Iphone Disruption
Floating Quarantines
China is effectively shut down and goods are now stranded in floating quarantines.
Nearby countries like Japan and South Korea are hit hardest but Global Shipping Disruptions will spread fast.
About 80% of world goods trade by volume is carried by sea and China is home to seven of the world’s 10 busiest container ports, according to the United Nations Conference on Trade and Development. Nearby Singapore and South Korea each have a mega port too.
“A closure of the world’s manufacturing hub impacts container shipping at large, as it is a vital facilitator of the intra-Asian and global supply chains,” said Peter Sand, chief shipping analyst at BIMCO, an international shipping association. “This will affect many industries and limit demand for containerized goods transport,” Sand told CNN Business.
The shutdowns mean that some ships can’t get into Chinese ports, as the loading and discharging of goods slows, said Guy Platten, secretary general of the International Chamber of Shipping, a trade body. Others are stuck in dock, waiting for workers to return to ports so that construction and repairs can be completed, Platten added.
Still more vessels are idling in “floating quarantined zones,” as countries such as Australia and Singapore refuse to allow ships that have called at Chinese ports to enter their own until the crew has been declared virus-free, added Sand. Platten said he knew of at least one crew that is running low on food because their ship has been idled for so long.
Giant shipping companies such as Maersk, MSC Mediterranean Shipping, Hapag-Lloyd and CMA-CGM have said that they have reduced the number of vessels on routes connecting China and Hong Kong with India, Canada, the United States and West Africa.
Not Just Shipping
IAG Cargo, the air cargo arm of British Airways parent IAG, on Monday canceled all services to and from mainland China for at least the remainder of the month, citing a UK government travel advisory, according to a statement on its website.
German logistics group DHL has reported “severe disruptions to inbound and outbound air cargo shipments, trucking and rail cargo services.”
Shipping Down 20% in China Ports
The Wall Street Journal reports Coronavirus Hits Shipping as China Port Traffic Slides
“The full impact of the Chinese coronavirus outbreak on container volumes will not be fully measurable until ports announce their throughput numbers for the first quarter, but data collected on weekly container vessel calls at key Chinese ports already shows a reduction of over 20% since 20 January,” Paris-based Alphaliner said in the report, released late Tuesday.
“As far as box volumes in China, we see a fall of around 23% over the past three weeks as the country is gradually shutting down,” said Wang Lei, a broker in Shanghai, the main gateway for Chinese exports and the world’s busiest seaport with some 42 million containers a year.
“Workers from crane operators to customs officials and truck drivers are staying home,” Mr. Lei said. “It’s always slower during the Lunar New Year holidays, but this is something else. People are afraid to interact and it’s killing business.”
Supply Chain Disruption to Japan and South Korea
Germany Coming Up
Hyundai
Nothing Moving
Volkswagen Postpones Restart of China Joint Venture Production
https://twitter.com/next_china/status/1226201101512429568
Tourist Ship Quarantines
Permanent Relocation?
Hong Kong Prepares to Quarantine China
https://twitter.com/DrEricDing/status/1225655700161826816
Baltic Capsize Index is Negative
Index tracking freight rates for world’s largest cargo ships plunges deep into negative territory as coronavirus slows global trade.
The Baltic Exchange’s capesize index, which constitutes part of the Baltic Dry Index—an important proxy for the world’s shipping market—extended deeper into negative territory Monday, after slipping below zero for the first time ever on Friday.
Capesize vessels move products such as iron ore and coal from mines in Latin America and Australia to Europe and China. The index tracking them plunged from minus 21 points to an all-time low of minus 102 on Monday, a Baltic Exchange spokesperson said.
The broader Baltic Dry Index, which tracks global shipping rates, fell to 466 on Monday, its lowest level in four years.
If the rate is negative, someone is paying you to take the ship.
Amazon Cancels Attending Conference
Supply chain disruptions are starting to hurt big time.
The airlines, carmakers, and phone makers are already in trouble, especially Hyundai and Apple.
Shipping disruptions to the US will hit the West coast ports no later than March.
But hey, let’s pretend this is no worse than an average flu.
Mike “Mish” Shedlock
Ocean Shipping Service is a means of shipping by sea, between two countries or from one country to another. The companies using this service do not necessarily have to be located at sea ports but can have their principal office in one or the other place.
Here comes a recession:
Newsflash: Nuclear Terrorism flattens City of London and Downtown Manhattan. Dow explodes +600 in overnight futures activity.
I’m pretty certain the “just the flu” thing started as people telling non-Chinese to worry about the flu more since the Coranavirus was mainly in China but was misconstrued to this. That’s what I think at least
Trump’s proposal to bring manufacturing back to the US doesnt look so silly when you think about controlling your own supply chains.
And people thought the trade war would cause a recession. nCoV is the black swan for the global economy.
Hey all, daily lurker here.
I’m on a personal crusade to try and get people to start calling this the:
Wuhan Flu.
In the past these super flu’s use to be named after their point or origin (Remember the Beijing Flu before china was globally significant?). It’s more catchy too.
I think China deserves recognition for this Predictable and Preventable baby they created. This new trend of giving technolabels to these virii makes it easy to forget they are man made creations brought on by poor hygiene and farming practices that should be outlawed for the global death and suffering they cause.
Any thoughts on getting some momentum on this Mish et al?
Not going to happen. (1) It is not a Flu virus. (2) Naming it after the geographical location where the first major outbreak occurred is discouraged under W.H.O. best practices, due incorrect stereotypes that occurred with other diseases which did follow that convention. It is more likely this will be called something like “SARS-B.” From the W.H.O. website:
“…a disease name should consist of generic descriptive terms, based on the symptoms that the disease causes (e.g. respiratory disease, neurologic syndrome, watery diarrhoea) and more specific descriptive terms when robust information is available on how the disease manifests, who it affects, its severity or seasonality (e.g. progressive, juvenile, severe, winter). If the pathogen that causes the disease is known, it should be part of the disease name (e.g. coronavirus, influenza virus, salmonella).
Terms that should be avoided in disease names include geographic locations (e.g. Middle East Respiratory Syndrome, Spanish Flu, Rift Valley fever), people’s names (e.g. Creutzfeldt-Jakob disease, Chagas disease), species of animal or food (e.g. swine flu, bird flu, monkey pox), cultural, population, industry or occupational references (e.g. legionnaires), and terms that incite undue fear (e.g. unknown, fatal, epidemic).”
Whatever their names, thank goodness we have them ! The planet would ve been totally destroyed and social liabilities even more unsustainable by now if we didn t…..
Call it nCoV-W.
It’s already starting to be labeled as “novel coronavirus pneumonia” so…
ya, that sucks. and nobody outside of media says that.
Well at least I do see people calling it the Wuhan Coronavirus, which doesn’t flow, but it get’s the point.
The Great Central Banking swindle is about to be exposed. Yes, you can stimulate demand through ‘accomodative monetary policy’ and interest rate suppression but Central Bankers cannot create production. People can get a bank loan or have a bag full of cash but nothing to buy except, maybe, a stay in hospital.
Prediction: 3 months from now, we’ll all be talking about how bad the economic indicators are while the stock market is hitting new highs.
Maybe. Not if there are forced sellers though.
The iPhone is 2.65% of the NASDAQ. That one item is 2.65% of a major US Index. Take about eggs in one basket.
And Mish this is just the beginning. There are probably very few items in your house that don’t have part or completely made in China.
Literally everything.
And we won’t even begin to talk about things needed to maintain our infrastructure. Pipe fitting, transformers, wire, ac compressors. The list is endless.
The US will learn about offshoring very quickly.
Seems like Trumps wet dream.
This is a test. It is only a test. If this was a real attack turn to 1984 for further instructons.
Offtopic but how do you sell 500k iphones per day continually? Puts into perspective how many people there are and how th
Good thing I got other income than my mfg job. We dont crap from China. We send them crap so i’m not sure how that will go. We’re already hurting from the tariffs.
……..and how this virus could have a field day.
“Offtopic but how do you sell 500k iphones per day continually?”
The first light bulbs lasted 10 times longer than the industry could survive on, so they deliberately manufactured them to fail early. Planned obsolescence. The auto industry used every aspect of planned obsolescence to get where they are today.
1 to 4 solves by itself.
5 as well, as long as that freedom is extended to include starting a phone/internet company, without being unduly restricted in order to protect usury by well connected incumbents by way of excessively wide spectrum “ownership” enforced at the point of a lot of guns by some ruling junta.
Freedom always works. The only thing it sucks at, is facilitating and maintaining usury and crass rent seeking for the well connected, hence in financialized dystopias wealthy, classes.
Which, incidentally, is how virtually every member of those classes, with the share growing every year, got/get to become and remain exactly that.
Now, since government policies and decisions, along with “legal” judgments; just like absolutely all other goods, are perfectly normal economic ones no different from any others; those beneficiaries of simple rent seeking and usury, are in a position to buy more of them than those stuck overpaying for cell phone plans, in order to fund subsidizing overpriced cell phones, in order to fund idle leeches sitting on their rear and “making money” from “their portfolio” which happens to include Apple…. Leading to……..
Not exactly rocket science, to put it that way. But apparently close enough for government work, in the DumbAge.
Fed can implement QE5 and buy the phones
An Apple a day keeps the Doctor away. -:)
Not to be an alarmist but I think its critical to keep in mind 4 weeks ago this wasn’t on anyones radar, now 2/3 of China is shutdown indefinitely and 400 million people are under some form of house arrest/martial law indefinitely. I’ve lost track how many countries have confirmed nCov cases. If you think this isn’t going to get worse your out of your mind.
What do you think we can expect in the next 4 weeks?
The big question!
According to one of the London universities, Wuhan will peak in mid to late February. So I guess it depends if they are right, and whether the metastasis elsewhere can be contained.
Latest estimate is 82% mild symptoms, 15% severe, 3% critical. If true I’m beginning to wonder if the reason for the concern is the R0. You could handle the above if only 5% of the population was going to catch it. But if 18% of your workforce are going to be seriously ill then that it is going to weigh heavy on the indicators.
Particularly when it is males who are hit hardest and they are still the ones doing the essential manual jobs.
A lot of the out of band disruption, is due to “overreaction.”
Not “overreaction” in a bad way, but simply a rational response to extremely high degrees of uncertainty regarding a possibly very bad outcome. Without anyone knowing with any real degree of certainty how outbreak will play out, people end up, in practice, optimizing for worst case scenarios. Which are very likely, though not certainly, not the most likely scenarios. So, the out of band responses we are seeing, are in effect not responses to a virus outbreak, but instead responses to extreme uncertainty about what the future holds. Hence, extreme, to the point of paralysis, caution.
Upside is that reducing uncertainty about the virus, is almost certainly a quicker process than combating the virus itself. Simply more time to observe infection-to-final outcome clinical histories, will start bringing down the former; even if meaningful progress in actually treating the virus itself, takes lots longer.
Oh that’s great news!!!
This is just an “over reaction”, not a rational reaction to a virus outbreak.
Thank you for letting us all know why this is happening, I was really worried for a few weeks there. This is just an “over reaction”.
Come to think of it you’ve been right all along.
I can’t believe I didn’t use common sense. What a long winded jack ass I am.
It’s a rational reaction to the uncertainty surrounding a virus outbreak. Not to a virus outbreak per se.
While that may seem pointlessly pedantic, operationally it is quite significant; since much of the uncertainty surrounding it, is almost certain to give way quicker than the underlying outbreak itself.
How many of those massively overpriced phones contaminated with the (bioweapon) cornhole virus? AH a lot! At least folks got Obamacaid to cove hospices.
Virus won’t survive weeks shipping via sea.
Hey, I get to keep my doctor, right?
LOL, are you experiencing any other symptoms besides hallucination?
Tim “Marley” Cook forged his own supply chains.
Which will drag him to Hell.