage doors, butter, cream cheese, breakfast cereal and many more items have also been facing shortages in the U.S. during 2022 – and popcorn and tomatoes are expected to be in short supply soon.

In fact, global supply chains have been under the most strain in at least a quarter-century, and have been pretty much ever since the COVID-19 pandemic began.

I have been immersed in supply chain management for over 35 years, both as a manager and consultant in the private sector and as an adjunct professor at Colorado State University - Global Campus.

While each product experiencing a shortage has its own story as to what went wrong, at the root of most is a concept people in my field call the “bullwhip effect.”

What is the ‘bullwhip effect’?

The term bullwhip effect was coined in 1961 by MIT computer scientist Jay Forrester in his seminal book “Industrial Dynamics.” It describes what happens when fluctuations in demand reverberate and amplify throughout the supply chain, leading to worsening problems and shortages.

Imagine the physics of cracking a whip. It starts with a small flick of the wrist, but the whip’s wave patterns grow exponentially in a chain reaction, leading to the tip, a snap – and a sharp pain for anyone on the receiving end.

The same thing can happen in supply chains when orders for a product from a retailer, say, go up or down by some amount and that gets amplified by wholesalers, distributors and raw material suppliers.

The onset of the COVID-19 pandemic, which led to lengthy lockdowns, massive unemployment and a whole host of other effects that messed up global supply chains, essentially supercharged the bullwhip’s snap.

How the bullwhip effect works.

Cars and chips

The supply of autos is one such example.

New as well as used vehicles have been in short supply throughout the pandemic, at times forcing consumers to wait as long as a year for the most popular models.

In early 2020, when the pandemic put most Americans in lockdown, carmakers began to anticipate a fall in demand, so they significantly scaled back production. This sent a signal to suppliers, especially of computer chips, that they would need to find different buyers for their products.

Computer chips aren’t one size fits all; they are designed differently depending on their end use. So chipmakers began making fewer chips intended for use in cars and trucks and more for computers and smart refrigerators.

So when demand for vehicles suddenly returned in early 2021, carmakers were unable to secure enough chips to ramp up production. Production last year was down about 13% from 2019 levels. Since then, chipmakers have began to produce more car-specific chips, and Congress even passed a law to beef up U.S. manufacturing of semiconductors. Some carmakers, such as Ford and General Motors, have decided to sell incomplete cars, without chips and the special features they power like touchscreens, to relieve delays.

But shortages remain. You could chalk this up to poor planning, but it’s also the bullwhip effect in action.

The bullwhip is everywhere

And this is a problem for a heck of a lot of goods and parts, especially if they, like semiconductors, come from Asia.

In fact, pretty much everything Americans get from Asia – about 40% of all U.S. imports – could be affected by the bullwhip effect.

Most of this stuff travels to the U.S. by container ships, the cheapest means of transportation. That means goods must typically spend a week or longer traversing the Pacific Ocean.

The bullwhip effect comes in when a disruption in the information flow from customer to supplier happens.

For example, let’s say a customer sees that an order of lawn chairs has not been delivered by the expected date, perhaps because of a minor transportation delay. So the customer complains to the retailer, which in turn orders more from the manufacturer. Manufacturers see orders increase and pass the orders on to the suppliers with a little added, just in case.

What started out as a delay in transportation now has become a major increase in orders all down the supply chain. Now the retailer gets delivery of all the products it overordered and reduces the next order to the factory, which reduces its order to suppliers, and so on.

Now try to visualize the bullwhip of orders going up and down at the suppliers’ end.

The pandemic caused all kinds of transportation disruptions – whether due to a lack of workers, problems at a port or something else – most of which triggered the bullwhip effect.

The end isn’t nigh

When will these problems end? The answer will likely disappoint you.

As the world continues to become more interconnected, a minor problem can become larger if information is not available. Even with the right information at the right time, life happens. A storm might cause a ship carrying new cars from Europe to be lost at sea. Having only a few sources of baby formula causes a shortage when a safety issue shuts down the largest producer. Russia invades Ukraine, and 10% of the world’s grain is held hostage.

The early effects of the pandemic in 2020 led to a sharp drop in demand, which rippled through supply chains and decreased production. A strong U.S. economy and consumers flush with coronavirus cash led to a surge in demand in 2021, and the system had a hard time catching up. Now the impact of soaring inflation and a looming recession will reverse that effect, leading to a glut of stuff and a drop in orders. And the cycle will repeat.

As best as I can tell, these disruptions will take many years to recover from. And as recent inflation reduces demand for goods, and consumers begin cutting back, the bullwhip will again work its way through the supply chain – and you’ll see more shortages as it does.

Michael Okrent does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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