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As supply chain troubles mount, Biden touts longer hours for L.A. port

Administration officials promise a “90-day sprint” to clear a path for cargo......»»

Category: topSource: washpostOct 13th, 2021

As supply chain troubles mount, Biden to tout longer hours for L.A. port

Administration officials promise a “90-day sprint” to clear a path for cargo......»»

Category: topSource: washpostOct 13th, 2021

Why Biden"s plan for 24/7 California port operations won"t solve the supply-chain crisis

President Joe Biden wants to clear traffic jams at US ports and save the holiday shopping season, but experts say he can't solve the problem. President Joe Biden speaks about prescription drug prices and his "Build Back Better" agenda from the East Room of the White House, Thursday, Aug. 12. Associated Press/Evan Vucci The White House announced the Port of Los Angeles would move toward 24/7 operations. Major companies like Walmart and UPS also agreed to extend hours to help move goods. Experts told Insider Biden's plan doesn't address the entire issue. President Joe Biden wants to clear traffic jams at US ports and save the holiday shopping season, but experts say his current plan won't completely solve the problem.The White House announced on Wednesday that the Port of Los Angeles would start processing ships 24 hours a day, seven days a week to help ease a near-record backlog of over 60 container ships waiting to unload. It also said that six companies, including Walmart, UPS, and FedEx had committed to extending their hours to help move the goods as a part of a 90-day sprint.But Biden's plans may sound more impressive than they actually are. Logistics experts told Insider the changes will have little impact on the supply-chain crisis and, if anything, could push the issue further down the supply chain."It's great that they've chosen to do something, but we're talking about a less than 1% to 2% change here," Brian Whitlock, a supply chain analyst at Gartner, said. "The work that they're talking about here is going to be immaterial. It probably won't even be visible."Former US trade negotiator Harry Broadman told Insider the administration's plan addresses the more "glamorous" aspect of the supply chain - hulking cargo ships stuck at sea - while failing to look at the issue "holistically." Backlogs at US railroads and warehouses are also contributing to the delays. Shortages of warehouse workers, truck drivers, shipping containers, and chassis are also major issues that the White House failed to address.Under the White House's plan, the Port of Los Angeles will follow in the footsteps of its neighbor in Long Beach, which has been piloting a 24-hour program Monday through Thursday. Since it launched in September, the port has seen zero uptake in the added hours between 3 a.m. and 7 a.m., according to Bloomberg.Everyone needs to get 'on the same page'At the time, Port of Long Beach executive director Gene Seroka said longer hours will do little to address the backlog when truckers and warehouse operators have not similarly extended their hours. It's not ideal for truckers to pick up loads at night when they'd have to find alternative places to store the goods when the warehouses are not open at night. Plus, the terminals are run by private companies which port officials are still working with to create timelines for extending hours and coordinating with importers to pick up their cargo. Seroka said the issue will not be solved until everyone within the supply chain gets "on the same page" - a near-impossible proposition, considering warehouses and trucking companies are fractured into a multitude of small to mid-sized companies."The issue is non-linear," Mike Tran, RBC's managing director for digital intelligence strategy, told Insider. "It's not just about getting people to work or extending hours. The issue has spread throughout the entire supply chain, each leg of the journey is delayed." What's more, the added hours will not make a significant impact on the backlog. It will help the ports move about 3,500 more containers a week - a small fraction of the more than 950,000 containers moved in August and the 500,000 waiting to dock and unload. It's up to individual companies to solve the problemBroadman said the supply-chain crisis is mostly out of the president's control, unless the government began regulating or penalizing companies within the supply chain."There's nothing much that the Biden administration can do in the short or even medium-term," he said. "The logistics industry is run by private actors and these private actors need to solve it."It will be crucial that private companies that power the supply chain work together. Whitlock said securing commitments from companies like Walmart, Target, and Home Depot could be the first of many steps toward this.White House officials have admitted that addressing the backlogs will not be like "flipping a light switch.""This is a big first step and it's feeding at the movement of materials and goods through our supply chain," But now we need the rest of the private sector chain to step up as well," Biden said Wednesday. "And if the private sector doesn't step up, we're going to call them out."Read the original article on Business Insider.....»»

Category: smallbizSource: nyt22 hr. 35 min. ago

Rabobank: The Problem Is No Central Bank Can Bail Out The Physical Economy From Shortages

Rabobank: The Problem Is No Central Bank Can Bail Out The Physical Economy From Shortages By Michael Every of Rabobank Back in the days before infinite liquidity and markets being in love with the idea of being big just for the sake of it, there used to be discussion about the difference between extensive and intensive growth. Put simply, extensive growth is achieved by adding more inputs to get more output; intensive growth is achieved by getting more output from existing inputs - what we call ‘productivity’. Back in the old days, we used to have that too. Extensive vs. intensive comes to mind on the back of yet another stronger-than-expected US inflation print (0.4% m/m, 5.4% y/y; 0.2% m/m core, 4.0% y/y). This was followed by the White House announcing early results of its supply chain task force. The longshoreman and the short is: the Port of LA is expanding to 24/7 operation; the union has announced they are willing to work extra shifts; and large US companies are announcing they will use expanded hours to move more cargo off the docks, so ships can come to shore faster. So, crisis over? Not at all, in the view of supply-chain experts. Well before this announcement they had pointed out --as did we, in ‘In Deep Ship’-- that simply getting containers out of the terminal at LA achieves very little if you don’t the solve chassis crisis; if the containers sit there waiting for trucks; or for truckers; or for rail. All you do is move the logjam from sea to shore - and that can potentially make matters worse. The Transportation Secretary running this task force is a vocal opponent of the ‘so build a bigger road’ mentality that ends up with bigger roads and the same traffic logjam. This is the same policy idea without even spending on the cement and asphalt. Some are also asking why the White House bafflingly still hasn’t appointed a US Maritime Administrator yet. Others are asking how trying to facilitate more imports into the US, rather than banging the drum for localization and ‘just in case’, is compatible with Build Back Better and resiliency. But there is bipartisanship in failing to understand what is going wrong, and how to solve it. Florida Governor De Santis is offering his state’s ports as an alternative to LA when it isn’t practical; and a Californian Republican just introduced the SHIP Act to Congress to “ban cargo ships from idling or anchoring in the coastal waters of Southern California for the next 180 days”, so forcing dozens of vessels to hang around in the ocean for months rather than safely offshore. In short, we are seeing a lot of moving faster, and very little moving smarter. The Grinch will easily steal Xmas, and far more, at this rate.    Sailing on regardless, the FOMC minutes from the September 21-22 meeting said that an illustrative path of QE tapering designed to be simple to communicate and entailing a gradual, fixed reduction in net asset purchases of $10bn Treasuries and $5bn agency MBS, ending around the middle of next year, is seen as providing a straightforward and appropriate template that policymakers might follow. Of course, the Fed also noted that it could adjust the pace of tapering if economic developments were to differ substantially from what they expected – like both inflation and employment has so far, to no effect. In short, the Fed announced tapering in just a few weeks (November 3), and then actually start to taper from either mid-November or mid-December. Isn’t that fitting in a way? After all, there will almost certainly be far less *stuff* circulating in the US economy, so shouldn’t we match that with far less liquidity? Before you say yes, if you believe the Fed actually think like that, I have a port in New Mexico to sell you. They clearly have stock portfolios to worry about instead. Meanwhile, it wouldn’t be a day ending in a y without a new global supply-chain disruption. This time China is to stop exporting refined fuel. This is just as the rest of Asia is set to consume more, as it begins to open up again. As Bloomberg puts it, quoting Oilchem: “State-owned refiners are earning more from local sales”. Which is where arguments about localization and resiliency begin to re-emerge, for some. Staying with energy, Chinese coal prices are hitting new highs again, with this now set to be passed on to industry; by contrast, the EU are talking about tax cuts to help industry and consumers cope with rising electricity prices! Isn’t this strategy, albeit via wage increases, what we tried and failed with in the 1970s? It’s not that this is necessarily the wrong thing to do to avoid recession risks and social unrest – but it will only push prices even higher, and strain supply chains even more. Indeed, while all the headlines about the IEA’s annual energy report yesterday are naturally that we need to more than redouble our efforts to shift towards renewables, if you read the nastier details, there is also a need for massive investment in fossil fuels through to 2030. If that doesn’t arrive, high energy prices are here to stay, seems to be the message: like Xmas gifts, is it on the way though? And to some places, or everywhere? After slowing loan growth yesterday in China, and another far-higher-than-expected trade surplus, today saw Chinese inflation data. CPI came in at 0.7% y/y vs. 0.8% last month and the same expected for this. More importantly, PPI came in at 10.7% y/y vs. 9.5% last month and 10.5% expected. Recall that coal prices alone will push this series much, much higher ahead in theory. Staying with China, Bloomberg says “At this point, it’s no longer about salvaging the troubled China Evergrande Group or its billionaire chairman Hui Yan Ka from the debt crisis. It’s jobs, growth and, ultimately, social stability that are at stake. In other words, a bailout of the indebted developer may not be enough to underpin one of the world’s second-largest economy as payment defaults become contagious, a sales slump spreads to the whole sector, and more players see their ratings cut.” The argument is naturally parroted by Wall Street: sure, *pretend* to deal with asset bubbles, but you cannot really deal with them “because markets!” Yet Bloomberg also notes loosening policy slightly won’t change consumer psychology, and Beijing has made clear house prices are no longer going to be allowed to keep going up – so why buy a 2nd, 3rd, 4th home, etc., which accounted for 85% of recent home sales? So, we are looking at both deflation and inflation in China, vs. just inflation everywhere else. Moreover, we are back to extensive vs. intensive growth, which Wall Street no longer understands; just as it now fails to grasp Schumpeter; just as it utterly fails to read Marx. Don’t let that all stop the Street, or Chinese markets, perpetually pricing in bailouts and hockey sticks and “transitory” and Xmas every day, however. It’s all a generation of traders have known both East and West, so who can blame them? The problem is no central bank can bail out the physical economy from shortages. To wrap up, Aussie jobs data showed a -138K print, yet where unemployment went down to 4.6%, and only part-time jobs were apparently lost, not full-time. Extensive or intensive takes on such partial data are not really worth too much of anyone’s time. They certainly won’t be moving the RBA from not moving. Tyler Durden Thu, 10/14/2021 - 10:10.....»»

Category: blogSource: zerohedgeOct 14th, 2021

Moody"s warns of "dark clouds ahead" for the global supply chain as 77% of the world"s largest ports face backlogs

The credit rating agency said disruptions "will get worse before they get better." The largest US port is seeing the worst of the delays. Container ships wait off the coast of the congested ports of Los Angeles and Long Beach on September 29, 2021. Mike Blake/REUTERS Moody Analytics warned on Monday that there is no easy fix for the supply-chain crisis. Data shows 77% of major world ports have seen an uptick in turnaround time this year. Record backlogs in Southern California ports are the most significant port delays in the world. Historic delays and product shortages are threatening to topple an already tense global supply chain.On Monday, Moody Analytics warned that the disruptions "will get worse before they get better," citing delays at key US ports, as well as the national labor shortage. The credit rating agency said there are "dark clouds ahead" for the global supply chain as there is no clear solution to work out kinks between subsections of the supply chain around the world. In particular, Moody's identified the "weakest link" in the supply chain as an alarming shortage of truck drivers - a problem that has left shipping yards swamped with shipping containers and caused equipment shortages."As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at every corner," it said.The supply-chain crisis has caused shortages of everything from food and household goods to computer chips, cars, furniture, and electronics. Automakers have repeatedly slashed production goals, while companies like Nike have warned customers products will be harder to find over the holiday season due to the bottlenecks.Apple may also cut production goals for its iPhone 13, Bloomberg reported Tuesday. Analysts at RBC Capital Markets agree with Moody's concerns. In a report this month, the bank analyzed the 22 most influential ports in the world and gauges how long it takes for cargo ships to enter and unload. They found that 77% of ports have experienced above-average wait times this year. Of the 22 ports, the ports in Los Angeles and Long Beach (which are often accounted for as a single port due to their proximity) had the most inefficient wait times of any other top port in the world. Associated Press The turnaround time for a container in the ports nearly doubled in 2021 as compared to averages seen in 2017 through 2019. Turnaround time jumped from 3.6 days to 6.4 days - nearly five days longer than several ports in Asia which operate 24/7. On Wednesday, the White House announced the Southern California ports would move toward 24/7 operations and the dock workers were working to extend their hours, but Mike Tran, RBC's managing director for digital intelligence strategy, told Insider extended hours alone will not be enough to solve the issue.RBC's data found that the most significant difficulty at Long Beach and Los Angeles ports was the lack of foot traffic which remains 28% below pre-pandemic levels, despite a 30% increase in the goods going through the ports."The issue is non-linear," Tran told Insider. "It's not just about getting people to work or extending hours. The issue has spread throughout the entire supply chain, each leg of the journey is delayed." Outside of port delays and worker shortages, backlogs at warehouses and railroads also add to the delays, which have caused equipment shortages of key items including shipping containers and chassis.Earlier this month, Gene Seroka, executive director of Port Los Angeles said the issue will not be solved until everyone within the supply chain gets "on the same page" - a near-impossible proposition, considering warehouses and trucking companies are fractured into a multitude of small to mid-sized companies.The White House also announced on Wednesday that some major chains, including Walmart will extend their working hours to help ease the shipping crisis.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 14th, 2021

: Biden touts expanded hours for L.A. port in bid for supply-chain relief

President Joe Biden on Wednesday is touting expanded hours for the Port of Los Angeles as he plans a speech on his administration's efforts to relieve supply-chain pressures......»»

Category: topSource: marketwatchOct 13th, 2021

The Port of Los Angeles will launch 24/7 operations to tackle the huge line of ships waiting to dock, the White House says

The Port of Los Angeles was adding new off-peak night shifts and weekend hours so it could move more cargo, the White House said. The shipping industry is currently in chaos, with ports in Southern California being especially hard hit. Reuters/Alan Devall The Port of Los Angeles will start processing ships 24/7, the White House said. The shipping industry is currently in chaos, causing product shortages and soaring prices. Ships are currently stuck off the California coast, waiting to get into port. The Port of Los Angeles is starting to process ships 24/7 to help ease a massive backlog, the White House said Wednesday.The port was adding new off-peak night shifts and weekend hours, the White House said in a press release. The new hours would almost double the number of hours during which cargo can be moved, it said.The shipping industry is currently in chaos, with ports in Southern California hit especially hard. At the Port of Los Angeles alone, ships carrying nearly 500,000 shipping containers - or about 12 million metric tons of goods - were waiting in drift areas and at anchor on October 5 for spots to open up so that they could dock and unload.On Tuesday, there were 80 ships at anchor or drift areas and 64 at berths across both the Ports of Los Angeles and Long Beach, according to the Marine Exchange of Southern California. "The normal number of container ships at anchor is between zero and one," Kip Louttit, executive director of the Exchange, told Insider in July.The White House said that the International Longshore and Warehouse Union, which represents port workers, had agreed for its members to work longer hours.President Joe Biden is set to hold a virtual meeting Wednesday to discuss the supply-chain chaos, with expected attendees including executives from UPS, FedEx, Walmart, the US Chamber of Commerce, Teamsters, and the American Trucking Association, as well as the executive directors of the Ports of Los Angeles and Long Beach, CNBC reported.The Ports of Los Angeles and Long Beach together account for around 40% of all shipping containers entering the US, as well as around 30% of all exports. In September, the Port of Long Beach switched to 24-hour operations between Mondays and Thursdays, and its executive director said that the industry was in "crisis mode."Multiple factors are causing the problems, including a surge in demand for goods, labor shortages at ports, and COVID-19 related port closures.Coupled with a lack of truck drivers, the shipping crisis is wreaking havoc across the supply chain, causing shortages, delays, and soaring prices affecting products from freezers and computer chips to chicken wings and Coca-Cola.Read the original article on Business Insider.....»»

Category: personnelSource: nytOct 13th, 2021

Hapag-Lloyd CEO: "We Are Probably In The Peak Of The Problems"

Hapag-Lloyd CEO: "We Are Probably In The Peak Of The Problems" By Kim Link-Wills of FreightWaves.com, Congested ports. Clogged supply chains. Capacity shortages. Much of Hapag-Lloyd CEO Rolf Habben Jansen’s third-quarter overview had a familiar refrain, one likely to be heard again after the fourth quarter.  But there were two topics Habben Jansen did not expound upon: the buckets of money the ocean carrier likely raked in during the third quarter and the recent investment in a German port. Hapag-Lloyd is scheduled to release its third-quarter figures Nov. 12, and Habben Jansen did not open the ledger during a virtual chat with the media last week. His only reference to Q3 financials came when addressing supply chain bottlenecks.  “Once the data come out for the third quarter of 2021, I do not think that we will see massive growth compared to [Q2 year-over-year] simply because the supply chains at the moment are so much clogged up and we have so many ships waiting outside of the ports,” he said.  Hapag-Lloyd did experience massive second-quarter growth year-over-year. Q2 earnings before interest, taxes, depreciation and amortization was $2.3 billion, an eye-popping $1.5 billion gain from the $770 million reported in the second quarter of 2020. Revenue shot up 70%, from $3.3 billion in Q2 2020 to $5.6 billion this year.  Habben Jansen did touch on the ocean carrier’s stellar financial performance in the first half of 2021.  “On the back of higher transportation volumes and rates, we’ve seen a significant increase in results for the first half of the year. Contract rates are up, but of course very significantly below what we have seen in the spot market. We’re still loading, though, quite a few boxes at 2020 rate levels, especially medium- and long-term contracts,” he said.  “If you look at our overall numbers, then you will see that our average freight rate in the first half [of the] year was up compared to last year by about $500 per TEU. Of course, that’s quite a lot of money, but $500 a TEU is nowhere near the increases that we have seen in the spot market,” Habben Jansen continued. “That clearly illustrates that we’ve been moving a lot of cargo on contracts that were closed earlier.”  Hapag-Lloyd reported first-half 2021 EBITDA of $4.2 billion, a giant leap from $1.2 billion in 2020, and group profit of $3.3 billion, up from $2.9 billion the year before.   “Revenues increased in the first-half year of 2021 by approximately 51%, to $10.6 billion, mainly because of a 46% higher average freight rate of $1,1612/TEU. The freight rate development was the result of high demand combined with scarce transport capacities and severe infrastructural bottlenecks,” Hapag-Lloyd said in the August release.   “While demand remains high in the current congested market environment, it is leading to a shortage of available weekly transportation capacity. For this reason, Hapag-Lloyd expects earnings to remain strong in the second half of the financial year,” it said.  Full-year EBITDA is forecast in the range of $9.2 billion to $11.2 billion. ‘It’s very important to have a robust network’ Habben Jansen was asked several times to elaborate on Hapag-Lloyd’s investment in JadeWeserPort. Late last month, Hapag-Lloyd issued a brief statement in which it said it was acquiring a 30% stake in Container Terminal Wilhelmshaven and 50% of the shares of Rail Terminal Wilhelmshaven at JadeWeserPort in Germany for an undisclosed price.  More than once Habben Jansen was asked about the price, and more than once he said the parties involved had agreed not to disclose that information.  “I think we have given a number of arguments on why we believe that investing in Wilhelmshaven makes sense, I think the main argument being that we think that it will strengthen the position of the German ports … and hopefully over time will lead to more cargo coming in to the German ports,” he said. Habben Jansen also declined to name other port investments Hapag-Lloyd may be eyeing.  “We won’t comment on specific locations, but the logic behind this is I think we have also learned over the last year and a half that it’s very important to have a robust network and that means you should concentrate, especially in transshipment, in a limited number of places. In those places, it’s then important to have control over terminal capacity,” he said, adding that Hapag-Lloyd “will probably consolidate all of our transshipment volume in … 12 or 15 locations around the globe, and it would not be illogical if we do investments in, say, half of those locations or so.” ‘The already congested supply chain is getting congested even further’ Habben Jansen did talk about the continuing high demand for ocean shipping. “We’ve certainly seen strong demand on the back of the economic upturn and in the course of the first half. As far as we can see right now, we do expect that to continue. We still see today that demand is very strong on most trades, even if it’s definitely driven still very much by the U.S., because that’s where we see the strongest increases, on the trans-Pacific. And if we look at the last couple of months, also the Atlantic has been very strong,” Habben Jansen said. “The difficulty that we of course all face at this point in time — and that’s not a secret — this strong demand, combined with a whole bunch of COVID-related restrictions and unexpected surge in volume, has led to quite a lot of difficulties in the supply chain.” Those difficulties include the lack of available containers. “The worst numbers we have seen so far were in the month of August, where the time that it takes us to get a container back is up about 20%, which also means that we need 20% more containers than we normally need to transport the same amount of volume.  “The same goes for voyage delays,” Habben Jansen said. “We also have seen these delays go up, and if we look at the situation today, we are probably in the peak of the problems. … The already congested supply chain is getting congested even further.”  The Ever Given blockage of the Suez Canal, COVID-caused port shutdowns in China and an earlier-than-usual peak season all have “put a lot of pressure on global supply chains and capacity. In many ports at the moment, capacity remains strained. This is the case in Asia, where we have significant delays when we look at Korea, we have significant delays when we look at China, also Singapore [is] not as smooth as it normally runs. If you go to Europe, especially in the north, [there are] definitely a number of ports where we have very significant waiting times,” he said.  “If we look at the United States, that’s probably where we still have most of the difficulties, not only in LA/Long Beach but also in other ports on the West Coast, but also increasingly at ports on the East Coast, where places like Savannah and New York are heavily congested.”  Habben Jansen said, “On average it takes us today 10 to 15 days longer before we get the box back. That in reality also means that there are quite a few TEUs globally that are currently somewhere in the supply chain that actually should already be at the warehouses of many of the customers.” He reiterated that port congestion is not limited to the United States. “On a global basis, we see that pretty much every ship in the Hapag-Lloyd network needs to wait longer before it gets into any port. Those are significant effects.” The supply chain problems extend beyond ports, Habben Jansen noted. “Let’s not forget that these difficulties are in many cases not limited to the ports only, but we also have bottlenecks on inland transportation. The most obvious bottlenecks, they’re definitely in the U.S., but also in places like the U.K., and in some places in Europe we also see that shortage of available inland capacity [is] prominent.” He said Hapag-Lloyd has “implemented quite a lot of countermeasures to try and limit the impact on our customers and also to improve service quality.” “We tried to move capacity to those places where it is needed the most. We’ve also tried to reroute cargo to alternative gateways because sometimes it is better to go to another port if you can berth there upon arrival rather than wait outside for a couple of days. We bought secondhand tonnage, we chartered extra ships, we deployed extra loaders. And we have ordered, in particular, a large number of additional containers,” Habben Jansen said.  This past spring Hapag-Lloyd ordered standard and refrigerated boxes to carry 210,000 twenty-foot equivalent units to combat “severe imbalances” caused by the shortage of containers around the world.  “We have been out to outinvest that problem, if you want. We have added several [hundred] thousand TEUs to our fleet, and I would say that today … that situation around the boxes is pretty much back to normal,” Habben Jansen said.   “In addition to that, we’ve also added people. We’ve added IT capacity. We’ve also developed a number of new digital services that have been launched over the last couple of months [to] allow customers to have better visibility where they actually can and cannot book, and it also allows us to get quicker feedback to our customers on things that are possible and not possible,” he said. Spot rates and surcharges Hapag-Lloyd is among the ocean carriers that have agreed “given where the market is today, we should not, even if capacity is very tight and supply and demand would allow us to do that, not raise spot rates any further, which we will abide by until further notice. The same goes for new surcharges,” Habben Jansen said.   Surcharges will come back into play, “but that will not be done today or tomorrow,” he said, advocating a change in the way fees are levied.  “They should be related to enforcing better behavior. If you have a very high no-show ratio, you should probably pay something like a cancellation fee. We at some point need to go and do our utmost to simplify those things,” Habben Jansen said. “Or if you always deliver us higher weight than you declare, then I think it’s fair that you have to pay extra for that. So I think our charges need to go more in the way we drive the right behavior between us.” He believes there should be a clear understanding of what is expected from both carrier and shipper. “For an example, if we ask people to bring their containers into the terminal 24 or 48 hours before departure of the ship, if the documentation is not complete before that time, then we will not load that cargo anymore. This all fits into becoming more professional between carrier and shipper. That’s probably, if we look back two or three years from today, that’s probably a good thing that this crisis will have brought,” Habben Jansen said. Big ships and sustainability Habben Jansen said “better results” have enabled Hapag-Lloyd to modernize its fleet. “We have placed a number of orders to renew our fleet and also that’s where Hapag-Lloyd is not an exception. The global orderbook is currently I think a little bit north of 20%. It will take some time, though, before all those ships are going to be delivered,” he said.  Hapag-Lloyd has ordered 12 ships, each with a capacity of more than 23,500 TEUs, at a total cost of $852 million. “Apart from investing in our fleet, we have also invested in other key areas of our business,” he said. “We’ve done quite a lot of things to boost our digital capabilities with the idea that we do try to provide better transparency on vessel departures and arrivals. We’ve opened up a number of new offices in places like Ukraine, Kenya, Senegal, Morocco, [with] a few more in the pipeline. And of course we’ve also closed on the acquisition of [African carrier] NileDutch.” Habben Jansen said Hapag-Lloyd remains committed to reducing its carbon dioxide emissions by 60%, compared to 2008, by 2030. “We have to invest in new ships, phase out older ones, try to see what we can do to use alternative fuels, whether that’s biofuel or synthetic fuel or liquid gas or other things. And yes, we want to achieve becoming carbon-neutral or net-zero carbon-neutral, but that will take time. The key thing here will be to get access to alternative fuels,” he said.  “The reality is, though, that the scaling of the production of those vessels will not be all that easy and that will take time. That’s also why we need to continue to invest in R&D, ideally industrywide. For now, we are making a shift to liquid gas as we believe that currently will be quite a good transitional solution, but more importantly, those ships can also, when you look at their machines and their engines, they will allow us to switch to other greener alternatives, and that could be various fuels,” Habben Jansen said.  He was asked if Hapag-Lloyd had a negative outlook on liquefied natural gas as a long-term fuel. “For the time being, we do not intend to convert more [ships to LNG] because that conversion turned out to be significantly more expensive than we originally had hoped. It doesn’t mean that if we find another way to do it, we might still consider it, but for the time being, there’s nothing specifically planned there. In terms of the outlook of LNG, I mean, that has certainly changed over the last couple of quarters. There’s all kinds of reports coming out on that,” Habben Jansen said.  “There was a lot of support for LNG as a transition fuel. And I’d also emphasize that the engines we have in those ships cannot only use LNG but also a number of other liquid fuels, even if some of them we might need to do a little bit of modification,” he continued. “How long LNG will be around, I personally think it’s going to be around for quite a lot longer than many people think, simply because the scaling of production of alternative fuel is going to take quite a lot of time.” Hapag-Lloyd had said in June that it was focusing on LNG “as a medium-term solution as it reduces CO2 emissions by around 15 to 25% and emissions of sulfur dioxide and particulate matter by more than 90%. Fossil LNG is currently the most promising fuel on the path toward zero emissions.” Lessons learned Habben Jansen said the supply chain crisis has taught a number of lessons. “First of all, trying to stay close to the customer is very important. Also I think we’ve learned that trying to be as transparent as possible is important. Be as digital as you can because that allows people to do more and more things themselves. Make sure that we remain agile and flexible,” he said.  He also gave a tip of the hat to the long-suffering seafarers, “the backbone of global shipping,” and said that the crew change crisis brought to the forefront at the height of the COVID-19 pandemic remains a “very, very tough” situation.  “If we look at the operational challenges that we have, they are currently still very, very significant, and we do not expect to see any normalization until Chinese New Year ’22,” he said. “I would seriously hope that after that, we will see a gradual normalization — until we go into the next peak season of 2022.” Tyler Durden Fri, 10/08/2021 - 05:00.....»»

Category: smallbizSource: nytOct 8th, 2021

Nearly half a million shipping containers are stuck off the coast of Southern California as the ports operate below capacity

The ports currently have 19 mega-container ships and approximately 12 million tons of goods waiting to dock and unload for as long as a month. Ships sit off the coast of Seal Beach, CA, on Tuesday, January 26, 2021. Cargo ships enduring one of the worst U.S. port bottlenecks in more than a decade faced down another obstacle as they waited to offload near the ports of Los Angeles and Long Beach Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images Key US ports in Southern California are facing near-record backlogs of cargo ships. The Port of Long Beach has moved to increase operating hours, which may not be enough to fix the issue. Shortages of workers, equipment, and a lack of coordination across the transportation industry created a ripple effect. See more stories on Insider's business page. The largest port in the US faces a near-record backlog of cargo ships, and there's no end in sight.On Tuesday, Los Angeles had nearly half a million 20-foot shipping containers - or about 12 million metric tons of goods - waiting in drift areas and at anchor for spots to open up along the port to dock and unload, according to data pulled from the Marine Exchange of Southern California's master queuing list. The port has 19 mega-container ships waiting to dock, the largest of which is carrying 16,022 20-foot shipping containers."Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago," Kip Louttit, the executive director of the Marine Exchange of Southern California, told Insider earlier this year. "They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo."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. Due to the volume of ships waiting along the shore, some ships are floating further than 20 miles off the shore in order to keep shipping lanes clear, according to Louttit.Today, ships at the port can wait in these positions for as long as a month, Marine Exchange data shows. As of Tuesday, a vessel from Asia has been waiting off the coast since September 5 - an issue that experts warn will cause goods to miss the holiday shopping season.Despite the backlog, ports are operating at lower capacitiesThe ports are only operating at 60% to 70% capacity, Uffe Ostergaard, president of the North America region for German ship operator Hapag Lloyd told The Wall Street Journal."That's a huge operational disadvantage," Ostergaard said, pointing to the fact that the two ports are closed for several hours most days, as well as on Sundays - making it more difficult to keep pace with the ports in Asia and Europe that are sending the goods on a 24/7 schedule. A container ship docked next to cranes at the port of Mombasa, Kenya, in October 2019. Baz Ratner/Reuters In September, the Port of Long Beach moved to increase their hours of operation to 24-hours on Monday through Thursday. The Port of Los Angeles did not follow suit, choosing instead to maintain its existing hours. The traditional routine at the ports includes two shifts for longshore workers: 8 a. to 4 pm and 6 pm to 3 am. The ports are closed on Sundays. Overnight shifts and Saturdays are more expensive and rarely used, The Journal reported. Longer hours may not be enough.Gene Seroka, executive director of Port Los Angeles, said longer hours do little to address the backlog when truckers and warehouse operators have not similarly extended their hours. It's not optimal for truckers to pick up loads at night, especially when they'd have to find alternative places to store the goods when the warehouses are not open at night.What's more, many warehouses near the West Coast don't have space for the goods. About 98% of warehouses in Southern California's logistics-heavy Inland Empire region are fully occupied, while the entire Western U.S. has a 3.6% vacancy rate, according to The Journal."It has been nearly impossible to get everyone on the same page towards 24/7 operations," Seroka said.Shortages of workers and equipment exacerbate delaysA struggle to hire enough workers has had a tremendous impact on the transportation industry nationwide, causing headaches at ports, warehouses, railways, and trucking. Many companies have fewer workers than before the pandemic but face significantly more work due to the boom in demand for goods since the pandemic started.The shipping delays have made it more difficult for truckers to meet their deadlines and stay on schedule when it comes to picking up goods at ports. The backlog has also caused a shortage of containers and the chassis needed to haul them. Containers wait for extended periods in ports, and it takes about twice as much time for operators to return the chassis, the Journal said. Associated Press Some cargo companies have even taken to storing their goods in the containers due to the lack of space at warehouses - as shipping containers represent a cheaper option than renting storage space. Last week, Flexport said shipments between Asia and North America were facing "critical undercapacity" when it came to available equipment.The U.S. is not the only country struggling to keep up with a build-up of cargo ships. On Sunday, Bloomberg reported that COVID-19 shutdowns had created a ripple effect, pushing the prices of goods across the globe higher.The supply chain snarls are expected to create major issues for holiday shoppers. Executives have warned the shipping crisis will continue into 2023.Do you work at the ports in Los Angeles and Long Beach? Reach out to the reporter from a non-work email at gkay@insider.comRead the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 6th, 2021

California ports aren"t the only ones facing record backlogs of cargo ships - 3 other US ports have hit historic highs

While Southern California ports have over 60 cargo ships waiting to dock, smaller ports are also feeling the pinch as they hit new records. AP Photo/Ben Margot Ports in New Jersey and New York, as well as in Texas and Georgia, have seen record pileups. Turnaround time for container ships has increased across the country. Southern California ports face the greatest delays as they handle nearly half of all US imports. See more stories on Insider's business page. Shipping delays are piling up across the country as multiple US ports hit record backlogs.As the largest source of imports in the US - responsible for nearly half of all incoming goods - Southern California ports have received widespread attention. The ports have over 60 hulking cargo ships line up along the shore waiting to dock and unload. But, several smaller ports are also feeling the pinch.In the Port of Savannah - the fourth largest US port - over 20 container ships are waiting to dock. The port has hit multiple records this year for the number of container ships that have passed through the location. In July, Associated Press reported that the port moved 5.3 million 20-foot containers in a fiscal year - the most the location has ever encountered in a single year.Georgia Ports Authority did not respond to a request for comment from Insider, but Executive Director of the Georgia Ports Authority Griff Lynch told The Wall Street Journal that the boom in e-commerce has contributed to the backlog of cargo ships."Because of all this extra freight being imported, it's creating a backlog from the ship side to the dock side to warehouses and across the whole supply chain," Lynch told The Journal. Shipping containers near a shipyard. Getty Images Earlier this week, Georgia Ports Authority approved a $34 million plan to help solve the port delays by adding space to include another 1.6 million 20-foot shipping containers.Rising cargo volumes moving through smaller ports show how diverting traffic from Southern California is not a viable optionIn August, Port Houston set a new record for the number of shipping containers that went through the port over the course of the month as over 320,000 20-foot containers passed through the location - a number 29% higher than the same time the year before, when shipping levels were already spiking. A Port Houston spokesperson did not respond to a request for comment, but the group addressed the new record in a press release earlier this month."We expect elevated levels in the supply chain to continue well into 2022 and will continue to explore opportunities including accelerating an already aggressive capital investment strategy for our terminals to stay in front of the demand," said Roger Guenther, executive director at Port Houston.The Port of New Jersey and New York, which handles the majority of imports to the East Coast, hit a record number of cargo for its 13th consecutive month in August. Over 780,000 shipping containers passed through the port that month, according to a press release. Earlier this week, the Port of New York and New Jersey had 9 cargo ships at anchor, but a port spokesperson told Insider all of the ships were expected to dock within 48 hours."There are no labor shortages or significant shipping backlogs. The majority of the ships anchored off the coast of the Port of New York and New Jersey are oil tankers that do not call at Port Authority of New York and New Jersey facilities," the spokesperson told Insider. "During September, and throughout the pandemic, the port has performed extraordinarily well in keeping the supply chain moving throughout the region, as well as cargo bound for the Midwest via rail." Despite record-breaking levels in smaller ports, Southern California ports still face the greatest backlogsA report from the RBC Capital Markets and Orbital Insight that analyzed the top 22 most influential ports in the world found that 77% of the locations had produced above average wait times this year. It found that the ports in Southern California had the most inefficient wait times of any other top port in the world. The turnaround time for a container in the ports nearly doubled in 2021 as compared to averages seen in 2017 through 2019. Milos Bicanski/Getty Images The time it takes for a ship to enter the port and unload increased from 3.6 days to 6.4 days in the Southern California ports - nearly five days longer than several ports in Asia which operate 24/7. What's more, wait times at the port have recently exploded, with some boats waiting as long as three weeks before they can dock.In contrast, levels at East Coast ports have been more stable as New York and New Jersey, as well as Port Houston ports, only saw an average increase equivalent to a quarter of a day. The study did not take the Port of Savannah into consideration.The study identified the greatest difficulty at Long Beach and Los Angeles ports as the lack of foot traffic which remains 28% below pre-pandemic levels. "We were able to quantify the degree of the worker shortage that takes place by measuring foot traffic," Mike Tran, managing director of global energy strategy and digital intelligence strategy at RBC Capital Markets, told Insider. "Container ships are carrying about 30% more goods, which means more to unload, but now they have to do it with 28% less people."Tran told Insider that the only way he sees the supply-chain crisis resolving itself would be if people limited the amount of goods they purchased - an unlikely outcome considering the impending holiday shopping season paired with many companies' need to restore depleted inventory levels.Read the original article on Business Insider.....»»

Category: personnelSource: nytOct 2nd, 2021

Tens of thousands of shipping containers are stuck off the coast of Southern California as the ports operate below capacity, combatting a crushing shortages of workers, equipment, and time

The US struggles to keep up with ports in Asia that operate 24/7. Even increasing hours at the ports may not be enough to combat the record backlog. Ships sit off the coast of Seal Beach, CA, on Tuesday, January 26, 2021. Cargo ships enduring one of the worst U.S. port bottlenecks in more than a decade faced down another obstacle as they waited to offload near the ports of Los Angeles and Long Beach Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images Key US ports in Southern California are facing near-record backlogs of cargo ships. The Port of Long Beach has moved to increase operating hours, which may not be enough to fix the issue. Shortages of workers and equipment, and a lack of coordination across the transportation industry have created a ripple effect. See more stories on Insider's business page. The largest port in the U.S. faces a near-record backlog of cargo ships, and there's no end in sight.Los Angeles and Long Beach ports had 62 cargo ships waiting to dock and unload as of Friday - a stark contrast to an average of one to zero ships before the pandemic. Today, ships at the port can wait for as long as three weeks, Port LA data shows.Despite the historic backup, the ports are only operating at 60% to 70% capacity, Uffe Ostergaard, president of the North America region for German ship operator Hapag Lloyd told The Wall Street Journal."That's a huge operational disadvantage," Ostergaard said, pointing to the fact that the two ports are closed for several hours most days, as well as on Sundays - making it more difficult to keep pace with the ports in Asia and Europe that are sending the goods on a 24/7 schedule. A container ship docked next to cranes at the port of Mombasa, Kenya, in October 2019. Baz Ratner/Reuters Last week, the Port of Long Beach moved to increase their hours of operation to 24-hours on Monday through Thursday. The Port of Los Angeles did not follow suit, choosing instead to maintain its existing hours. The traditional routine at the ports includes two shifts for longshore workers: 8 a. to 4 pm and 6 pm to 3 am. The ports are closed on Sundays. Overnight shifts and Saturdays are more expensive and rarely used, The Journal reported. Longer hours may not be enough.Gene Seroka, executive director of Port Los Angeles, said longer hours do little to address the backlog when truckers and warehouse operators have not similarly extended their hours. It's not optimal for truckers to pick up loads at night, especially when they'd have to find alternative places to store the goods when the warehouses are not open at night.What's more, many warehouses near the West Coast don't have space for the goods. About 98% of warehouses in Southern California's logistics-heavy Inland Empire region are fully occupied, while the entire Western U.S. has a 3.6% vacancy rate, according to The Journal."It has been nearly impossible to get everyone on the same page towards 24/7 operations," Seroka said.Shortages of workers and equipment exacerbate delaysA struggle to hire enough workers has had a tremendous impact on the transportation industry nationwide, causing headaches at ports, warehouses, railways, and trucking. Many companies have fewer workers than before the pandemic but face significantly more work due to the boom in demand for goods since the pandemic started.The shipping delays have made it more difficult for truckers to meet their deadlines and stay on schedule when it comes to picking up goods at ports. The backlog has also caused a shortage of containers and the chassis needed to haul them. Containers wait for extended periods in ports, and it takes about twice as much time for operators to return the chassis, the Journal said. Associated Press Some cargo companies have even taken to storing their goods in the containers due to the lack of space at warehouses - as shipping containers represent a cheaper option than renting storage space. Last week, Flexport said shipments between Asia and North America were facing "critical undercapacity" when it came to available equipment.The U.S. is not the only country struggling to keep up with a build-up of cargo ships. On Sunday, Bloomberg reported that COVID-19 shutdowns had created a ripple effect, pushing the prices of goods across the globe higher.The supply chain snarls are expected to create major issues for holiday shoppers. Executives have warned the shipping crisis will continue into 2023.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 27th, 2021

Futures Slide On Growing Stagflation Fears As Treasury Yields Surge

Futures Slide On Growing Stagflation Fears As Treasury Yields Surge US index futures, European markets and Asian stocks all turned negative during the overnight session, surrendering earlier gains as investors turned increasingly concerned about China's looming slowdown - and outright contraction - amid a global stagflationary energy crunch, which sent 10Y TSY yields just shy of 1.50% this morning following a Goldman upgrade in its Brent price target to $90 late on Sunday. At 745 a.m. ET, S&P 500 e-minis were down 4.75 points, or 0.1% after rising as much as 0.6%, Nasdaq 100 e-minis were down 83 points, or 0.54% and Dow e-minis were up 80 points, or 0.23%. The euro slipped as Germany looked set for months of complex coalition talks. While the market appears to have moved beyond the Evergrande default, the debt crisis at China's largest developer festers (with Goldman saying it has no idea how it will end), and data due this week will show a manufacturing recovery in the world’s second-largest economy is faltering faster. A developing energy crisis threatens to crimp global growth further at a time markets are preparing for a tapering of Fed stimulus. The week could see volatile moves as traders scrutinize central bankers’ speeches, including Chair Jerome Powell’s meetings with Congressional panels. “Most bad news comes from China these days,” Ipek Ozkardeskaya, a senior analyst at Swissquote Group Holdings, wrote in a note. “The Evergrande debt crisis, the Chinese energy crackdown on missed targets and the ban on cryptocurrencies have been shaking the markets, along with the Fed’s more hawkish policy stance last week.” Oil majors Exxon Mobil and Chevron Corp rose 1.5% and 1.2% in premarket trade, respectively, tracking crude prices, while big lenders including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp gained about 0.8%.Giga-cap FAAMG growth names such as Alphabet, Microsoft, Amazon.com, Facebook and Apple all fell between 0.3% and 0.4%, as 10Y yield surged, continuing their selloff from last week, which saw the 10Y rise as high as 1.4958% and just shy of breaching the psychological 1.50% level. While growth names were hit, value names rebounded as another market rotation appears to be in place: industrials 3M Co and Caterpillar Inc, which tend to benefit the most from an economic rebound, also inched higher (although one should obviously be shorting CAT here for its China exposure). Market participants have moved into value and cyclical stocks from tech-heavy growth names after the Federal Reserve last week indicated it could begin unwinding its bond-buying program by as soon as November, and may raise interest rates in 2022. Here are some other notable premarket movers: Gores Guggenheim (GGPI US) shares rise 7.2% in U.S. premarket trading as Polestar agreed to go public with the special purpose acquisition company, in a deal valued at about $20 billion. Naked Brand (NAKD US), one of the stocks caught up in the first retail trading frenzy earlier this year, rises 11% in U.S. premarket trading, extending Friday’s gains. Among other so-called meme stocks in premarket trading: ReWalk Robotics (RWLK) +6.5%, Vinco Ventures (BBIG) +18%, Camber Energy (CEI) +2.9% Pfizer (PFE US) and Opko Health (OPK US) in focus after they said on Friday that the FDA extended the review period for the biologics license application for somatrogon. Opko fell 3.5% in post-market trading. Aspen Group (ASPU) climbed 10% in Friday postmarket trading after board member Douglas Kass buys $172,415 of shares, according to a filing with the U.S. Securities & Exchange Commission. Seaspine (SPNE US) said spine surgery procedure volumes were curtailed in many areas of the U.S. in 3Q and particularly in August. Tesla (TSLA US) and other electric- vehicle related stocks globally may be active on Monday after Germany’s election, in which the Greens had their best-ever showing and are likely to be part of any governing coalition. Europe likewise drifted lower, with the Stoxx Europe 600 Index erasing earlier gains and turning negative as investors weighed the risk to global growth from the China slowdown and the energy crunch. The benchmark was down 0.1% at last check. Subindexes for technology (-0.9%) and consumer (-0.8%) provide the main drags while value outperformed, with energy +2.4%, banks +2% and insurance +1.3%.  The DAX outperformed up 0.5%, after German election results avoided the worst-case left-wing favorable outcome.  U.S. futures. Rolls-Royce jumped 12% to the highest since March 2020 after the company was selected to provide the powerplant for the B-52 Stratofortress under the Commercial Engine Replacement Program. Here are some of the other biggest European movers today IWG rises as much as 7.5% after a report CEO Mark Dixon is exploring a multibillion-pound breakup of the flexible office-space provider AUTO1 gains as much as 6.1% after JPMorgan analyst Marcus Diebel raised the recommendation to overweight from neutral Cellnex falls as much as 4.3% to a two-month low after the tower firm is cut to sell from neutral at Citi, which says the stock is “priced for perfection in an imperfect industry” European uranium stocks fall with Yellow Cake shares losing as much as 6% and Nac Kazatomprom shares declining as much as 4.7%. Both follow their U.S. peers down following weeks of strong gains as the price of uranium ballooned For those who missed it, Sunday's closely-watched German elections concluded with the race much closer than initially expected: SPD at 25.7%, CDU/CSU at 24.1%, Greens at 14.8%, FDP at 11.5%, AfD at 10.3% Left at 4.9%, the German Federal Returning Officer announced the seat distribution from the preliminary results which were SPD at 206 seats, CDU/CSU at 196. Greens at 118, FDP at 92, AfD at 83, Left at 39 and SSW at 1. As it stands, three potential coalitions are an option, 1) SPD, Greens and FDP (traffic light), 2) CDU/CSU, Greens and FDP (Jamaica), 3) SPD and CDU/CSU (Grand Coalition but led by the SPD). Note, option 3 is seen as the least likely outcome given that the CDU/CSU would be unlikely willing to play the role of a junior partner to the SPD. Therefore, given the importance of the FDP and Greens in forming a coalition for either the SPD or CDU/CSU, leaders of the FDP and Greens have suggested that they might hold their own discussions with each other first before holding talks with either of the two larger parties. Given the political calculus involved in trying to form a coalition, the process is expected to play out over several months. From a markets perspective, the tail risk of the Left party being involved in government has now been removed due to their poor performance and as such, Bunds trade on a firmer footing. Elsewhere, EUR is relatively unfazed due to the inconclusive nature of the result. We will have more on this in a subsequent blog post. Asian stocks fell, reversing an earlier gain, as a drop in the Shanghai Composite spooked investors in the region by stoking concerns about the pace of growth in China’s economy.  The MSCI Asia Pacific Index wiped out an advance of as much as 0.7%, on pace to halt a two-day climb. Consumer discretionary names and materials firms were the biggest contributors to the late afternoon drag. Financials outperformed, helping mitigate drops in other sectors.  “Seeing Shanghai shares extending declines, investors’ sentiment has turned weak, leading to profit-taking on individual stocks or sectors that have been gaining recently,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities. “The drop in Chinese equities is reminding investors about a potential slowdown in their economy.”  The Shanghai Composite was among the region’s worst performers along with Vietnam’s VN Index. Shares of China’s electricity-intensive businesses tumbled after Beijing curbed power supplies in the country’s manufacturing hubs to cut emissions. The CSI 300 still rose, thanks to gains in heavily weighted Kweichow Moutai and other liquor makers. Asian equities started the day on a positive note as financials jumped, tracking gains in U.S. peers and following a rise in Treasury yields. Resona Holdings was among the top performers after Morgan Stanley raised its view on the stock and Japanese banks. The regional market has been calmer over the past few trading sessions after being whipsawed by concerns over any fallout from China Evergrande Group’s debt troubles. While anxiety lingers, many investors expect China will resolve the distressed property developer’s problems rather than let them spill over into an echo of 2008’s Lehman crisis. Japanese equities closed lower, erasing an earlier gain, as concerns grew over valuations following recent strength in the local market and turmoil in China. Machinery and electronics makers were the biggest drags on the Topix, which fell 0.1%. Daikin and Bandai Namco were the largest contributors to a dip of less than 0.1% in the Nikkei 225. Both gauges had climbed more 0.5% in morning trading. Meanwhile, the Shanghai Composite Index fell as much as 1.5% as industrials tumbled amid a power crunch. “Seeing Shanghai shares extending declines, investors’ sentiment has turned weak, leading to profit-taking on individual stocks or sectors that have been gaining recently,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities Co. “The drop in Chinese equities is reminding investors about a potential slowdown in their economy. That’s why marine transportation stocks, which are representative of cyclical sectors, fell sharply.” Shares of shippers, which have outperformed this year, fell as investors turned their attention to reopening plays. Travel and retail stocks gained after reports that the government is making final arrangements to lift all the coronavirus state of emergency order in the nation as scheduled at the end of this month. Australia's commodity-heavy stocks advanced as energy, banking shares climb. The S&P/ASX 200 index rose 0.6% to close at 7,384.20, led by energy stocks. Banks also posted their biggest one-day gain since Aug. 2. Travel stocks were among the top performers after the prime minister said state premiers must not keep borders closed once agreed Covid-19 vaccination targets are reached. NextDC was the worst performer after the company’s CEO sold 1.6 million shares. In New Zealand, the S&P/NZX 50 index. In FX, the U.S. dollar was up 0.1%, while the British pound, Australian dollar, and Canadian dollar lead G-10 majors, with the Swedish krona and Swiss franc lagging. •    The Bloomberg Dollar Spot Index was little changed and the greenback traded mixed versus its Group-of-10 peers o    Volatility curves in the major currencies were inverted last week due to a plethora of central bank meetings and risk-off concerns. They have since normalized as stocks stabilize and traders assess the latest forward guidance on monetary policy •    The yield on two-year U.S. Treasuries touched the highest level since April 2020, as tightening expectations continued to put pressure on front-end rates and ahead of debt sales later Monday •    The pound advanced, with analyst focus on supply chain problems as Prime Minister Boris Johnson considers bringing in army drivers to help. Bank of England Governor Andrew Bailey’s speech later will be watched after last week’s hawkish meeting •    Antipodean currencies, as well as the Norwegian krone and the Canadian dollar were among the best Group-of-10 performers amid a rise in commodity prices •    The yen pared losses after falling to its lowest level in six weeks and Japanese stocks paused their rally and amid rising Treasury yields   In rates, treasuries extended their recent drop, led by belly of the curve ahead of this week’s front-loaded auctions, which kick off Monday with 2- and 5-year note sales.  Yields were higher by up to 4bp across belly of the curve, cheapening 2s5s30s spread by 3.2bp on the day; 10-year yields sit around 1.49%, cheaper by 3.5bp and underperforming bunds, gilts by 1.5bp and 0.5bp while the front-end of the curve continues to sell off as rate-hike premium builds -- 2-year yields subsequently hit 0.284%, the highest level since April 2020. 5-year yields top at 0.988%, highest since Feb. 2020 while 2-year yields reach as high as 0.288%; in long- end, 30-year yields breach 2% for the first time since Aug. 13. Auctions conclude Tuesday with 7-year supply. Host of Fed speakers due this week, including three scheduled for Monday. In commodities, Brent futures climbed 1.4% to $79 a barrel, while WTI futures hit $75 a barrel for the first time since July, amid an escalating energy crunch across Europe and now China. Base metals are mixed: LME copper rises 0.4%, LME tin and nickel drop over 2%. Spot gold gives back Asia’s gains to trade flat near $1,750/oz In equities, Stoxx 600 is up 0.6%, led by energy and banks, and FTSE 100 rises 0.4%. Germany’s DAX climbs 1% after German elections showed a narrow victory for social democrats, with the Christian Democrats coming in a close second, according to provisional results. S&P 500 futures climb 0.3%, Dow and Nasdaq contracts hold in the green. In FX, the U.S. dollar is up 0.1%, while the British pound, Australian dollar, and Canadian dollar lead G-10 majors, with the Swedish krona and Swiss franc lagging. Base metals are mixed: LME copper rises 0.4%, LME tin and nickel drop over 2%. Spot gold gives back Asia’s gains to trade flat near $1,750/oz Investors will now watch for a raft of economic indicators, including durable goods orders and the ISM manufacturing index this week to gauge the pace of the recovery, as well as bipartisan talks over raising the $28.4 trillion debt ceiling. The U.S. Congress faces a Sept. 30 deadline to prevent the second partial government shutdown in three years, while a vote on the $1 trillion bipartisan infrastructure bill is scheduled for Thursday. On today's calendar we get the latest Euro Area M3 money supply, US preliminary August durable goods orders, core capital goods orders, September Dallas Fed manufacturing activity. We also have a bunch of Fed speakers including Williams, Brainard and Evans. Market Snapshot S&P 500 futures down 0.1% to 4,442.50 STOXX Europe 600 up 0.3% to 464.54 MXAP little changed at 200.75 MXAPJ little changed at 642.52 Nikkei little changed at 30,240.06 Topix down 0.1% to 2,087.74 Hang Seng Index little changed at 24,208.78 Shanghai Composite down 0.8% to 3,582.83 Sensex up 0.2% to 60,164.70 Australia S&P/ASX 200 up 0.6% to 7,384.17 Kospi up 0.3% to 3,133.64 German 10Y yield fell 3.1 bps to -0.221% Euro down 0.3% to $1.1689 Brent Futures up 1.2% to $79.04/bbl Gold spot little changed at $1,750.88 U.S. Dollar Index up 0.15% to 93.47 Top Overnight News from Bloomberg House Speaker Nancy Pelosi put the infrastructure bill on the schedule for Monday under pressure from moderates eager to get the bipartisan bill, which has already passed the Senate, enacted. But progressives -- whose votes are likely vital -- are insisting on progress first on the bigger social-spending bill Olaf Scholz of the center-left Social Democrats defeated Chancellor Angela Merkel’s conservatives in an extremely tight German election, setting in motion what could be months of complex coalition talks to decide who will lead Europe’s biggest economy China’s central bank pumped liquidity into the financial system after borrowing costs rose, as lingering risks posed by China Evergrande Group’s debt crisis hurt market sentiment toward its peers as well Global banks are about to get a comprehensive blueprint for how derivatives worth several hundred trillion dollars may be finally disentangled from the London Interbank Offered Rate Economists warned of lower economic growth in China as electricity shortages worsen in the country, forcing businesses to cut back on production Governor Haruhiko Kuroda says it’s necessary for the Bank of Japan to continue with large-scale monetary easing to achieve the bank’s 2% inflation target The quant revolution in fixed income is here at long last, if the latest Invesco Ltd. poll is anything to go by. With the work-from-home era fueling a boom in electronic trading, the majority of investors in a $31 trillion community say they now deploy factor strategies in bond portfolios A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded somewhat mixed with the region finding encouragement from reopening headlines but with gains capped heading towards month-end, while German election results remained tight and Evergrande uncertainty continued to linger. ASX 200 (+0.6%) was led higher by outperformance in the mining related sectors including energy as oil prices continued to rally amid supply disruptions and views for a stronger recovery in demand with Goldman Sachs lifting its year-end Brent crude forecast from USD 80/bbl to USD 90/bbl. Furthermore, respectable gains in the largest weighted financial sector and details of the reopening roadmap for New South Wales, which state Premier Berijiklian sees beginning on October 11th, further added to the encouragement. Nikkei 225 (Unch) was kept afloat for most of the session after last week’s beneficial currency flows and amid reports that Japan is planning to lift emergency measures in all areas at month-end, although upside was limited ahead of the upcoming LDP leadership race which reports noted are likely to go to a run-off as neither of the two main candidates are likely to achieve a majority although a recent Kyodo poll has Kono nearly there at 47.4% of support vs. nearest contender Kishida at 22.4%. Hang Seng (+0.1%) and Shanghai Comp. (-0.8%) were varied with the mainland choppy amid several moving parts including back-to-back daily liquidity efforts by the PBoC since Sunday and with the recent release of Huawei’s CFO following a deal with US prosecutors. Conversely, Evergrande concerns persisted as Chinese cities reportedly seized its presales to block the potential misuse of funds and its EV unit suffered another double-digit percentage loss after scrapping plans for its STAR Market listing. There were also notable losses to casino names after Macau tightened COVID-19 restrictions ahead of the Golden Week holidays and crypto stocks were hit after China declared crypto activities illegal which resulted in losses to cryptoexchange Huobi which dropped more than 40% in early trade before nursing some of the losses, while there are also concerns of the impact from an ongoing energy crisis in China which prompted the Guangdong to ask people to turn off lights they don't require and use air conditioning less. Finally, 10yr JGBs were flat but have clawed back some of the after-hour losses on Friday with demand sapped overnight amid the mild gains in stocks and lack of BoJ purchases in the market. Elsewhere, T-note futures mildly rebounded off support at 132.00, while Bund futures outperformed the Treasury space amid mild reprieve from this month’s losses and with uncertainty of the composition for the next German coalition. Top Asian News Moody’s Says China to Safeguard Stability Amid Evergrande Issues China’s Tech Tycoons Pledge Allegiance to Xi’s Vision China Power Crunch Hits iPhone, Tesla Production, Nikkei Reports Top Netflix Hit ‘Squid Game’ Sparks Korean Media Stock Surge Bourses in Europe have trimmed the gains seen at the open, albeit the region remains mostly in positive territory (Euro Stoxx 50 +0.4%; Stoxx 600 +0.2%) in the aftermath of the German election and amid the looming month-end. The week also sees several risk events, including the ECB's Sintra Forum, EZ CPI, US PCE and US ISM Manufacturing – not to mention the vote on the bipartisan US infrastructure bill. The mood in Europe contrasts the mixed handover from APAC, whilst US equity futures have also seen more divergence during European trade – with the yield-sensitive NQ (-0.3%) underperforming the cyclically-influenced RTY (+0.4%). There has been no clear catalyst behind the pullback since the Cash open. Delving deeper into Europe, the DAX 40 (+0.6%) outperforms after the tail risk of the Left party being involved in government has now been removed. The SMI (-0.6%) has dipped into the red as defensive sectors remain weak, with the Healthcare sector towards to bottom of the bunch alongside Personal & Household Goods. On the flip side, the strength in the price-driven Oil & Gas and yield-induced Banks have kept the FTSE 100 (+0.2%) in green, although the upside is capped by losses in AstraZeneca (-0.4%) and heavy-weight miners, with the latter a function of declining base metal prices. The continued retreat in global bonds has also hit the Tech sector – which resides as the laggard at the time of writing. In terms of individual movers, Rolls-Royce (+8.5%) trades at the top of the FTSE 100 after winning a USD 1.9bln deal from the US Air Force. IWG (+6.5%) also extended on earlier gains following reports that founder and CEO Dixon is said to be mulling a multibillion-pound break-up of the Co. that would involve splitting it into several distinct companies. Elsewhere, it is worth being cognizant of the current power situation in China as the energy crisis spreads, with Global Times also noting that multiple semiconductor suppliers for Tesla (Unch), Apple (-0.4% pre-market) and Intel (Unch), which have manufacturing plants in the Chinese mainland, recently announced they would suspend their factories' operations to follow local electricity use policies. Top European News U.K. Relaxes Antitrust Rules, May Bring in Army as Pumps Run Dry Magnitude 5.8 Earthquake Hits Greek Island of Crete German Stocks Rally as Chances Wane for Left-Wing Coalition German Landlords Rise as Left’s Weakness Trumps Berlin Poll In FX, the Aussie is holding up relatively well on a couple of supportive factors, including a recovery in commodity prices overnight and the Premier of NSW setting out a timetable to start lifting COVID lockdown and restrictions from October 11 with an end date to completely re-open on December 1. However, Aud/Usd is off best levels against a generally firm Greenback on weakness and underperformance elsewhere having stalled around 0.7290, while the Loonie has also run out of momentum 10 pips or so from 1.2600 alongside WTI above Usd 75/brl. DXY/EUR/CHF - Although the risk backdrop is broadly buoyant and not especially supportive, the Buck is gleaning traction and making gains at the expense of others, like the Euro that is gradually weakening in wake of Sunday’s German election that culminated in narrow victory for the SPD Party over the CDU/CSU alliance, but reliant on the Greens and FDP to form a Government. Eur/Usd has lost 1.1700+ status and is holding a fraction above recent lows in the form of a double bottom at 1.1684, but the Eur/Gbp cross is looking even weaker having breached several technical levels like the 100, 21 and 50 DMAs on the way down through 0.8530. Conversely, Eur/Chf remains firm around 1.0850, and largely due to extended declines in the Franc following last week’s dovish SNB policy review rather than clear signs of intervention via the latest weekly Swiss sight deposit balances. Indeed, Usd/Chf is now approaching 0.9300 again and helping to lift the Dollar index back up towards post-FOMC peaks within a 93.494-206 range in advance of US durable goods data, several Fed speakers, the Dallas Fed manufacturing business index and a double dose of T-note supply (Usd 60 bn 2 year and Usd 61 bn 5 year offerings). GBP/NZD/JPY - As noted above, the Pound is benefiting from Eur/Gbp tailwinds, but also strength in Brent to offset potential upset due to the UK’s energy supply issues, so Cable is also bucking the broad trend and probing 1.3700. However, the Kiwi is clinging to 0.7000 in the face of Aud/Nzd headwinds that are building on a break of 1.0350, while the Yen is striving keep its head afloat of another round number at 111.00 as bond yields rebound and curves resteepen. SCANDI/EM - The Nok is also knocking on a new big figure, but to the upside vs the Eur at 10.0000 following the hawkish Norges Bank hike, while the Cnh and Cny are holding up well compared to fellow EM currencies with loads of liquidity from the PBoC and some underlying support amidst the ongoing mission to crackdown on speculators in the crypto and commodity space. In commodities, WTI and Brent front-month futures kicked the week off on a firmer footing, which saw Brent Nov eclipse the USD 79.50/bbl level (vs low 78.21/bbl) whilst its WTI counterpart hovers north of USD 75/bbl (vs low 74.16/bbl). The complex could be feeling some tailwinds from the supply crunch in Britain – which has lead petrol stations to run dry as demand outpaces the supply. Aside from that, the landscape is little changed in the run-up to the OPEC+ meeting next Monday, whereby ministers are expected to continue the planned output hikes of 400k BPD/m. On that note, there have been reports that some African nations are struggling to pump more oil amid delayed maintenance and low investments, with Angola and Nigeria said to average almost 300k BPD below their quota. On the Iranian front, IAEA said Iran permitted it to service monitoring equipment during September 20th-22nd with the exception of the centrifuge component manufacturing workshop at the Tesa Karaj facility, with no real updates present regarding the nuclear deal talks. In terms of bank commentary, Goldman Sachs raised its year-end Brent crude forecast by USD 10 to USD 90/bbl and stated that Hurricane Ida has more than offset the ramp-up in OPEC+ output since July with non-OPEC+, non-shale output continuing to disappoint, while it added that global oil demand-deficit is greater than expected with a faster than anticipated demand recovery from the Delta variant. Conversely, Citi said in the immediate aftermath of skyrocketing prices, it is logical to be bearish on crude oil and nat gas today and forward curves for later in 2022, while it added that near-term global oil inventories are low and expected to continue declining maybe through Q1 next year. Over to metals, spot gold and silver have fallen victim to the firmer Dollar, with spot gold giving up its overnight gains and meandering around USD 1,750/oz (vs high 1760/oz) while spot silver briefly dipped under USD 22.50/oz (vs high 22.73/oz). Turning to base metals, China announced another round of copper, zinc and aluminium sales from state reserves – with amounts matching the prior sales. LME copper remains within a tight range, but LME tin is the outlier as it gave up the USD 35k mark earlier in the session. Finally, the electricity crunch in China has seen thermal coal prices gain impetus amid tight domestic supply, reduced imports and increased demand. US Event Calendar 8:30am: Aug. Cap Goods Ship Nondef Ex Air, est. 0.5%, prior 0.9% 8:30am: Aug. Cap Goods Orders Nondef Ex Air, est. 0.4%, prior 0.1% 8:30am: Aug. -Less Transportation, est. 0.5%, prior 0.8% 8:30am: Aug. Durable Goods Orders, est. 0.6%, prior -0.1% 10:30am: Sept. Dallas Fed Manf. Activity, est. 11.0, prior 9.0 Central Banks 8am: Fed’s Evans Speaks at Annual NABE Conference 9am: Fed’s Williams Makes Opening Remarks at Conference on... 12pm: Fed’s Williams Discusses the Economic Outlook 12:50pm: Fed’s Brainard Discusses Economic Outlook at NABE Conference DB's Jim Reid concludes the overnight wrap Straight to the German elections this morning where unlike the Ryder Cup the race was tight. The centre-left SPD have secured a narrow lead according to provisional results, which give them 25.7% of the vote, ahead of Chancellor Merkel’s CDU/CSU bloc, which are on 24.1%. That’s a bit narrower than the final polls had suggested (Politico’s average put the SPD ahead by 25-22%), but fits with the slight narrowing we’d seen over the final week of the campaign. Behind them, the Greens are in third place, with a record score of 14.8%, which puts them in a key position when it comes to forming a majority in the new Bundestag, and the FDP are in fourth place currently on 11.5%. Although the SPD appear to be in first place the different parties will now enter coalition negotiations to try to form a governing majority. Both Olaf Scholz and the CDU’s Armin Laschet have said that they will seek to form a government, and to do that they’ll be looking to the Greens and the FDP as potential coalition partners, since those are the most realistic options given mutual policy aims. So the critical question will be whether it’s the SPD or the CDU/CSU that can convince these two to join them in coalition. On the one hand, the Greens have a stronger policy overlap with the SPD, and governed with them under Chancellor Schröder from 1998-2005, but the FDP seems more in line with the Conservatives, and were Chancellor Merkel’s junior coalition partner from 2009-13.  So it’s likely that the FDP and the Greens will talk to each other before talking to either of the two biggest parties. For those wanting more information, our research colleagues in Frankfurt have released a post-election update (link here) on the results and what they mean. An important implication of last night’s result is that (at time of writing) it looks as though a more left-wing coalition featuring the SPD, the Greens and Die Linke would not be able for form a majority in the next Bundestag. So the main options left are for the FDP and the Greens to either join the SPD in a “traffic light” coalition or instead join the CDU/CSU in a “Jamaica” coalition. The existing grand coalition of the SPD and the CDU/CSU would actually have a majority as well, but both parties have signalled that they don't intend to continue this. That said, last time in 2017, a grand coalition wasn’t expected after that result, and there were initially attempts to form a Jamaica coalition. But once those talks proved unsuccessful, discussions on another grand coalition began once again. In terms of interesting snippets, this election marks the first time the SPD have won the popular vote since 2002, which is a big turnaround given that the party were consistently polling in third place over the first half of this year. However, it’s also the worst ever result for the CDU/CSU, and also marks the lowest combined share of the vote for the two big parties in post-war Germany, which mirrors the erosion of the traditional big parties we’ve seen elsewhere in continental Europe. Interestingly, the more radical Die Linke and AfD parties on the left and the right respectively actually did worse than in 2017, so German voters have remained anchored in the centre, and there’s been no sign of a populist resurgence. This also marks a record result for the Greens, who’ve gained almost 6 percentage points relative to four years ago, but that’s still some way down on where they were polling earlier in the spring (in the mid-20s), having lost ground in the polls throughout the final weeks of the campaign. Markets in Asia have mostly started the week on a positive note, with the Hang Seng (+0.28%), Nikkei (+0.04%), and the Kospi (+0.25%) all moving higher. That said, the Shanghai Comp is down -1.30%, as materials (-5.91%) and industrials (-4.24%) in the index have significantly underperformed, which comes amidst power curbs in the country. In the US and Europe however, futures are pointing higher, with those on the S&P 500 up +0.37%, and those on the DAX up +0.51%. Moving onto another big current theme, all the talk at the moment is about supply shocks and it’s not inconceivable that things could get very messy on this front over the weeks and months ahead. However, I think the discussion on supply in isolation misses an important component and that is demand. In short we had a pandemic that effectively closed the global economy and interrupted numerous complicated supply chains. The global authorities massively stimulated demand relative to where it would have been in this environment and in some areas have created more demand than there would have been at this stage without Covid. However the supply side has not come back as rapidly. As such you’re left with demand outstripping supply. So I think it’s wrong to talk about a global supply shock in isolation. It’s not as catchy but this is a “demand is much higher than it should be in a pandemic with lockdowns, but supply hasn't been able to fully respond” world. If the authorities hadn’t responded as aggressively we would have plenty of supply for the demand and a lot of deflation. Remember negative oil prices in the early stages of the pandemic. So for me every time you hear the phrase “supply shock” remember the phenomenal demand there is relative to what the steady state might have been. This current “demand > supply” at lower levels of activity than we would have had without covid is going to cause central banks a huge headache over the coming months. Should they tighten due to what is likely to be a prolonged period of higher prices than people thought even a couple of months ago or should they look to the potential demand destruction of higher prices? The risk of a policy error is high and the problem with forward guidance is that markets demand to know now what they might do over the next few months and quarters so it leaves them exposed a little in uncertain times. This problem has crept up fast on markets with an epic shift in sentiment in the rates market after the BoE meeting Thursday lunchtime. I would say they were no more hawkish than the Fed the night before but the difference is that the Fed are still seemingly at least a year from raising rates and a lot can happen in that period whereas the BoE could now raise this year (more likely February). That has focused the minds of global investors, especially as Norway became the first central bank among the G-10 currencies to raise rates on the same day. Towards the end of this note we’ll recap the moves in markets last week including a +15bps climb in US 10yr yields in the last 48 hours of last week. One factor that will greatly influence yields over the week ahead is the ongoing US debt ceiling / government shutdown / infrastructure bill saga that is coming to a head as we hit October on Friday - the day that there could be a partial government shutdown without action by the close on Thursday. It’s a fluid situation. So far the the House of Representatives has passed a measure that would keep the government funded through December 3, but it also includes a debt ceiling suspension, so Republicans are expected to block this in the Senate if it still includes that. The coming week could also see the House of Representatives vote on the bipartisan infrastructure bill (c.$550bn) that’s already gone through the Senate, since Speaker Pelosi had previously committed to moderate House Democrats that there’d be a vote on the measure by today. She reaffirmed that yesterday although the timing may slip. However, there remain divisions among House Democrats, with some progressives not willing to support it unless the reconciliation bill also passes. In short we’ve no idea how this get resolved but most think some compromise will be reached before Friday. Pelosi yesterday said it “seems self-evident” that the reconciliation bill won’t reach the $3.5 trillion hoped for by the administration which hints at some compromise. Overall the sentiment has seemingly shifted a little more positively on there being some progress over the weekend. From politics to central banks and following a busy week of policy meetings, there are an array of speakers over the week ahead. One of the biggest highlights will be the ECB’s Forum on Central Banking, which is taking place as an online event on Tuesday and Wednesday, and the final policy panel on Wednesday will include Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ Governor Kuroda. Otherwise, Fed Chair Powell will also be testifying before the Senate Banking Committee on Tuesday, alongside Treasury Secretary Yellen, and on Monday, ECB President Lagarde will be appearing before the European Parliament’s Committee on Economic and Monetary Affairs as part of the regular Monetary Dialogue. There are lots of other Fed speakers this week and they can add nuances to the taper and dot plot debates. Finally on the data front, there’ll be further clues about the state of inflation across the key economies, as the Euro Area flash CPI estimate for September is coming out on Friday. Last month's reading showed that Euro Area inflation rose to +3.0% in August, which was its highest level in nearly a decade. Otherwise, there’s also the manufacturing PMIs from around the world on Friday given it’s the start of the month, along with the ISM reading from the US, and Tuesday will see the release of the Conference Board’s consumer confidence reading for the US as well. For the rest of the week ahead see the day-by-day calendar of events at the end. Back to last week now and the highlight was the big rise in global yields which quickly overshadowed the ongoing Evergrande story. Bonds more than reversed an early week rally as yields rose for a fifth consecutive week. US 10yr Treasury yields ended the week up +8.9bps to finish at 1.451% - its highest level since the start of July and +15bps off the Asian morning lows on Thursday. The move saw the 2y10y yield curve steepen +4.5bps, with the spread reaching its widest point since July as well. However, at the longer end of the curve the 5y30y spread ended the week largely unchanged after a volatile week. It was much flatter shortly following the FOMC and steeper following the BoE. Bond yields in Europe moved higher as well with the central bank moves again being the major impetus especially in the UK. 10yr gilt yields rose +7.9bps to +0.93% and the short end moved even more with the 2yr yield rising +9.4bps to 0.38% as the BoE’s inflation forecast and rhetoric caused investors to pull forward rate hike expectations. Yields on 10yr bunds rose +5.2bps, whilst those on the OATs (+6.3bps) and BTPs (+5.7bps) increased substantially as well, but not to the same extent as their US and UK counterparts. While sovereign debt sold off, global equity markets recovered following two consecutive weeks of declines. Although markets entered the week on the back foot following the Evergrande headlines from last weekend, risk sentiment improved at the end of the week, especially toward cyclical industries. The S&P 500 gained +0.51% last week (+0.15% Friday), nearly recouping the prior week’s loss. The equity move was primarily led by cyclicals as higher bond yields helped US banks (+3.43%) outperform, while higher commodity prices saw the energy (+4.46%) sector gain sharply. Those higher bond yields led to a slight rerating of growth stocks as the tech megacap NYFANG index fell back -0.46% on the week and the NASDAQ underperformed, finishing just better than unchanged (+0.02). Nonetheless, with four trading days left in September the S&P 500 is on track for its third losing month this year, following January and June. European equities rose moderately last week, as the STOXX 600 ended the week +0.31% higher despite Friday’s -0.90% loss. Bourses across the continent outperformed led by particularly strong performances by the IBEX (+1.28%) and CAC 40 (+1.04%). There was limited data from Friday. The Ifo's business climate indicator in Germany fell slightly from the previous month to 98.8 (99.0 expected) from 99.4 on the back a lower current assessment even though business expectations was higher than expected. In Italy, consumer confidence rose to 119.6 (115.8 expected), up just over 3pts from August and at its highest level on record (since 1995). Tyler Durden Mon, 09/27/2021 - 08:09.....»»

Category: personnelSource: nytSep 27th, 2021

Futures Bounce On Evergrande Reprieve With Fed Looming

Futures Bounce On Evergrande Reprieve With Fed Looming Despite today's looming hawkish FOMC meeting in which Powell is widely expected to unveil that tapering is set to begin as soon as November and where the Fed's dot plot may signal one rate hike in 2022, futures climbed as investor concerns over China's Evergrande eased after the property developer negotiated a domestic bond payment deal. Commodities rallied while the dollar was steady. Contracts on the S&P 500 and Nasdaq 100 flipped from losses to gains as China’s central bank boosted liquidity when it injected a gross 120BN in yuan, the most since January... ... and investors mulled a vaguely-worded statement from the troubled developer about an interest payment.  S&P 500 E-minis were up 23.0 points, or 0.53%, at 7:30 a.m. ET. Dow E-minis were up 199 points, or 0.60%, and Nasdaq 100 E-minis were up 44.00 points, or 0.29%. Among individual stocks, Fedex fell 5.8% after the delivery company cut its profit outlook on higher costs and stalled growth in shipments. Morgan Stanley says it sees the company’s 1Q issues getting “tougher from here.” Commodity-linked oil and metal stocks led gains in premarket trade, while a slight rise in Treasury yields supported major banks. However, most sectors were nursing steep losses in recent sessions. Here are some of the biggest U.S. movers: Adobe (ADBE US) down 3.1% after 3Q update disappointed the high expectations of investors, though the broader picture still looks solid, Morgan Stanley said in a note Freeport McMoRan (FCX US), Cleveland- Cliffs (CLF US), Alcoa (AA US) and U.S. Steel (X US) up 2%-3% premarket, following the path of global peers as iron ore prices in China rallied Aethlon Medical (AEMD US) and Exela Technologies (XELAU US) advance along with other retail traders’ favorites in the U.S. premarket session. Aethlon jumps 21%; Exela up 8.3% Other so-called meme stocks also rise: ContextLogic +1%; Clover Health +0.9%; Naked Brand +0.9%; AMC +0.5% ReWalk Robotics slumps 18% in U.S. premarket trading, a day after nearly doubling in value Stitch Fix (SFIX US) rises 15.7% in light volume after the personal styling company’s 4Q profit and sales blew past analysts’ expectations Hyatt Hotels (H US) seen opening lower after the company launches a seven-million-share stock offering Summit Therapeutics (SMMT US) shares fell as much as 17% in Tuesday extended trading after it said the FDA doesn’t agree with the change to the primary endpoint that has been implemented in the ongoing Phase III Ri-CoDIFy studies when combining the studies Marin Software (MRIN US) surged more than 75% Tuesday postmarket after signing a new revenue-sharing agreement with Google to develop its enterprise technology platforms and software products The S&P 500 had fallen for 10 of the past 12 sessions since hitting a record high, as fears of an Evergrande default exacerbated seasonally weak trends and saw investors pull out of stocks trading at lofty valuations. The Nasdaq fell the least among its peers in recent sessions, as investors pivoted back into big technology names that had proven resilient through the pandemic. Focus now turns to the Fed's decision, due at 2 p.m. ET where officials are expected to signal a start to scaling down monthly bond purchases (see our preview here).  The Fed meeting comes after a period of market volatility stoked by Evergrande’s woes. China’s wider property-sector curbs are also feeding into concerns about a slowdown in the economic recovery from the pandemic. “Chair Jerome Powell could hint at the tapering approaching shortly,” said Sébastien Barbé, a strategist at Credit Agricole CIB. “However, given the current uncertainty factors (China property market, Covid, pace of global slowdown), the Fed should remain cautious when it comes to withdrawing liquidity support.” Meanwhile, confirming what Ray Dalio said that the taper will just bring more QE, Governing Council member Madis Muller said the  European Central Bank may boost its regular asset purchases once the pandemic-era emergency stimulus comes to an end. “Dovish signals could unwind some of the greenback’s gains while offering relief to stock markets,” Han Tan, chief market analyst at Exinity Group, wrote in emailed comments. A “hawkish shift would jolt markets, potentially pushing Treasury yields and the dollar past the upper bound of recent ranges, while gold and equities would sell off hunting down the next levels of support.” China avoided a major selloff as trading resumed following a holiday, after the country’s central bank boosted its injection of short-term cash into the financial system. MSCI’s Asia-Pacific index declined for a third day, dragged lower by Japan. Stocks were also higher in Europe. Basic resources - which bounced from a seven month low - and energy were among the leading gainers in the Stoxx Europe 600 index as commodity prices steadied after Beijing moved to contain fears of a spiraling debt crisis. Entain Plc rose more than 7%, extending Tuesday’s gain as it confirmed it received a takeover proposal from DraftKings Inc. Peer Flutter Entertainment Plc climbed after settling a legal dispute.  Here are some of the biggest European movers today: Entain shares jump as much as 11% after DraftKings Inc. offered to acquire the U.K. gambling company for about $22.4 billion. Vivendi rises as much as 3.1% in Paris, after Tuesday’s spinoff of Universal Music Group. Legrand climbs as much as 2.1% after Exane BNP Paribas upgrades to outperform and raises PT to a Street-high of EU135. Orpea shares falls as much as 2.9%, after delivering 1H results that Jefferies (buy) says were a “touch” below consensus. Bechtle slides as much as 5.1% after Metzler downgrades to hold from buy, saying persistent supply chain problems seem to be weighing on growth. Sopra Steria drops as much as 4.1% after Stifel initiates coverage with a sell, citing caution on company’s M&A strategy Despite the Evergrande announcement, Asian stocks headed for their longest losing streak in more than a month amid continued China-related concerns, with traders also eying policy decisions from major central banks. The MSCI Asia Pacific Index dropped as much as 0.7% in its third day of declines, with TSMC and Keyence the biggest drags. China’s CSI 300 tumbled as much as 1.9% as the local market reopened following a two-day holiday. However, the gauge came off lows after an Evergrande unit said it will make a bond interest payment and as China’s central bank boosted liquidity.  Taiwan’s equity benchmark led losses in Asia on Wednesday, dragged by TSMC after a two-day holiday, while markets in Hong Kong and South Korea were closed. Key stock gauges in Australia, Indonesia and Vietnam rose “A liquidity injection from the People’s Bank of China accompanied the Evergrande announcement, which only served to bolster sentiment further,” according to DailyFX’s Thomas Westwater and Daniel Dubrovsky. “For now, it appears that market-wide contagion risk linked to a potential Evergrande collapse is off the table.” Japanese equities fell for a second day amid global concern over China’s real-estate sector, as the Bank of Japan held its key stimulus tools in place while flagging pressures on the economy. Electronics makers were the biggest drag on the Topix, which declined 1%. Daikin and Fanuc were the largest contributors to a 0.7% loss in the Nikkei 225. The BOJ had been expected to maintain its policy levers ahead of next week’s key ruling party election. Traders are keenly awaiting the Federal Reserve’s decision due later for clues on the U.S. central banks plan for tapering stimulus. “Markets for some time have been convinced that the BOJ has reached the end of the line on normalization and will remain in a holding pattern on policy until at least April 2023 when Governor Kuroda is scheduled to leave,” UOB economist Alvin Liew wrote in a note. “Attention for the BOJ will now likely shift to dealing with the long-term climate change issues.” In the despotic lockdown regime that is Australia, the S&P/ASX 200 index rose 0.3% to close at 7,296.90, reversing an early decline in a rally led by mining and energy stocks. Banks closed lower for the fourth day in a row. Champion Iron was among the top performers after it was upgraded at Citi. IAG was among the worst performers after an earthquake caused damage to buildings in Melbourne. In New Zealand, the S&P/NZX 50 index rose 0.3% to 13,215.80 In FX, commodity currencies rallied as concerns about China Evergrande Group’s debt troubles eased as China’s central bank boosted liquidity and investors reviewed a statement from the troubled developer about an interest payment. Overnight implied volatility on the pound climbed to the highest since March ahead of Bank of England’s meeting on Thursday. The British pound weakened after Business Secretary Kwasi Kwarteng warnedthat people should prepare for longer-term high energy prices amid a natural-gas shortage that sent power costs soaring. Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices. Overnight volatility in the euro rises above 10% for the first time since July ahead of the Federal Reserve’s monetary policy decision announcement. The Aussie jumped as much as 0.5% as iron-ore prices rebounded. Spot surged through option-related selling at 0.7240 before topping out near 0.7265 strikes expiring Wednesday, according to Asia- based FX traders.  Elsewhere, the yen weakened and commodity-linked currencies such as the Australian dollar pushed higher. In rates, the dollar weakened against most of its Group-of-10 peers. Treasury futures were under modest pressure in early U.S. trading, leaving yields cheaper by ~1.5bp from belly to long-end of the curve. The 10-year yield was at ~1.336% steepening the 2s10s curve by ~1bp as the front-end was little changed. Improved risk appetite weighed; with stock futures have recovering much of Tuesday’s losses as Evergrande concerns subside. Focal point for Wednesday’s session is FOMC rate decision at 2pm ET.   FOMC is expected to suggest it will start scaling back asset purchases later this year, while its quarterly summary of economic projections reveals policy makers’ expectations for the fed funds target in coming years in the dot-plot update; eurodollar positions have emerged recently that anticipate a hawkish shift Bitcoin dropped briefly below $40,000 for the first time since August amid rising criticism from regulators, before rallying as the mood in global markets improved. In commodities, Iron ore halted its collapse and metals steadied. Oil advanced for a second day. Bitcoin slid below $40,000 for the first time since early August before rebounding back above $42,000.   To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Market Snapshot S&P 500 futures up 0.4% to 4,362.25 STOXX Europe 600 up 0.5% to 461.19 MXAP down 0.7% to 199.29 MXAPJ down 0.4% to 638.39 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.4% to 3,628.49 Sensex little changed at 59,046.84 Australia S&P/ASX 200 up 0.3% to 7,296.94 Kospi up 0.3% to 3,140.51 Brent Futures up 1.5% to $75.47/bbl Gold spot up 0.0% to $1,775.15 U.S. Dollar Index little changed at 93.26 German 10Y yield rose 0.6 bps to -0.319% Euro little changed at $1.1725 Top Overnight News from Bloomberg What would it take to knock the U.S. recovery off course and send Federal Reserve policy makers back to the drawing board? Not much — and there are plenty of candidates to deliver the blow The European Central Bank will discuss boosting its regular asset purchases once the pandemic-era emergency stimulus comes to an end, but any such increase is uncertain, Governing Council member Madis Muller said Investors seeking hints about how Beijing plans to deal with China Evergrande Group’s debt crisis are training their cross hairs on the central bank’s liquidity management A quick look at global markets courtesy of Newsquawk Asian equity markets traded mixed as caution lingered ahead of upcoming risk events including the FOMC, with participants also digesting the latest Evergrande developments and China’s return to the market from the Mid-Autumn Festival. ASX 200 (+0.3%) was positive with the index led higher by the energy sector after a rebound in oil prices and as tech also outperformed, but with gains capped by weakness in the largest-weighted financials sector including Westpac which was forced to scrap the sale of its Pacific businesses after failing to secure regulatory approval. Nikkei 225 (-0.7%) was subdued amid the lack of fireworks from the BoJ announcement to keep policy settings unchanged and ahead of the upcoming holiday closure with the index only briefly supported by favourable currency outflows. Shanghai Comp. (+0.4%) was initially pressured on return from the long-weekend and with Hong Kong markets closed, but pared losses with risk appetite supported by news that Evergrande’s main unit Hengda Real Estate will make coupon payments due tomorrow, although other sources noted this is referring to the onshore bond payments valued around USD 36mln and that there was no mention of the offshore bond payments valued at USD 83.5mln which are also due tomorrow. Meanwhile, the PBoC facilitated liquidity through a CNY 120bln injection and provided no surprises in keeping its 1-year and 5-year Loan Prime Rates unchanged for the 17th consecutive month at 3.85% and 4.65%, respectively. Finally, 10yr JGBs were flat amid the absence of any major surprises from the BoJ policy announcement and following the choppy trade in T-notes which were briefly pressured in a knee-jerk reaction to the news that Evergrande’s unit will satisfy its coupon obligations tomorrow, but then faded most of the losses as cautiousness prevailed. Top Asian News Gold Steady as Traders Await Outcome of Fed Policy Meeting Evergrande Filing on Yuan Bond Interest Leaves Analysts Guessing Singapore Category E COE Price Rises to Highest Since April 2014 Asian Stocks Fall for Third Day as Focus Turns to Central Banks European equities (Stoxx 600 +0.5%) trade on a firmer footing in the wake of an encouraging APAC handover. Focus overnight was on the return of Chinese participants from the Mid-Autumn Festival and news that Evergrande’s main unit, Hengda Real Estate will make coupon payments due tomorrow; however, we await indication as to whether they will meet Thursday’s offshore payment deadline as well. Furthermore, the PBoC facilitated liquidity through a CNY 120bln injection whilst keeping its 1-year and 5-year Loan Prime Rates unchanged (as expected). Note, despite gaining yesterday and today, thus far, the Stoxx 600 is still lower to the tune of 0.7% on the week. Stateside, futures are also trading on a firmer footing ahead of today’s FOMC policy announcement, at which, market participants will be eyeing any clues for when the taper will begin and digesting the latest dot plot forecasts. Furthermore, the US House voted to pass the bill to fund the government through to December 3rd and suspend the debt limit to end-2022, although this will likely be blocked by Senate Republicans. Back to Europe, sectors are mostly firmer with outperformance in Basic Resources and Oil & Gas amid upside in the metals and energy complex. Elsewhere, Travel & Leisure is faring well amid further upside in Entain (+6.1%) with the Co. noting it rejected an earlier approach from DraftKings at GBP 25/shr with the new offer standing at GBP 28/shr. Additionally for the sector, Flutter Entertainment (+4.1%) are trading higher after settling the legal dispute between the Co. and Commonwealth of Kentucky. Elsewhere, in terms of deal flow, Iliad announced that it is to acquire UPC Poland for around USD 1.8bln. Top European News Energy Cost Spike Gets on EU Ministers’ Green Deal Agenda Travel Startup HomeToGo Gains in Frankfurt Debut After SPAC Deal London Stock Exchange to Shut Down CurveGlobal Exchange EU Banks Expected to Add Capital for Climate Risk, EBA Says In FX, trade remains volatile as this week’s deluge of global Central Bank policy meetings continues to unfold amidst fluctuations in broad risk sentiment from relatively pronounced aversion at various stages to a measured and cautious pick-up in appetite more recently. Hence, the tide is currently turning in favour of activity, cyclical and commodity currencies, albeit tentatively in the run up to the Fed, with the Kiwi and Aussie trying to regroup on the 0.7000 handle and 0.7350 axis against their US counterpart, and the latter also striving to shrug off negative domestic impulses like a further decline below zero in Westpac’s leading index and an earthquake near Melbourne. Next up for Nzd/Usd and Aud/Usd, beyond the FOMC, trade data and preliminary PMIs respectively. DXY/CHF/EUR/CAD - Notwithstanding the overall improvement in market tone noted above, or another major change in mood and direction, the Dollar index appears to have found a base just ahead of 93.000 and ceiling a similar distance away from 93.500, as it meanders inside those extremes awaiting US existing home sales that are scheduled for release before the main Fed events (policy statement, SEP and post-meeting press conference from chair Powell). Indeed, the Franc, Euro and Loonie have all recoiled into tighter bands vs the Greenback, between 0.9250-26, 1.1739-17 and 1.2831-1.2770, but with the former still retaining an underlying bid more evident in the Eur/Chf cross that is consolidating under 1.0850 and will undoubtedly be acknowledged by the SNB tomorrow. Meanwhile, Eur/Usd has hardly reacted to latest ECB commentary from Muller underpinning that the APP is likely to be boosted once the PEPP envelope is closed, though Usd/Cad is eyeing a firm rebound in oil prices in conjunction with hefty option expiry interest at the 1.2750 strike (1.8 bn) that may prevent the headline pair from revisiting w-t-d lows not far beneath the half round number. GBP/JPY - The major laggards, as Sterling slips slightly further beneath 1.3650 against the Buck to a fresh weekly low and Eur/Gbp rebounds from circa 0.8574 to top 0.8600 on FOMC day and T-1 to super BoE Thursday. Elsewhere, the Yen has lost momentum after peaking around 109.12 and still not garnering sufficient impetus to test 109.00 via an unchanged BoJ in terms of all policy settings and guidance, as Governor Kuroda trotted out the no hesitation to loosen the reins if required line for the umpteenth time. However, Usd/Jpy is holding around 109.61 and some distance from 1.1 bn option expiries rolling off between 109.85-110.00 at the NY cut. SCANDI/EM - Brent’s revival to Usd 75.50+/brl from sub-Usd 73.50 only yesterday has given the Nok another fillip pending confirmation of a Norges Bank hike tomorrow, while the Zar has regained some poise with the aid of firmer than forecast SA headline and core CPI alongside a degree of retracement following Wednesday’s breakdown of talks on a pay deal for engineering workers that prompted the union to call a strike from early October. Similarly, the Cnh and Cny by default have regrouped amidst reports that the CCP is finalising details to restructure Evergrande into 3 separate entities under a plan that will see the Chinese Government take control. In commodities, WTI and Brent are firmer this morning though once again fresh newsflow for the complex has been relatively slim and largely consisting of gas-related commentary; as such, the benchmarks are taking their cue from the broader risk tone (see equity section). The improvement in sentiment today has brought WTI and Brent back in proximity to being unchanged on the week so far as a whole; however, the complex will be dictated directly by the EIA weekly inventory first and then indirectly, but perhaps more pertinently, by today’s FOMC. On the weekly inventories, last nights private release was a larger than expected draw for the headline and distillate components, though the Cushing draw was beneath expectations; for today, consensus is a headline draw pf 2.44mln. Moving to metals where the return of China has seen a resurgence for base metals with LME copper posting upside of nearly 3.0%, for instance. Albeit there is no fresh newsflow for the complex as such, so it remains to be seen how lasting this resurgence will be. Finally, spot gold and silver are firmer but with the magnitude once again favouring silver over the yellow metal. US Event Calendar 10am: Aug. Existing Home Sales MoM, est. -1.7%, prior 2.0% 2pm: Sept. FOMC Rate Decision (Lower Boun, est. 0%, prior 0% DB's Jim Reid concludes the overnight wrap All eyes firmly on China this morning as it reopens following a 2-day holiday. As expected the indices there have opened lower but the scale of the declines are being softened by the PBoC increasing its short term cash injections into the economy. They’ve added a net CNY 90bn into the system. On Evergrande, we’ve also seen some positive headlines as the property developers’ main unit Hengda Real Estate Group has said that it will make coupon payment for an onshore bond tomorrow. However, the exchange filing said that the interest payment “has been resolved via negotiations with bondholders off the clearing house”. This is all a bit vague and doesn’t mention the dollar bond at this stage. Meanwhile, Bloomberg has reported that Chinese authorities have begun to lay the groundwork for a potential restructuring that could be one of the country’s biggest, assembling accounting and legal experts to examine the finances of the group. All this follows news from Bloomberg yesterday that Evergrande missed interest payments that had been due on Monday to at least two banks. In terms of markets the CSI (-1.11%), Shanghai Comp (-0.29%) and Shenzhen Comp (-0.53%) are all lower but have pared back deeper losses from the open. We did a flash poll in the CoTD yesterday (link here) and after over 700 responses in a couple of hours we found only 8% who we thought Evergrande would still be impacting financial markets significantly in a month’s time. 24% thought it would be slightly impacting. The other 68% thought limited or no impact. So the world is relatively relaxed about contagion risk for now. The bigger risk might be the knock on impact of weaker Chinese growth. So that’s one to watch even if you’re sanguine on the systemic threat. Craig Nicol in my credit team did a good note yesterday (link here) looking at the contagion risk to the broader HY market. I thought he summed it up nicely as to why we all need to care one way or another in saying that “Evergrande is the largest corporate, in the largest sector, of the second largest economy in the world”. For context AT&T is the largest corporate borrower in the US market and VW the largest in Europe. Turning back to other Asian markets now and the Nikkei (-0.65%) is down but the Hang Seng (+0.51%) and Asx (+0.58%) are up. South Korean markets continue to remain closed for a holiday. Elsewhere, yields on 10y USTs are trading flattish while futures on the S&P 500 are up +0.10% and those on the Stoxx 50 are up +0.21%. Crude oil prices are also up c.+1% this morning. In other news, the Bank of Japan policy announcement overnight was a non-event as the central bank maintained its yield curve target while keeping the policy rate and asset purchases plan unchanged. The central bank also unveiled more details of its green lending program and said that it would immediately start accepting applications and would begin making the loans in December. The relatively calm Asian session follows a stabilisation in markets yesterday following their rout on Monday as investors looked forward to the outcome of the Fed’s meeting later today. That said, it was hardly a resounding performance, with the S&P 500 unable to hold on to its intraday gains and ending just worse than unchanged after the -1.70% decline the previous day as investors remained vigilant as to the array of risks that continue to pile up on the horizon. One of these is in US politics and legislators seem no closer to resolving the various issues surrounding a potential government shutdown at the end of the month, along with a potential debt ceiling crisis in October, which is another flashing alert on the dashboard for investors that’s further contributing to weaker sentiment right now. Looking ahead now, today’s main highlight will be the latest Federal Reserve decision along with Chair Powell’s subsequent press conference, with the policy decision out at 19:00 London time. Markets have been on edge for any clues about when the Fed might begin to taper asset purchases, but concern about tapering actually being announced at this meeting has dissipated over recent weeks, particularly after the most recent nonfarm payrolls in August came in at just +235k, and the monthly CPI print also came in beneath consensus expectations for the first time since November. In terms of what to expect, our US economists write in their preview (link here) that they see the statement adopting Chair Powell’s language that a reduction in the pace of asset purchases is appropriate “this year”, so long as the economy remains on track. They see Powell maintaining optionality about the exact timing of that announcement, but they think that the message will effectively be that the bar to pushing the announcement beyond November is relatively high in the absence of any material downside surprises. This meeting also sees the release of the FOMC’s latest economic projections and the dot plot, where they expect there’ll be an upward drift in the dots that raises the number of rate hikes in 2023 to 3, followed by another 3 increases in 2024. Back to yesterday, and as mentioned US equity markets fell for a second straight day after being unable to hold on to earlier gains, with the S&P 500 slightly lower (-0.08%). High-growth industries outperformed with biotech (+0.38%) and semiconductors (+0.18%) leading the NASDAQ (+0.22%) slightly higher, however the Dow Jones (-0.15%) also struggled. Europe saw a much stronger performance though as much of the US decline came after Europe had closed. The STOXX 600 gained +1.00% to erase most of Monday’s losses, with almost every sector in the index ending the day in positive territory. With risk sentiment improving for much of the day yesterday, US Treasuries sold off slightly and by the close of trade yields on 10yr Treasuries were up +1.2bps to 1.3226%, thanks to a +1.8bps increase in real yields. However, sovereign bonds in Europe told a different story as yields on 10yr bunds (-0.3bps), OATs (-0.3bps) and BTPs (-1.9bps) moved lower. Other safe havens including gold (+0.59%) and silver (+1.02%) also benefited, but this wasn’t reflected across commodities more broadly, with Bloomberg’s Commodity Spot Index (-0.30%) losing ground for a 4th consecutive session. Democratic Party leaders plan to vote on the Senate-approved $500bn bipartisan infrastructure bill next Monday, even with no resolution to the $3.5tr budget reconciliation measure that encompasses the remainder of the Biden Administration’s economic agenda. Democrats continue to work on the reconciliation measure but have turned their attention to the debt ceiling and government funding bills.Congress has fewer than two weeks before the current budget expires – on Oct 1 – to fund the government and raise the debt ceiling. Republicans yesterday noted that the Democrats could raise the ceiling on their own through the reconciliation process, with many saying that they would not be offering their support to any funding bill. Democrats continue to push for a bipartisan bill to raise the debt ceiling, pointing to their votes during the Trump administration. If Democrats are forced to tie the debt ceiling and funding bills to budget reconciliation, it could limit how much of the $3.5 trillion bill survives the last minute negotiations between progressives and moderates. More to come over the next 10 days. Staying on the US, there was an important announcement in President Biden’s speech at the UN General Assembly, as he said that he would work with Congress to double US funding to poorer nations to deal with climate change. That comes as UK Prime Minister Johnson (with the UK hosting the COP26 summit in less than 6 weeks’ time) has been lobbying other world leaders to find the $100bn per year that developed economies pledged by 2020 to support developing countries as they reduce their emissions and deal with climate change. In Germany, there are just 4 days to go now until the federal election, and a Forsa poll out yesterday showed a slight narrowing in the race, with the centre-left SPD remaining on 25%, but the CDU/CSU gained a point on last week to 22%, which puts them within the +/- 2.5 point margin of error. That narrowing has been seen in Politico’s Poll of Polls as well, with the race having tightened from a 5-point SPD lead over the CDU/CSU last week to a 3-point one now. Turning to the pandemic, Johnson & Johnson reported that their booster shot given 8 weeks after the first offered 100% protection against severe disease, 94% protection against symptomatic Covid in the US, and 75% against symptomatic Covid globally. Speaking of boosters, Bloomberg reported that the FDA was expected to decide as soon as today on a recommendation for Pfizer’s booster vaccine. That follows an FDA advisory panel rejecting a booster for all adults last Friday, restricting the recommendation to those over-65 and other high-risk categories. Staying with the US and vaccines, President Biden announced that the US was ordering 500mn doses of the Pfizer vaccine to be exported to the rest of the world. On the data front, there were some strong US housing releases for August, with housing starts up by an annualised 1.615m (vs. 1.55m expected), and building permits up by 1.728m (vs. 1.6m expected). Separately, the OECD released their Interim Economic Outlook, which saw them upgrade their inflation expectations for the G20 this year to +3.7% (up +0.2ppts from May) and for 2022 to +3.9% (up +0.5ppts from May). Their global growth forecast saw little change at +5.7% in 2021 (down a tenth) and +4.5% for 2022 (up a tenth). To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Tyler Durden Wed, 09/22/2021 - 08:05.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

Driving the 2022 Nissan Leaf, the cheapest EV you can buy in the US

The 2022 Nissan Leaf doesn't get as much range as some of its rivals, but its $27,400 starting price can't be beat. The 2022 Nissan Leaf SL Plus. Tim Levin/Insider I drove the 2022 Nissan Leaf, the cheapest EV you can buy in the US. The latest Leaf starts at $27,400. The one I drove came out to a bit over $39,000. The 2022 Leaf is accessible, practical, and nice to drive, but other EVs have more range. When Nissan first launched the Leaf hatchback in late 2010, electric cars weren't really a thing. Tesla had been selling its first model, the Roadster, for a couple of years. But it didn't sell very many of them, and they were for rich people. If you were one of the few buyers who wanted a practical, economical, fully-electric ride in those early days, the Leaf was your best bet. More than a decade later, the electric-vehicle landscape couldn't be more different.Tesla is the most valuable car company on Earth. The Hummer nameplate, which shut down mere months before the Leaf arrived, is being reborn under GMC with electric motors in place of a roaring engine. More battery-powered SUVs and pickups are on the horizon than I care to count. Through all that change, the Leaf is still kicking. Moreover, a recent price cut to $27,400 makes the 2022 Leaf the lowest-priced EV you can buy new in the US. That drops to just under $20,000 if you redeem the full federal tax credit for plug-in purchases.But can one of the OG EVs still deliver value in 2021, even at a budget price point? A week with the 2022 Leaf told me the answer is: definitely, so long as you can look past the hatchback's so-so range in certain trims, less common fast-charging plug, and analog interior relative to some of its newer rivals. A solid EV at a bargain base priceAlthough I did test the cheapest EV you can buy in the US, the 2022 Leaf, I, unfortunately, didn't get to drive the cheapest version of the Leaf. Nissan would only loan out an upper-trim SL Plus model, which came out to $39,255, destination fees included. Still, the core of what the Leaf offers is shared across the lineup. The 2022 Nissan Leaf SL Plus. Tim Levin/Insider The 2022 Leaf comes in five trims and offers two battery sizes. The key difference between normal and Plus models is that the latter come with the bigger battery pack, which translates to more power and longer range. Here's how the trims break down by retail price and EPA range:Leaf S ($27,400): 149 miles Leaf SV ($28,800): 149 miles Leaf S Plus ($32,400): 226 miles Leaf SV Plus ($35,400): 215 milesLeaf SL Plus ($37,400): 215 miles What stands out: EV practicality that won't break the bankThe Leaf I tested was perfectly pleasant to drive and delivered lots of the pros you'd expect from any EV. Without a rumbly gas engine up front, the Leaf was quiet. Although it didn't deliver nearly the kind of lose-your-lunch acceleration you get in some higher-priced EVs, the Leaf was noticeably agile from a stop. Darting through city traffic or making short-notice highway merges was no problem, and the Leaf smoothly and eagerly got up to speed, which you can't say of every gas-powered economy car. The 2022 Nissan Leaf SL Plus. Tim Levin/Insider Like most EVs, the Leaf offers one-pedal driving, which makes driving incrementally more convenient while boosting range. Switch on the e-Pedal function, and the Leaf doesn't coast when you take your foot off of the accelerator. Instead, the motor starts slowing down to a stop while feeding that captured braking energy back into the battery pack. Once you master the timing, you practically never need to touch the brake. Another plus: A bunch of advanced safety features come as standard. That includes blind-spot monitoring, lane-keep assist, and reverse automatic braking, but excludes ProPilot Assist, which steers for you on the highway and uses radar to match the speed of the car ahead. The 2022 Nissan Leaf SL Plus. Tim Levin/Insider Some may call the Leaf's shape and look dorky compared with the swarm of high-riding little SUVs zooming about these days. But I ask you: Is a roomy, practical interior "dorky"? Are comfortable back seats with ample leg and headroom … "dorky"? How about a cavernous rear cargo area with the seats folded down? If that's "dorky," then maybe I don't want to be cool. What falls short: Range and charging, but not by muchIn a job interview or college application, it's cliché (and a terrible idea) to rattle off "weaknesses" like "caring too much" and "working too hard." But in the case of the Nissan Leaf, what some call flaws, others may see as legitimate selling points. Step inside the 2022 Leaf and you won't find a minimal interior and a giant, iPad-style touchscreen like you'd see in the latest EVs from Volkswagen, Ford, or Tesla. Instead, there's a modest, eight-inch display and buttons. Lots of them. There are buttons for the climate control. A button that turns on one-pedal driving. Switches for the heated seats. The 2022 Nissan Leaf SL Plus. Tim Levin/Insider This could repel EV shoppers looking to live on the bleeding edge. But for anyone put off by the screen-ification of new cars, the Leaf could be a breath of fresh air. Inside and out, the Leaf feels less like some futuristic piece of technology and more like an approachable, familiar vehicle with the small quirk of running on electricity instead of gas. Range - or the lack of it - could be a real drawback for some. The base Leaf gets 149 miles on a charge, which isn't much in today's market, but it's also tough to complain about given the hatchback's low price. Only one person can decide whether 149 miles works for you.Looking at the Leaf's top trims, though, range feels like it's lacking for the price. For just a bit more than the price of the SL Plus I tested, you could buy a Tesla Model 3 or Volkswagen ID.4, both of which offer at least 250 miles of driving on a full battery. For a bit less, you can get a Hyundai Kona EV with 258 miles of range. The 2022 Nissan Leaf SL Plus. Tim Levin/Insider The mid-range S Plus, which promises a healthy 226 miles of range and only costs $5,000 more than the base model, feels like the best deal here.Another knock to the Leaf: It uses a CHAdeMO port for fast-charging, an aging standard of charger that's harder to come by in the US than newer CCS plugs. The Leaf is also equipped with a more common J1772 port, but that's only good for slower charging. Fast-charging is the only way to add substantial amounts of range in minutes, rather than hours. This all may not matter much if you plan to juice up at home, but it could pose a problem if you rely on public chargers.Our impressions: Bring on the good, cheap EVsThe Nissan Leaf may be the cheapest new EV for sale in America, but you need to pay up for some of the things I experienced during testing: extended range, extra interior conveniences, features like adaptive cruise control, and more. But the core of what the Leaf offers - a pleasant driving experience, conscience-cleansing electric power, and hatchback utility - all can be had on the cheapest model. Even after spending on the larger battery pack, the Leaf only retails for $32,400. That's all pretty remarkable in a world where sub-$35,000 EVs are in short supply. Alongside the Leaf S, the only other EV you can buy new for less than $30,000 is the Mini Electric, which only has 110 miles of range and isn't really practical for a school run or Costco haul. Amid all the flashy new startups and pricey flagship EVs, it's nice to see that someone out there is dropping prices and making solid, accessible EVs for the masses.Read the original article on Business Insider.....»»

Category: smallbizSource: nyt22 hr. 35 min. ago

Here"s The Truth Behind Biden"s 24/7 Port Operations Pledge

Here's The Truth Behind Biden's 24/7 Port Operations Pledge Written by Lori Ann LaRocco, author of: “Trade War: Containers Don’t Lie, Navigating the Bluster” (Marine Money Inc., 2019) “Dynasties of the Sea: The Untold Stories of the Postwar Shipping Pioneers” (Marine Money Inc., 2018). First published on FreightWaves When you tear away the frills of President Biden’s supply chain announcement, it is essentially a political pawn to push the infrastructure bill. The ugly truth is the congestion will not be alleviated anytime soon and it will definitely not be any better in the next 90 days. Why?  It’s common sense and math.  You can’t blame private-sector companies for this plan’s future letdown. Trade takes people and coordination among all the players within the supply chain. The ports and all of the stakeholders within these ports must be on the same page when it comes to a 24/7 operation. The holes in this announcement are numerous. First, 3,500 additional containers moved in a week is 200 containers a day. During the month of August, the San Pedro Bay ports moved 1,241,896 TEUs. This projection of 3,500 does not move the needle at all. That’s a mere 14,000 containers — which translates into just 1% of the total TEUs. This plan is being called a “sprint.” Biden’s announcement of 24/7 ports is not accurate. Only one terminal out of the 12 in San Pedro is operating 24 hours a day — Total Terminals International (TTI) at the Port of Long Beach — and that every-second schedule is only Monday through Thursday, making it a 24/4 situation, not 24/7. A Port of Long Beach official said discussions were taking place with other terminals. But as of now, no other terminals have signed on. In the pursuit of 24/7, you need all the players to make this successful. The 24/7 operation at the Port of Los Angeles is not even happening. When asked if the port was going 24/7 on Thursday, the day after this announcement, the port press office answered in an email: “No(t) one marine terminal will go 24/7 tomorrow. This [is] a process to work the details of expanded hours leading to around-the-clock work in the private sector. It will take all private- and public-sector partners to operationalize this. There are no fast levers, but we have more cargo than ever and need to move it safely and securely. Gene [Seroka, executive director] will be meeting with industry associates tomorrow on this. No ETA as of today.” So the ports as of right now are status quo as it relates to expanded operations. The reason for this lack of 24/7 is because every facet of the supply chain must be participating in an equal fashion. Truckers are not going to work 24/7 if they can’t pick up containers at a warehouse that is closed. The flow of trade moves when everyone in that flow is working. The question is what can be done to change the behaviors of those in the supply chain to go to 24/7? This frustration can be read in a press release from the Harbor Trucking Association, which said the Biden administration’s plan did not address the core issues that have been plaguing the supply chain. The release stated, “While steamship lines and their marine terminal partners have been pointing the finger at the trucking industry for not utilizing appointments during this crisis, the underlying causes have continued to compound unchecked. Challenges faced by truckers doing business at the ports stem from productivity and efficiency issues that are not alleviated by merely shifting to 24/7 gate operations.” The HTA said thousands of empty containers currently are sitting in motor carrier yards on top of the chassis, preventing those chassis from moving an import container off the dock. “So those appointments go unused. … This is not an issue of unwillingness to pick up cargo, the entire supply chain wants this cargo moved. It is instead a tangled web of shifting constraints that impede and discourage participation,” the statement read. Also in this plan FedEx, UPS and Walmart were mentioned in stepping up in helping alleviate the supply chain.  When asked for specifics, FedEx global media relations responded: “FedEx Logistics President and CEO Dr. Udo Lange appreciated the opportunity to join other business leaders and the administration to share our expertise and discuss supply chain issues, but we have no other details to share at this time.” Walmart spokesperson Ashley Nolan said: “We’ll increase throughput by as much as 50% during the nighttime hours being added at the port.” At the time of publication, UPS did not respond to comment. In the sea of faces of those attending this press event, a critical piece of the supply chain was missing — the ocean carriers and the port terminals.  When Transportation Secretary Pete Buttigieg’s office was asked why there was no participation, the response was vague: “The administration has and will continue to have a regular dialogue with ocean carriers and terminal operators.”  And yet, at least one of those carriers has not been contacted — Hapag-Lloyd, one of the largest ocean shipping lines in the world. “We have not been approached,” confirmed a company spokesperson. “Ships are already operating 24/7 whenever possible. The challenge is to get containers off the terminal by truck and rail because the warehouses will not/cannot take deliveries on weekends. It is a lot about shippers’ inability to take delivery of their goods and infrastructure bottlenecks in the U.S.” The carriers and the terminal operators are key pieces to this puzzle. The terminals are the key segment of the supply chain that not only schedules the truck container pickups and drop-offs, they also request the  labor to unload the vessels. So if this is a 90-day sprint, the U.S. supply chain needs more muscle and a massive shot of adrenaline. Tyler Durden Fri, 10/15/2021 - 19:10.....»»

Category: dealsSource: nytOct 15th, 2021

Toymaker Slams Biden: "Too Little Too Late" To Save Christmas

Toymaker Slams Biden: "Too Little Too Late" To Save Christmas A top toy executive joined Fox News' "America's Newsroom" Thursday and warned President Biden's port directive this week to operate 24/7 to alleviate snarled supply chains is "too little, too late" to save Christmas.   MGA Entertainment CEO Isaac Larian said, "whether the ports are open 24 hours a day or 48 hours a day, you cannot get labor. If you cannot get labor, you cannot get trucks, you cannot get the merchandise out." "I think this directive is too little, too late. And frankly, it's a political gimmick to me," Larian said.  At the Ports of Los Angeles and Long Beach, a point of entry for 40% of all US containerized goods, more than 80 container ships are at anchor and 64 at berths across the twin ports. The backlog doesn't stop there as it takes well more than a week for entry into the port. Once the containers are unloaded, it takes another week to leave the port to warehouses.  Larian blames port congestion on labor shortages due to Biden's unemployment policies that incentivized people to stay home and collect stimulus checks than work.   "If you're paying people to stay home and they make more money just staying home than working, they don't want to come to work," he said. Larian's company sells children's toys. One of his toys, called "LOL Surprise Movie Magic," will only be able to get 60% of product demand out to retailers and e-commerce warehouses due to supply shortages.  "A lot of kids are not going to be able to get their LOL Movie Magic surprise under the Christmas tree or Hanukkah tree this year," he said. With 71 days until Christmas, supply chain woes worsen, especially in southern China, where multiple typhoons have closed ports and created even more significant backlogs. Global port congestion has brought uncertainty that other consumer goods won't arrive in time for the upcoming holiday season.   Here's part of Larian's interview:  Biden's port directive should've been implemented months ago, ahead of the fall restocking period.  Tyler Durden Fri, 10/15/2021 - 13:07.....»»

Category: blogSource: zerohedgeOct 15th, 2021

Uber Freight boss says "we"re living in shipping Armageddon," and it"s going to take the entire industry to fix it

"We're ordering more and more packages ... but the supply chain is completely imbalanced," Uber Freight chief Lior Ron told CNBC Containers stacked up at the Port of Los Angeles. AP Photo/Jae C. Hong Uber Freight chief Lior Ron told CNBC that we've reached "shipping Armageddon." Ron said it would require the entire industry to fix the crisis - there's no one single cure, he said. Better wages may help to attract truckers turned off by the long-haul driving lifestyle, he said. Uber's logistics boss says the "entire industry" must pull together if it wants to fix the shipping crisis.In an interview with CNBC's Jim Cramer, Uber Freight chief Lior Ron said that we've reached "shipping Armageddon." The company was using its own technology to help tackle the problem, but only a sector-wide solution would work, he said."It really requires the entire industry because we are facing just unprecedented times," he said. "We're ordering more and more packages that we love to consume to our doorstep, but the supply chain is completely imbalanced ... the entire network is different."Uber Freight, Uber's logistics arm, launched in 2017. In the same way as its core ride-hailing product works, Uber Freight acts as a middleman, providing an app to connect independent truck drivers with shippers that have cargo. Ron said that there were more than 1 million truck drivers using the app. The global supply chain network is on its knees. After a fall in shipping demand during the early days of the pandemic in 2020, a surge at the end of that year led to delays, port traffic jams, and blockages across the supply chain. Now, containers are getting jammed up in ports because of both rising demand and a continuing shortage of dockworkers and truckers to unload them and take them to their destination.Earlier this week, the White House stepped in, announcing plans to shift the clogged-up Port of Los Angeles to a 24-hours-a-day, seven-days-a-week schedule to help ease traffic. Retailers Walmart, Target, and Home Depot also announced extra working hours to shift their own stock from containers and help de-jam cluttered ports.When asked whether better wages was the solution to the trucking problem, Ron said that it was an important element, but wouldn't resolve the problem on its own. Long-haul trucking has become less appealing to drivers, especially in the wake of the pandemic, he said. "It's harder for them to be on the road and there is a better alternative in driving closer to home and doing last-mile delivery. We ask them to do more and more and maybe they don't want to even have to go on the road because they have to be stuck in facilities or have health concerns," he said.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 15th, 2021

Global Ship Backlog Just Got Even Worse As New Supply Chain Nemesis Emerges

Global Ship Backlog Just Got Even Worse As New Supply Chain Nemesis Emerges As if relentless, fiscally-stimulated global demand for (made in China) products, coupled with soaring input prices, Covid-crippled indutries, production-throttling energy crises and containership parking lots off major ports wasn't enough to cripple global supply chains, we can throw in one more factor that will make "just in time" deliveries a thing of the pre-Biden past and will ensure that nobody gets their presents this Christmas. The weather. A tropical storm that’s lashing southern China is causing a ship backlog from Shenzhen to Singapore, Bloomberg reports as it warn of even emptier store shelves come Christmas. Shipping data compiled by Bloomberg show there are currently 67 container ships anchored off Hong Kong and Shenzhen, 22% more congested than median daily counts from April through Oct. 14. Another 61 remain anchored off China's massive Ningbo port in Shanghai. Container ship positions as of Oct. 14 heatmapped in yellow. For once there is no "unintended consequence" behind this pile up - it's the result of Typhoon Kompasu freezing transit lanes, closing schools in Hong Kong and canceling stock market trading in the financial hub on Wednesday. It also sparked the latest containership domino-effect at the worst possible time, with 37 ships now waiting off Singapore, 18% more congested than normal. And with Singapore one of the most efficient ports in the world and a key hub for containers to be moved from one vessel to another while in transit, any disruption in the city-state is bound to have far-reaching ramifications. The incremental delays will make an already fragile supply chain, that much more unstable: according to the Busan Port Authority in South Korea, vessels are having to wait about three days to berth and that’s causing so-called transshipment cargo to pile up. Meanwhile, almost 40 ships are anchored off Los Angeles, 4.5% more congested than usual, while 11 are cooling their heels off the coast of Malaysia at Tanjung Pelepas, creating a congestion rate about 25% above the median. For Vietnam’s dual hub of Ho Chi Minh City and Vung Tau, things are even worse, with current congestion 38% higher than the median. Operators are scrambling to find a solution to this chaos which seems to get worse with every passing day: “shipping companies and other stakeholders are trying to resolve the backlog because there are real concerns that many year-end holiday goods will never reach consumers in time,” said Um Kyung-a, an analyst at Shinyoung Securities in Seoul. “This month will be the most challenging period but hopefully things will start to ease from the fourth quarter.” This is a "hopeful" line we have heard every month since May. It has yet to come true. Located at the gateway - both literal and metaphorical - of global Transpacific supply chains, accessible port terminals are an indispensable anchor to any hopes of normalizing supply chains. Alas, congestion at container terminals around the world has added pressure to already stretched supply chains. Covid-19 cases at ports, along with shortages of shipping containers and labor have aggravated the problem as exporters try to send goods to the U.S. and Europe before the end of the year. According to Singapore Logistics Association chairman Dave Ng, vessels are waiting one to three days to berth at most major ports in Southeast Asia, including Singapore, The wait is more than three days at major ports in Northeast Asia and could extend to over a week in other parts of the world. And any incremental delays only cascade exponentially, adding more days to an already broken system. “Global port congestion has introduced more uncertainty into planning and booking of sea shipments,” Ng told Bloomberg. “Ocean freight costs have increased five to six times from the levels pre-Covid and this has translated into higher operating costs for logistics companies.” Logistics companies have been working to improve business productivity by sharing resources and leveraging technology, Ng said. But they still face difficulties in filling jobs, particularly driving and warehousing, which could impact operations in the near term, he said. Meanwhile, Bloomberg reported this week that shipping giant Maersk said earlier this week that it’s diverting some ships from the U.K.’s largest container port because of congestion tied to a trucker shortage. Many logistics companies are finding it difficult to find drivers to pick up and deliver containers, causing a backlog at the Port of Felixstowe. Port congestion and lack of containers has driven shipping rates to record levels this year. Spot levies to haul a 40-foot container to Los Angeles from Shanghai peaked at $12,424 last month before easing to $11,173 as of Oct. 7, the Drewry World Container Index show. Rates to Rotterdam from Shanghai hit an all-time high of $14,807 last week. Shipping rates dipped modestly in the latest week, but as we explained previously, this was for the worst possible reason namely a sharp drop in China output. Expect a sharp spike in the next few weeks as throttled Chinese production returns. Exporters and shipping companies have been trying to find alternative routes to avoid the backlog. Some cargo from China is now being shipped to Busan and then reloaded on ships bound for Russia’s east coast before being put on trains and sent through to Europe. In an act of sheer desperation, the Biden admin announced on Wednesday that the Port of Los Angeles will begin operating 24 hours a day, seven days a week as part of efforts to break the logjam. However, as Rabobank explained earlier this morning, simply getting containers out of the terminal at LA achieves very little if you don’t the solve chassis crisis; if the containers sit there waiting for trucks; or for truckers; or for rail. All you do is move the logjam from sea to shore - and that can potentially make matters worse. The Transportation Secretary running this task force is a vocal opponent of the ‘so build a bigger road’ mentality that ends up with bigger roads and the same traffic logjam. Tyler Durden Thu, 10/14/2021 - 23:40.....»»

Category: dealsSource: nytOct 14th, 2021

Amazon is reportedly shopping for used cargo jets that can fly from China, an effort that would help the company side-step major port delays

The massive jets could fly goods directly from Asia to the US - evading port delays that could tack on weeks to a delivery date. Amazon Amazon wants to buy used long-range cargo planes that could haul goods from Asia to the US, Bloomberg reports. Sources close to the issue told Bloomberg the retailer wants to buy over 10 of Boeing and Airbus's largest converted passenger jets. Amazon is one of many major retailers looking to avoid weeks of delays at Southern California ports. Amazon is looking to buy used cargo planes that would be able to travel long distances, according to a report from Bloomberg on Wednesday.The company is shopping for 10 refurbished Airbus's A330-300 aircraft and an unspecified number of used Boeing 777-300ER cargo planes, sources familiar with the issue told the publication. The company is also looking to fill crew positions for the planes. The planes represent some of the largest cargo versions of twin-engine passenger jets in the world, Bloomberg points out.The move would be a major step in allowing the e-commerce giant to move goods from Asia to the US on its own and it would help the company avoid supply-chain bottlenecks at key US ports. The aircraft would be able to fly goods directly from China to the US, within a few hours' drive of their final destinations - evading port delays that could tack on over a month to the goods' delivery date, as well as backlogs at warehouses and railroads.It is unclear whether Amazon will buy or lease the long-range cargo planes. It is also unknown where the planes will be bought or when they plan to begin using the cargo planes. But, it could be a major step to simplifying supply-chain issues for the retailer and could help them avoid future hurdles. Experts predict supply-chain bottlenecks will continue well into 2023.A spokesperson for Amazon did not immediately comment on the report.In January, Amazon expanded its transportation fleet by purchasing 11 Boeing 767 airliners to use as cargo planes. Amazon plans to use a refurbished version of Boeing's 777 plane next year, Bloomberg reported. The passenger plane-turned-cargo plane will hold about 25% more goods than existing air freighters, the publication said. Amazon If the converted jets are obtained, Amazon will be one of many major retailers to take extra precautions to side-step supply-chain constraints. Earlier this month, Coca-Cola announced it was chartering bulk-shipping vessels that are usually reserved for hauling raw materials like coal, iron, and grain. The month before, Target and Costco also revealed that they had begun chartering container ships in an effort to side-step the shipping delays.Other companies, including Home Depot, Lululemon, and Peloton, have begun relying more heavily on air freight as well. Though, air shipments are significantly more expensive than transporting goods by sea. A $195 ocean shipment can cost $1,000 by air, according to Freightos. Companies' movements toward air cargo can also cause backups at airports. Amazon Air was first launched over five years ago. Since, it has grown to encompass about 75 planes which operate primarily in North America and Europe. Amazon's further expansion into air freight will also help it compete with the UPS and FedEx.Read Bloomberg's full report here.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 13th, 2021

Psaki says the Biden administration can"t "guarantee" holiday packages will arrive on time because it"s "not the Postal Service"

Biden is working to address the pandemic-related global supply chain backlog, which has resulted in product shortages and higher prices. White House Press Secretary Jen Psaki speaks during the daily briefing at the White House on October 13, 2021. NICHOLAS KAMM/AFP via Getty Images Jen Psaki said the administration can't "guarantee" holiday mail will arrive on time this year. She said the administration "is not the Postal Service," despite the fact that USPS is a government agency. Biden is moving to address the pandemic-related global supply chain backlog, which has inflated prices. White House press secretary Jen Psaki said on Wednesday that the Biden administration can't "guarantee" that holiday mail will arrive on time this year due to coronavirus-related supply chain issues. Psaki insisted that the administration doesn't have full control over the United States Postal Service, despite the fact that USPS is a federal government agency."We are not the Postal Service or UPS or FedEx. We cannot guarantee. What we can do is use every lever at the federal government's disposal to reduce delays, to ensure that we are addressing bottlenecks in the system," she said. Psaki said the administration will urge ports to operate with longer hours to speed up shipping and would "continue to press" workers, unions, and companies to "take as many steps as they can to reduce these delays."A spike in demand for goods, COVID-19 restrictions, and worker shortages are among the reasons for the shipping delays. President Joe Biden is moving to address the pandemic-related global supply chain backlog, which has resulted in good shortages and higher prices. Earlier on Wednesday, Biden met with senior administration officials and industry leaders to discuss how to tackle the problem ahead of the holiday season. In a speech, he announced several steps to mitigate the crisis, including that the Port of Los Angeles will begin operating 24/7, seven days a week to help reduce the backlog, joining the Port of Long Beach, which expanded its operations last month. Those two California ports are "on track to reach new highs in container traffic this year," according to the White House.Biden also touted his domestic agenda, saying that passing an infrastructure bill would help address supply chain issues."In order to be globally competitive, we need to improve our capacity to make things here in America, while also moving finished products across the country and around the world. We need to think big and bold. That's why I'm pushing for a once in a generation investment in our infrastructure and our people," he said.Biden's legislative priorities have stalled in Congress as lawmakers continue to hammer out two massive separate bills, one targeting infrastructure and the other targeting social policy and climate.-ABC News Politics (@ABCPolitics) October 13, 2021Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 13th, 2021

Companies are mentioning the words "supply chain" more than ever before during earnings calls

Issues like labor shortages and port congestions are contributing to delays and disruptions retail companies face ahead of the 2021 holiday season. Companies have relied on lean supply chains until the pandemic disrupted things. Justin Sullivan/Getty Images The term "supply chain" has been reference about 3,000 in investors' earning calls this year. A supply chain crisis is expected to slow down retail operations, especially during the holidays. President Biden met with retailers to tackle alleviating supply chain pressures across the country. Companies from Apple to Costco are echoing the same words in their third-quarter earnings calls, which could foreshadow major delays in the retail industry in the coming months.S&P 500 executives have mentioned "supply chain" and related terms almost 3,000 times on company investor calls as of Tuesday, Bloomberg reported, surpassing last year's tally of about 2,000 mentions."Supply chain is taking center stage on earnings calls as the supply chain is a disaster," Scott Mushkin, an analyst at R5 Capital, told Bloomberg. "Honestly, there is a chance the system breaks down during the holidays."Supply chain disruptions caused by COVID-19 continue to strain retail schedules, especially as the markets head into the holiday season. Big retailers like Walmart, Ikea, and Home Depot have resorted to chartering their own bulk shipping vessels to sidestep shipping delays, while companies like Amazon and Lululemon invested more on their air freight delivery operations.Meanwhile, executives are telling their customers to brace for continued shortages and imminent price hikes. McCormick & Co. CEO Lawrence Kurzius cited "additional pressure on our supply chain due to strained transportation capacity and labor shortages and distribution" in an earnings call in September, which "negatively impact sales." Pepsi CEO Ramon Laguarta said in an earnings call that the company pulled back some perimeter inventory in the summer "voluntarily" because of "supply chain constraints."However, companies can also use global supply chain issues as reasons to explain poor quarterly performances, some market experts say, using the term as a PR cushion to soften the impact of a company's pandemic-era performance."Any company missing earnings can and will now freely employ the supply chain excuse," lead market strategist and founder of NorthmanTrader Sven Henrich said in a tweet.President Biden met Wednesday with officials from the Port of Los Angeles, which is facing a large onslaught of incoming cargo vessels stuck at port, to expand hours of operation to off-peak and night hours and hopefully lessen the stress of supply chain woes. But the discussions about the effects of supply chain problems isn't going away."Holiday goods are waiting at the ports," Stephanie Wissink, an analyst at Jefferies who covers retailers and consumer-product companies, told Bloomberg. "For retailers and brands alike, it's a race against the clock."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 13th, 2021