Logistics managers are the Charlie Brown of Halloween. While the Peanuts gang got tasty treats, Charlie Brown got rocks. Let’s be honest, logistics managers all over the world are being thrown boulders. Nothing like all kinds of headwinds to hamper the flow of trade.

Here’s a look at the big three:

Boulder 1: Tanker and diesel crisis

“Economies around the world are recovering, increasing demand for diesel fuel,” explained Andrew Lipow, president of Lipow Oil Associates. “Meanwhile, the pandemic has led to the shutdown of refineries in the US and elsewhere, but has also delayed the start-up of new refining capacity around the world. Add to that a strike at a French refinery that has halted supplies from the market, and an upcoming EU ban on purchases of Russian crude oil on December 5 and Russian diesel on February 5, and diesel prices are rising rapidly.”

Diesel inventories in the New York/New England markets have fallen more than 50% since last year to their lowest level since 1990. Overall, diesel inventories this time of year have not been this low since 1951, with the largest shortages in the Northeast, including New York and New England.

As the cold weather approaches, it will be interesting to see where energy traders send their cargoes — to the Northeast or Europe. Let the battle begin.

Boulder 2: Hits

You know it’s bad when European port strikes don’t have the impact they once did in the news. It became backup noise.

The Unite trade union continues a two-week strike in Liverpool, England. Congestion is affecting ports in Germany and the Netherlands as trade flows continue to shift away from Liverpool. The reliability of the schedule is gone.

Bobby Morton, Unite’s national officer, continues to push, repeating the same message over and over again: they need wages that keep pace with inflation. Don’t be surprised by another strike. Dysfunction seems to be the new normal.

CNBC Supply Chain Heat Map

Closer to home, the immediate strike that logistics managers are watching is rail. November 19th, the day the International Motorcycling Brotherhood Road Maintenance Division (BMWED) will be able to strike, will be here before we know it.

Richard Edelman, a BMWED consultant and chief spokesman, told American Shipper that workers can’t take it anymore.

“The railroad consistently underestimates the frustration and anger of workers,” he said.

This underestimation was clearly revealed when the CEO of Union Pacific literally laughed on the air when asked about the possibility of a strike during a recent CNBC interview. I’m told the clip was sent out to another CEO with the caption, “That’s not what you do.”

This is corporate America’s version of a bull red flag.

Boulder 3: Mississippi River Drought

Record low water levels continue to disrupt river transit on the mighty Mississippi, throwing some cargo onto trucks and rails. If a rail strike happens, it will be a disaster. We all know there is a shortage of trucks and drivers to transport rail freight, but a shortage of diesel will only make the problem worse.

In addition to the boulders, logistics managers continue to receive rotten eggs: Xi Jinping’s endless “zero COVID-19” closures.

So the holiday season has kicked off with another cheer for the men and women in logistics. I think it’s time to write a letter to Santa Claus. Maybe good old St. Nick will help.


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