Above the Fold: Supply Chain Logistics News (August 11, 2023)

For the second birthday in a row, I ended up in Urgent Care.

Last year, I woke up in the morning and the room was spinning. Vertigo.

This year, the night before my birthday, I was playing in a championship softball game, and at my first at-bat, I put the ball in play, and the moment I took off running to first base, my right calf seized on me. I hopped on one leg the rest of the way. Severely strained calf.

(We lost the game, too.)

53 is not the new 25 or 35. There’s no tampering with my odometer. I’m more than a half century old. Like a car with over 100,000 miles, stuff is starting to break down.

Despite barely being able to walk, I went to the beach with my wife and two of my kids. It’s an annual tradition, ever since my father died 15 years ago, the day after my 38th birthday.

I don’t know why my father requested for his ashes to be buried at sea, but looking out from my beach chair on the sand, I can almost see him swimming, his head above the water, doggy paddling alone, always parallel to the shore.

I’m older, with a bit more marshmallow in my beard, but in some ways, I still feel like a kid. I don’t know what you call that part of us that doesn’t age, if it even has a name, but it’s the candle on my birthday cake 

that never blows out.

Moving on, here’s the supply chain and logistics news that caught my attention this week:

When It Doesn’t Rain, It Pours Too

When it comes to climate-related supply chain risks and disruptions, the headlines have historically been dominated by hurricanes, snow storms, tsunamis, and floods. Precipitation — and lots of it.

Entering stage right now is droughts.

“The number of vessels waiting to cross the Panama Canal has reached 154, and slots for carriers to book passage are being reduced in an effort to manage congestion caused by ongoing drought conditions that have roiled the major shipping gateway since the spring,” reports Lori Ann LaRocco in CNBC. “The current wait time to cross the canal is now around 21 days.”

Last October, “there were nearly 150 vessels and more than 2,250 barges in a queue to float through stretches of the Mississippi River near Memphis Vicksburg, Mississippi, where traffic jams had ensued” due to low water levels. Drought conditions on the Mississippi persist, as Shannon Najmabadi reports in the Wall Street Journal:

Water levels in St. Louis and Memphis are 10 to 20 feet lower at this point in the year than in 2020 and 2019 due to lack of rain…[Y]ears of drought have depleted the river that courses through 10 states and impeded barges that traverse it carrying goods such as soybeans, corn, chemicals and gas. 

“We’ve really seen this ebb and flow—this dramatic ebb and flow—this last year more than we’ve seen in years past,” said Mike Steenhoek, executive director of the Soy Transportation Coalition, which includes 13 state soybean boards. More than half of soybeans grown in the U.S. are exported, the majority traveling down the lower Mississippi River to the Gulf of Mexico, he said.

The problem is happening in Europe too. “The river Rhine, an important trade route that runs through Germany via European cities to the port of Rotterdam, has become shallower at critical points,” reported Lucy Handley last week in CNBC. Here are some excerpts from the article:

“The shipping volumes on the river Rhine have been more or less consistent for the past 20 years or so,” said Tim Beckhoff, a procurement and supplier management expert at McKinsey. “And, since 2021, we’ve seen them now dropping year over year. It’s a trend, and probably a trend that’s going to continue,” he told CNBC via telephone.

Goods like oil, chemicals and grains are shipped on the Rhine and water levels fell so low that some vessels sailed only a quarter full in August last year. In 2018, freight transported on Germany’s inland waterways was down 11.1% year-over-year, according to Deutsche Bank.

In response, Maersk has implemented a “Low Water Surcharge” for barge transports “passing the measuring point ‘Kaub’ due to draft restrictions and other locations might be affected in the near future too.”

Delays. Longer lead times. Higher costs. If you ship via barge or the Panama Canal, you’re already wrestling with these problems. Your Plan B options, such as shipping via rail or truck, come with their own issues and tradeoffs. Plan C: Pray for rain? There’s only so much you can do.

When it rains, it pours. But when it doesn’t rain, it pours too. Such is the life of a transportation professional.

And with that, have a happy weekend!

Song of the Week: “Swimming In Your Ocean” by Crash Test Dummies