2021 has seen the transportation industry grapple with supply chain challenges.
Did you experience a shortage of specific foods at the grocery store or have you waited a long time for that car you ordered over Christmas last year? Well, it’s been a year of spectacular woes across the supply chain, affecting consumers, manufacturers and carriers. Let’s look at the highlights:
Blockade of the Suez Canal
In March, a 400-meter freighter called Ever Given got stuck in the Suez Canal for almost a week due to high winds and poor visibility.
He was responsible for memes like:
Friends, I’m not optimistic about the Suez situation. pic.twitter.com/lOEDMwMMpm
– Josh Marshall (@joshtpm) March 25, 2021
– James Felton (@JimMFelton) March 25, 2021
With over 12% of world trade flowing through the Suez Canal, this has prevented more than 300 ships at both ends of the canal from moving. List of Lloyd’s estimated that the stranding retained about $ 9.6 billion in trade along the canal each day.
This resulted in a ripple effect in the management of the backlog of broken down vessels.
Then there was the challenge of getting ships to port, the delays in getting shipping containers on trucks and trucks to their destinations.
Today the container ship is back afloat, although under strict safety measures and major repair progress.
Colonial pipeline attack
In May we saw the colonial pipeline company temporarily shut down all of its pipeline operations in response to a hack involving ransomware.
Colonial Pipeline is the largest refined products pipeline system in the United States. 5,500 miles of pipeline connects Texas to New York. The company transports 45% of the East Coast’s fuel supplies and serves seven airports.
In response to the attack, DarkSide left this message on its now defunct dark site:
We are apolitical; we do not participate in geopolitics, do not need to bind ourselves to a defined government and seek other motives.
Our goal is to make money and not to create problems for the company.
From today, we introduce moderation and check every business that our partners want to encrypt to avoid social consequences in the future.
As a result, the US government issued a number of emergency actions in response to the attack. Besides the obvious security investigations, they included:
- A one-week targeted waiver, allowing multiple states to temporarily use non-compliant fuel to increase available supply.
- A waiver of “hours of service” to provide greater flexibility for drivers carrying fuel.
- An emergency effort to determine the capacity of rail operators to help transport fuel from inland ports and identify potential actions to enable this effort.
Semiconductor silicon chip shortage
2021 was the year of the semiconductor chip shortage. Its cause is varied but includes:
- Cuts in chip purchases by automakers in response to COVID-19 closures.
- Increased use of semiconductors in PCs and gaming devices.
- A fire at Renesas Semiconductor Manufacturing in Japan, responsible for 1/3 of the semiconductor chips manufactured.
The company typically produces about a third of the world’s car microcontroller chips.
The problem is also indicative of larger supply chain issues and the fragility inherent in oversized supply chains.
Automakers use about 10% of the chips in the semiconductor market. A typical car (the type that kills the Earth) uses between 50 and 150 semiconductors. However, a modern electric vehicle can use up to 3000 tokens. Phew.
Throughout the year, we’ve heard stories of cars and other vehicles parked in factories ready for deploymentâ¦ except for their computers and processors. In response to the shortage, automakers have significantly reduced production, forcing buyers to wait long for promised orders.
This year, BMW, General Motors and Tesla also vehicles shipped without characteristics due to the shortage of semiconductor chips.
Shortage of trucking personnel
We have also seen the supply chain crippled by staff shortages. We only have to look over the pond to the UK to see what happens when there is a shortage of people. After the Brexit vote, a around 20,000 truckers returned to Europe and never returned.
Industry officials say the UK is running out of around 100,000 truck drivers, leading to problems such as supermarket stocks and fuel shortages. The government has finished bring in the army driving tank trucks. It is a use for taxpayers’ moneyâ¦.
As fossil fuels gradually disappear, lithium is a crucial ingredient in the manufacture of lithium-ion batteries for electric vehicles and energy storage systems.
However, extraction and refining take time to meet the demand for lithium-ion batteries.
Additionally, as automakers ramp up their ambitions for electric vehicles, a lot of lithium is needed to meet targets.
According to IHS Markit, in 2000, about 9% of the lithium produced was used for batteries. In 2020, this share has increased to 66%, and it is expected to reach over 90% by 2030.
According to David Snyder, CEO and Director of Lilac Solutions Inc .:
There is a huge amount of funding flowing into the manufacturing of batteries and electric vehicles. And this is great news for the industry and for the planet.
There is money flowing in lithium, but much of that investment has been speculative.
It is in projects that do not have the credible technological path to develop into commercial production. And so, although significant investments are made, many projects benefiting from these investments have been stalled due to a lack of technology.
We have seen alarms raised this year in response to a global shortage of synthetic compounds urea. 90% of the urea produced is a nitrogen-releasing fertilizer.
However, it is also used to reduce pollutants and emissions from diesel and natural gas engines.
Truck drivers inject a urea-water solution into the exhaust stream of diesel vehicles before the gases pass through a catalytic converter. This ensures that diesel engines meet environmental standards for nitrogen oxide emissions.
In transport, urea is sold under the brand AdBlue.
India, Korea and Australia all import their urea from China.
Additionally, in November there were reports of urea panic buying in South Korea by owners of diesel vehicles after China urea export restricted until June 2022. 40% of South Korean cars run on diesel.
From the National Road Transport Association of Australia, Attributes of Warren Clark reducing exports in an attempt to deal with rising domestic fertilizer prices in local China and potential trade problems.
Australia scrambles to establish new urea supply chains with Japan, Indonesia and the United Arab Emirates to stop diesel truck stops that are wreaking havoc on the logistics industry.
According to Infinium CEO and co-founder Robert Schuetzle:
Crowded ports, idling freighters and supply chain delays are very likely to continue into 2022.
To tackle the increase in smog and pollution in busier ports, we expect transportation providers and governments to focus more quickly on greener alternatives, including clean electric solutions and electro-fuels that can replace traditional fossil fuels.
I think 2022 will be a bumpy ride folks, and we’ll be here to bring you the latest news and analysis.