Month: August 2023

July grocery consumption

Inflation-adjusted July Personal Consumption Expenditures on Food-At-Home once again increased slightly (see chart below). If we continue to see these “slight” increases for a couple more consecutive months I will have to retire my use of “flat” to characterize the current slope. But this July our real PCE for food was $1032.4 billion while last July our real PCE was $1027.9 billion. That’s still flat enough for me. What’s less than $5 billion among friends and fellow citizens?

Here’s how Bloomberg explained the PCE results:

Low unemployment, pandemic-era savings and wage growth are providing Americans the wherewithal to keep spending, allowing the economy to power ahead. Many economists have had to push out their recession calls, or in some cases, scrap them altogether as a result. The latest figures point to a strong start to economic growth in the third quarter… The saving rate decreased to 3.5%, the lowest since November, suggesting the recent pace of spending may not be sustained in coming months. Pandemic-era savings are dwindling, the labor market is cooling, delinquency rates are rising and the resumption of student loan payments this fall threatens to further strain consumers’ finances. Retail executives have suggested as much and remain cautious about the outlook.

If Bloomberg is right I should be able to keep using flat or falling into the Autumn.

Force On Target

This blog often discusses Supply Chain Resilience in the context of Force On Target (recent examples here and here).

The resilience of a demand and supply network often depends which targets are hit hardest. Does the target play a central or peripheral role in network flows? Is the target isolated or are many other channels and nodes dependent on the target? What proportion of network flows depend on the target?

Many of us are watching how Tropical Depression 10 will develop over the next 48 hours or so. What sort of force will hit where? This Sunday morning’s NWS discussion includes:

The very warm and deep waters of the northwestern Caribbean Sea and Gulf of Mexico should support at least gradual strengthening during the next few days, tempered by moderate shear from a flat upper-level trough. However, this trough is forecast to amplify over the western Gulf of Mexico around Tuesday, which causes the shear to decrease near the cyclone in that time frame. There’s a notable risk of rapid intensification while the system moves across the record warm eastern and northeastern Gulf of Mexico…

Below are two data-generated graphics from from the Automated Tropical Cyclone Forecast system (ATCF) via TropicalTidbits. These and more are updated periodically. It remains very early. Right-now the models — based on this system’s recent behaviors, current and forecast context, and past performance of prior systems — give us a range of Force On Target possibilities to consider. Right now the bullseye is on Florida’s Big Bend. But we know both force and target could still change.

Emergent Force

Emerging Targets

Maui Update: Volume vs. Velocity

Roughly 14,000 residents of west Maui have been seriously impacted by recent wildfires, ranging from total property-loss to sudden death. More than 100 deaths have been confirmed while it is widely assumed many more were killed in the conflagration. There are now 388 who have been validated as missing (updated estimates here). More than 10,000 have registered with FEMA for individual assistance (here). Maui’s total population is about 165,000.

As of yesterday, over 2900 people continue in emergency housing (hotels, Airbnb, and related, more and more and more). Many others are residing with family or friends. Rebuilding of housing stock will be complicated, delayed, extended, and expensive. At least 1500 residential properties have been destroyed, out of about 73,000 in Maui County. A significant portion of emergency housing has been secured using hotels and timeshares within one to two miles north of the Lahaina burn zone.

Unsafe Water Advisories continue for Lahaina, Upper Kula, and some other areas. Initial testing for dangerous chemicals has been undertaken (results). Further testing needs to be completed before public water system flows can support human hydration. Even bathing and cleaning should be avoided if possible (more). Both bulk and bottled potable water are being otherwise distributed.

Retail grocery outlets, including Foodland, Safeway, and Walmart are open and operating within twenty-miles of fire decimated Lahaina. SNAP benefits for hot food purchases are now authorized. A SNAP benefit to replace food lost in the disaster is available. The Lahaina Safeway survived intact and is ready to reopen when local officials give the okay. The Maui Food Bank has expanded its operations. Maui County and other emergency food/water distribution sites have been active. The Salvation Army, American Red Cross, and other voluntary organizations and individuals have been providing hot foods and other support. (More.)

Cell communications have mostly been restored (here and here). Other network connections have also been deployed (here and here). Here’s the FCC August 25 Communications Status Report.

Just under 1900 customers remain disconnected from the grid. In many cases a structure has not survived to be reconnected. More than 2200 structures have been seriously damaged or destroyed.

As previously posted here, the upstream and midstream supply chains for food, bottled water, and other essential freight have continued to operate and increased flows into Maui since the August 8 disaster (more and more and more).

In terms of Supply Chain Resilience, there is much more volume but much less velocity compared to August 7. Given the distance between Maui and its sources, for example, higher volume food flows are moving at about the same speed as before the disaster. But direction — more to the point, targeting — is much less precise since so many consumers are dispersed and some key nodes (such as the Lahaina Safeway) are not yet reopened.

This is not unusual.  This is typical.  It is common to mistake a velocity-problem for a volume-problem.  But not only do “solutions” for a volume problem not fix velocity, the added volume almost always increases congestion that further degrades velocity (here).  This is such a common mistake it has become close to a principle of Supply Chain Resilience diagnosis and prescription of post-disaster conditions.

Correction/Clarification: For my original post I misunderstood a report on emergency housing. The post above is corrected. The last group shelters (sometimes congregate shelters) have been closed. Displaced people are now housed in a range of facilities that will be paid-for using FEMA and state funding. This housing and financial support will persist for an extended period. Here is a helpful summary from MauiNow: “On Tuesday, Aug. 22, the last of the sheltered wildfire survivors staying at the South Maui Community Park Gymnasium in Kīhei, regained privacy as they were transitioned to longer-term housing. Since Aug. 16, the American Red Cross, Hawaiʻi Emergency Management Agency and the Federal Emergency Management Agency relocated nearly 3,000 survivors of the Maui wildfires from congregate shelters to contracted hotels. In total, more than a dozen hotels and timeshare properties are currently housing more than 4,400 shelter survivors and hotel employee survivors, while some 900 people are booked in Airbnb units. These accommodations will continue to provide meals, casework services, financial recovery resources and other disaster relief assistance.”

Union Pacific: Cascading Consequences

Tropical Storm Hilary hit hard in the desert expanse between Los Angeles and Las Vegas. While sparsely populated, Hilary’s bullseye includes significant water, energy, and freight flows, including a major rail corridor connecting the Ports of LA/Long Beach with the rest of the United States.

On August 21 Union Pacific reported, “The Mojave and Yuma subdivisions are out of service due to water and mud over the tracks in the following California locations: Between Banning and Indio, Near Mojave, 10 miles north of Fontana (see map below). Widespread road and interstate closures are impacting our ability to transport crews to operate trains, and public electrical outages are impacting operations in some terminals. Once the storm passes and we are able to assess the status of our network in this area we will provide an update on estimated shipment delays” (more).

On August 22 Union Pacific reported, “Mud continues to flow back onto the tracks. Our Operating and Engineering teams are bringing in additional equipment to assist in clearing the track. There is a segment of double track that traverses a bridge that will need to be rebuilt…. Early estimates indicate the track may be out of service for approximately two weeks. Although we have returned service to some of the impacted segments, it will take multiple days to work through the backlog of trains. For safety purposes, these line segments will have temporary slow order speed restrictions placed upon them. We will also need to re-align locomotive power and crews to the region and customers should expect extended delays through the week.”

Also on Tuesday August 22, FreightWaves reported, “…normal rail flows stopped” after Sunday evening. The last loaded train to pass through the Loma Linda area was an eastbound mixed-manifest train with 109 cars, and it passed by at 8:39 p.m. PT… Ten days before the storm hit, the route saw an average of 31 trains, carrying a total of 3,600 carloads and 4,300 containers…” As this suggests, backlogs are accumulating quickly. On August 23 Union Pacific began restricting network access as far east as Chicago, Charlotte, and Atlanta in an effort to avoid total gridlock.

The potential for a high volume, high velocity node or channel to become a tangled chokepoint is an innate feature of most contemporary demand and supply networks. As this case suggests once flow is slowed or stopped at anyplace in the network there is a tendency for rapid congestion and related complications across the entire network, sometimes creating cascading impediments to recovery unless effectively mitigated. We see this again and again with airline networks, maritime flows, meat processing, and much, much more. Concentration is a key component of economies-of-scale that facilitate affordability and efficient, effective delivery to demand. But depending on context, what is usually a strength can suddenly become a serious weakness.

Map below shows UP system chokepoints on August 21 immediately following Hilary’s transit

Tropical Storm Hilary Map 082123 | O

MISO predicts peak-load

The Midcontinent Independent System Operator (MISO) is the regional reliability organization for electric utilities serving more than 40 million people in the central United States. Yesterday MISO released a “Maximum Generation Emergency Alert effective from 08/24/2023 12:00 EST until 08/24/2023 22:00 EST…” [See several updates below]

S&P Global reports, “Sweltering heat continues to push up power prices in the Central US, where the Southwest Power Pool set a peakload record of 56.18 GW Aug. 21 and the Midcontinent Independent System Operator was forecasting a record-smashing 130 GW of demand Aug. 24. In preparation for the soaring demand, MISO notified all local utilities in its footprint to prepare every available resource to serve the projected load, the grid operator said in a statement late Aug. 21. “We anticipate challenging operating conditions throughout the entire week, and we will need every available resource at some point,” Jessica Lucas, MISO executive director for system operations, said in the statement. (Below see SPG chart of MISO data.)

The emerging situation is of particular concern given the forward-looking assessment of MISO’s capacity in this year’s NERC Summer Reliability Assessment, “Demand forecasts and preliminary resource data indicate that MISO is at risk of operating reserve shortfalls during periods of high demand or low resource output. MISO’s resources are projected to be lower than in the summer of 2022 while net internal demand has also decreased. Firm transmission imports for this summer have significantly increased; this has resulted in a higher Anticipated Reserve Margin (ARM) of 23% (on an installed capacity basis) compared to 21% last summer…”

The prior paragraph is purposeful in highlighting ambivalence — both strengths and weaknesses. Bottom line: capacity is lower than last year and tomorrow’s demand is expected to spike. Our situation on Thursday night may mostly depend on some consumer restraint in the face of brutal temperatures and how the wind blows. The Summer Reliability Assessment for MISO also notes, “Performance of wind generators during periods of high electricity demand is a key factor in determining whether system operators need to employ operating mitigations, such as maximum-generation declarations and energy emergencies. MISO has over 30,300 MW of installed wind capacity; however, the historically-based on-peak capacity contribution is 5,488 MW.”

The MISO demand/supply dashboard can be accessed here.


August 24 Update: The following alert was distributed 8:16 Central Time this morning: “MISO is escalating the Maximum Generation Alert to a Maximum Generation Emergency Event Step 2a effective from 12:00  until 22:00 EST today for the MISO Balancing Authority Area. The reason for the Event is because of Forced Generation Outages, Above Normal Temps, Higher than Forecasted Load.” According to Reuters, “MISO projected it would have 125,907 MW of supplies available with 120,656 MW from internal resources and 5,251 MW of imports. That would not be enough to meet the grid’s forecast peak of 127,692 MW, which would top the system’s all-time high of 127,100 MW in July 2011.” Reuters and others are also reporting that the Texas grid is facing similar shortfalls today (more).

Later: At 2:00 Central Time on Thursday some personal observations: MISO’s solar and fossil-fuel generators are achieving forecasts. MISO’s wind generation has been less than forecast most of today. For example, the day-ahead forecast for 1:00 Central anticipated 4294MW being generated, instead 3134.33MW was being generated. At 2:00 the deficit had grown to just over 1500MW. Imports seem to be arriving as anticipated. This is, however, a wide-area challenge encompassing at least the Southwest Power Pool, ERCOT, and MISO. Will exports from other regions be sufficient to fill gaps across such a wide area? Behavior of the national grid can be monitored on the EIA website.

August 25 Early Morning Update: The mid-continent’s grid did not fail on Thursday. Both MISO and ERCOT avoided rolling blackouts and other extreme measures, but barely. Good news does not attract the attention that would have been given the opposite. I will be looking for more detailed assessments from domain specialists. Bloomberg is crediting a pop-up thunderstorm for cooling demand in Houston. Right now, it seems to me that in combination with other measures, it was possible to import more power from other regions when it was needed most. The chart immediately below is most of yesterday’s import pattern for MISO. At about 4:45 PM local time (16:45 on chart) imports peaked (or on this chart bottomed-out) at slightly more than 8745MW, even more than scheduled, much more than expected on Thursday morning. I won’t have access to data for another 24 hours or so, but I bet PJM was exporting lots of megawatts to MISO. In the case of ERCOT (Texas), they were importing too, but I am as intrigued with the release of “stored power”(see second chart below). Just before 8PM local this was contributing 1132MW… just as solar power was fading and evening demand was peaking. Related to this report? I’m not sure. Almost certainly related to this report.

Below is the August 24 Fuel Mix for ERCOT (Electric Reliability Council of Texas)

The chart above reflects “previous day” fuel mix, so for August 24, 2023

August 25 Afternoon Update: Bloomberg reports, “A punishing heat wave will test power supplies in Texas for a second day as triple-digit temperatures continue to drive up electricity consumption. The state’s grid operator expects to have almost 80 gigawatts of capacity available at about 8 p.m. local time, after solar farms start shutting off, based on hourly forecasts. Demand will be within about 1 gigawatt of that total. Five-minute forecasts show demand exceeding supply around that time…”

August 26 Update: It was once again very close, but the Texas grid made it through another sundown. Here’s more from the Dallas NBC affiliate. Below are the Friday, August 25 supply slopes. Excessive heat is forecast to continue through this weekend. MISO has also declared a Hot Weather Alert through Sunday.

August 27 Update: The Texas grid continues to operate along the cusp. Reuters is reporting renewed conservation requests by ERCOT. The warnings and earnest requests are prudent. Repeated skin-of-the-teeth avoidance of blackouts does tend to reduce attention and related conservation behavior…

September 2 Update: S&P Global has published an important, helpful review of ERCOT performance over the month of August. The report includes the following:

ERCOT President and CEO Pablo Vegas said Texas power consumers’ response to requests to conserve energy enabled the grid to avoid declaring Energy Emergency Alerts so far this summer, despite setting 10 peakload records, most recently 85.4 GW on Aug. 10. In comparison with summer 2022’s all-time peak of 80.1 GW, the increase has been more than 5 GW, Vegas said, about 7% growth year on year, compared with nationwide annual load growth averaging about 1% since the early 2000s. Texas’ energy demand reflects the growing Texas population and economy, which bring with them “demands on infrastructure in highways, schools and energy,” Vegas said. “I don’t think anybody expects the growth to slow down meaningfully…”

An August 31 report in the Texas Tribune mostly agrees with Vargas and raises the threat of conservation fatigue. “Repetitive power conservation appeals by the state’s grid operator face a challenge: Texans becoming less responsive to calls. Past conservation requests have helped reduce 100,000 homes worth of power demand on the grid.”

Hilary et al: Force-On-Target

Hilary swept through Southern California with a record-breaking overnight visit. According to ABC10 news , “A slight eastward jog in the track of Hilary though Baja California meant the heaviest rain and strongest winds occurred east of the Peninsular Ranges, sparing the densely-populated coastal cities from the worst of the storm… The deserts of Southern California were particularly hard hit, with 4-10 inches of rain falling in places like El Centro and Palm Springs… Many areas saw at least an average year’s worth of rain in 48 hours…” (see screen capture below). (More and more and more and more.)

A late Sunday afternoon magnitude 5.1 earthquake east of Los Angeles contributed an extra dose of Hollywood-like dread to what might happen overnight.

A tropical storm swiping San Diego is entirely different from a hurricane hitting Los Angeles. A tropical storm tearing through the Imperial Valley, Salton Sea, Joshua Tree, and Mojave is very different from four to ten inches in one day for any urban area, Los Angeles Basin infrastructure, or supply chain clusters in San Bernardino County.  Wherever “an average year’s worth of rain in 48 hours” occurs, flooding, landslides, and related infrastructure troubles will unfold. 

But supply chain clusters and capacity concentrations are highly differentiated by target area. Risk emerges from the interplay of threat with vulnerability. The risk associated with a very hard hit on empty space is nil. The more capacity and interdependencies in any particular place, the more vulnerability to even incidental threats.

In the case of Hilary, the threat was substantive but the storm track happened to spare (that “eastward jog”) the largest inventory of potential vulnerabilities. Our situation today would be very different if, instead of making landfall in Baja, Hilary had come ashore at Long Beach with maximum rain and wind hitting the ports, refineries, urban transportation network, and dense population. (See more on the historical precedent here and here.)

A magnitude-5.1 earthquake in rural Ventura County spawns different consequences than a 5.1 along Ventura Boulevard at the intersection of the 101 and 405. A 7.1 in either place will be horribly destructive. There is, however, much more to destroy in the vicinity of Ventura Boulevard and many more people to harm.

When Ojai or Palm Springs are hit hard, proximity to the supply chain capacity of metro Los Angeles allows for rapid and effective response and recovery. Fort Myers was helped because Tampa was spared. Lahaina is getting more help faster because Kahului continues to operate and Honolulu still receives flow from Oakland, Long Beach, and elsewhere. But when a network’s core capacity is hit hard, response will be constrained and recovery long delayed.

This reality is widely recognized by supply chain and crisis management professionals, but tends to be discounted. The discounting is reinforced by easy-to-anticipate — if hard to predict — catastrophic outcomes (more and more) of losing any major proportion of water, food, fuel, or related supply chain capacity serving a large population. The problems of lost-capacity can seem so overwhelming that many otherwise tough-as-nails veterans are reduced to hoping for another slight jog.

There are mitigation strategies to explore, exercise, and worth our investment of time, thought, and more. In a future post I will list a few. But this morning’s challenge is that rush of dopamine many of us (me too) experience when the bullet just dodged somehow discounts the artillery round still to come.

Freight vitality

Freight is where, when, and how push meets pull. Demand prompts supply, freight fulfills demand. Air cargo, maritime (riverine and ocean-going), train, truckload, LTL, refrigerated, van, flatbed, package delivery, and even more reflect diverse modes, intermodal possibilities, and diverse, responsive spot and contract markets. Freight is most of how volumes achieve velocity.

The many parts of the freight sector are highly interdependent, but most deliveries finally depend on some sort of truck and trucker on the road able to refuel (here and here).

The chart below suggests the steep peaks, deep valleys, and recurring volatility of the US trucking market. The red line is basically volume (compared to a 1990 baseline). The blue line is the Producer Price Index (PPI) for the trucking sector, measuring price changes freight carriers command or suffer. When demand for stuff is strong and stresses capacity (e.g., first half of 2022), prices will trend higher. When freight demand falls, especially if capacity hangs on (e.g., since at least last summer), prices will be softer… in this case, compared to a 1992 base-line (more and more).

There are plenty of other freight indicators: FreightWaves SONAR, DAT Trendlines, Bank of America Truckload Demand Indicator, U.S. Bank Freight Payments Index, ATA Truck Tonnage Index — each offering different angles more or less current. Diesel prices are absolutely worth tracking. Most of these smoke signals now agree — some more, some less enthusiastically — with Brooke Sutherland at Bloomberg The free-falling freight market may finally be finding a bottom. Shippers shouldn’t count on a return to the go-go days of Covid, but resilient US consumers offer a way out of the morass…”

Volumes are more or less fine, not great but no where near the deepest valleys of 2020 or even 2017. Price-drops may have stopped (at least slowed) while still above pre-pandemic levels, even after adjusting for inflation (see second chart below). The recent loss or downsizing of some trucking firms, such as Yellow, can be good news for those still hauling.

Freight movement is analogous to human blood pressure, not too high and not too low is best for the whole supply chain. I’m sure truckers hope our current pace and related pressure builds a bit, there is existing capacity to do more. But current flow volumes and velocity are inside healthy ranges.

One Month Percent Change: PPI Transportation Services-truck transportation of freight, not seasonally adjusted

Bureau of Labor Statistics, Data extracted on: August 17, 2023 (5:59:47 AM)

August Vital Signs

Every four to five weeks I update the following indicators. Here are the July and June updates. These are not comprehensive indicators. For comprehensive please see other sources, such as the Global Supply Chain Pressure Index or the Logistics Managers Index. But combined with more comprehensive measures, these five factors give me a finer sense of overall flow capacity, current discharge, and emerging conditions.

North American Agricultural Production: On August 11 the USDA released its World Agricultural Supply and Demand Estimates. Here are some excerpts:

The outlook for 2023/24 U.S. wheat this month is for decreased supplies, slightly lower domestic use, reduced exports, and higher stocks. Supplies are reduced as wheat production is forecast at 1,734 million bushels, down 5 million from last month… Canada is decreased 2.0 million tons to 33.0 million on worsening drought conditions in the Prairie Provinces… This month’s 2023/24 U.S. corn outlook is for reduced supplies, lower domestic use, smaller exports, and tighter ending stocks… Corn production for 2023/24 is forecast at 15.1 billion bushels, down 209 million from the July projection and if realized, would be the second highest on record behind 2016/17. [Drought has also reduced Canada’s anticipated course grains production.]… The outlook for U.S. rice in 2023/24 is for increased supplies and ending stocks compared with last month and no other changes. The initial survey-based production forecast for the 2023/24 crop increases production from the previous forecast by 2.6 million cwt to 203.6 million, all on higher yields. [Information on crop production outside North America is summarized here, please see updates below the chart.]

[August 17 Update: S&P Global provides a helpful weather watch related to US and global crop conditions.]

Global Natural Gas Demand and Supply: According to most market sources the natural gas market is currently close to a healthy equilibrium. Prices are well-below last year’s war-time premiums. Last week EIA commented, “We expect global liquefied natural gas (LNG) import capacity (also known as regasification capacity) to expand by 16%, or 22.8 billion cubic feet per day (Bcf/d), in 2023‒24 compared with 2022 once all regasification terminals currently under construction are completed.” But some near-term risks to persistent flows are causing some price volatility. S&P Global reports, “Workers at Australia’s Gorgon, Wheatstone and North West Shelf LNG projects are threatening to go on strike due to disagreements over pay and working conditions. Gas companies Woodside and Chevron have been in talks with the workers unions to address their concerns. The three LNG terminals have a total LNG export capacity of around 41 million mt/year that equals to around 10%-11% of global LNG supply. The news has already sent European TTF gas prices and Asian spot LNG prices higher as a disruption could coincide with the early winter restocking season, when Europe competes with Asia for LNG supplies.” (More and more and see chart below.)

China Export Volumes and Value: Reuters reports, “China’s imports and exports fell much faster than expected in July as weaker demand threatens recovery prospects in the world’s second-largest economy… The grim trade numbers reinforce expectations that economic activity could slow further in the third quarter, with construction, manufacturing and services activity, foreign direct investment and industrial profits all weakening… Imports dropped 12.4% in July year-on-year… and off a 6.8% decline in June. Meanwhile, exports contracted 14.5%, steeper than an expected 12.5% decline and the previous month’s 12.4% fall. The pace of export decline was the fastest since the onset of the pandemic in early 2020” (more and more and more). And it should be emphasized, 2022 exports were near record highs, if not quite as high as August and September 2022. Still… the pattern has been persistent and seems unlikely to turn-around soon. China’s exports to the United States are down about one-quarter so far in 2023 (more) and well below pre-pandemic patterns.

North American Grid Capacity: An August 4 post — plus updates on August 10, 12, and 14 — gave considerable attention to this issue. I will add the following blurb from a helpful August 8 EIA report, “In the first half of 2023, developers added 16.8 gigawatts (GW) of new utility-scale electric generating capacity to the U.S. power grid, according to our latest inventory of electric generators. Developers plan to bring an additional 35.2 GW of capacity online in the second half of the year… Solar power accounted for the largest share, 35% (5.9 GW) of the capacity that came online in the first half of 2023. That new capacity is 4.6 GW less than what developers and project planners reported expecting for the period at the beginning of the year. Supply chain constraints were the primary cause for this shortfall.” As the August 4 post note there is a continuing challenge fully connecting and flexibly transmitting this new capacity, especially between major grid regions.

US Personal Consumption Expenditures: Yesterday’s strong July retail sales report suggests that the pattern of Personal Consumption Expenditures for June has persisted (more). I have wanted to see flat, but it is increasingly difficult to obscure the increasing upward slope since March (see second chart below). According to the Census Bureau, “Advance estimates of U.S. retail and food services sales for July 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $696.4 billion, up 0.7 percent (±0.5 percent) from the previous month, and up 3.2 percent (±0.7 percent) above July 2022.”

My read of current vitals: Demand is strong while mostly stable, this facilitates push fulfilling pull. Despite both ordinary — and some extraordinary — threats, North American (and even global) food flows remain sufficient to abundant for those with the ability to pay increasing prices. Global energy supplies, similar to food supplies, are mostly coherent with effectual demand… since demand (especially from China) is not expected to see much near-term growth. Electrical generating capacity is moving in the right direction even if with lagging constraints on transmission/distribution. So… mostly healthy. Threats to all of this are prolific, but barring the hardest hits on the highest proportion concentrations the overall network is demonstrating meaningful capacity, adaptation, and resilience.

Maui Mass Care

Upstream and midstream flows serving Maui are operating above preexisting capacity. Downstream flows — and especially demand velocities — have been very seriously disrupted. What is needed, how much is needed, and precisely where it is needed are not yet entirely clear to downstream operators.

Upstream flows from Port of Oakland and Port of Long Beach are consistent with prior schedules. Matson and Pasha are the principal Jones Act carriers delivering groceries, medical goods, and other essentials into Honolulu. Air cargo flights into Hawaii and, specifically, into Kahului Airport on Maui have been expanded (here and here and here).

Midstream flows from Honolulu to Maui have also been consistent with or better than prior volumes and velocity. Maui is mostly supplied out of Honolulu (less than 100 miles distant, one way ferry transport usually takes 2.5 hours). Here is how Matson explains their current flow:

Matson operates a hub-and-spoke system in Hawaii, sailing mainline containerships between the U.S. West Coast and Honolulu three times a week, with connecting service to the Neighbor Islands on owned barges. It will maintain its normal schedule of barge arrivals at Kahului on Tuesdays and Fridays. The company has scheduled one extra Maui sailing, on Sunday, August 20, and is considering additional sailings to Maui should they be needed.

Young Brothers is an especially important midstream — inter-island — carrier. As early as August 9, Young Brothers explained:

The Port of Kahului is fully operational and will be accepting and delivering cargo as normal. To support relief efforts in the face of the disastrous wildfires that have impacted the communities of Maui, we will be prioritizing the loading and discharge of medical supplies and emergency and utility vehicles to the port of Kahului over the next few sailings. Young Brothers will strive to ensure that bookings for gated cargo sail on the currently scheduled sailing date(s). However, due to shifts in capacity for certain sailings, Young Brothers may re-book some cargo to the next available sailing.  As a reminder, less than container load cargo is moved on a space available basis and priority will be given to cargo that support relief efforts.

Downstream flows, especially in western Maui (see maps below and here), suddenly fractured (in some places melted or were reduced to ash), consumer ability to signal demand was very constrained even as immediate demand spiked. Demand nodes — such as grocery stores and restaurants — have been destroyed. The ability to purchase supply has been reduced by loss of these nodes, unreliable cell networks, and loss of related digital transaction networks. Most housing in Lahaina (population: @ 13,000) is estimated to be a total loss, including the loss of residential food stocks (see second map below). Most supply channels have survived, but localized scope and scale were sparse even before this disaster and perimeter controls remain in place. The local public water system is mostly intact, but in the hardest hit locations water is considered unsafe to drink. Grid power remains unavailable to roughly 5000 customers in Maui County. Cell coverage is beginning to recover.

The flow networks supplying Maui’s demand were not seriously impacted by the August 8 and subsequent wildfires. These flow networks have flexed in response to devastating local losses. But western Maui, in particular, is on the far outer edge of high volume, high velocity demand and supply networks. In the case of no-notice or fast-onset major disasters, local demand will often be separated from outside flow for 72 hours or longer. Local demand is usually displaced and discombobulated. Local supply nodes are often disrupted or destroyed. Reconnecting network supply with local demand is delayed by lack of communication, loss of essential infrastructure, and many other factors. Utter destruction of the built environment, as in Lahaina, will extend this isolation period… especially where preexisting flows were already peripheral.

Initial response, inside this 72 hour window, is most likely to spontaneously emerge from immediately proximate and less-systematic behavior where survivors directly help survivors (more and more). The more physically isolated the disaster locale, the more time-extended this period of initial response. The more proximate the impact zone to a comparatively unscathed concentration of supply, the more quickly network capacity can be recovered and deployed. None of this is surprising. All of this has been empirically demonstrated and confirmed for over seventy years (one classic example here).

The recurrent reality of this delay is not comforting to survivors. Many disaster response professionals (both private and public) work hard to reduce this delay. But physical limitations of distance, time, capacity, and interdependencies can be very stubborn. More comforting is the “cornucopia” of supply that typically emerges in the extended aftermath of the isolation period… at least where and when effectual demand persists and preexisting network capacity has also survived.

[On August 25 a new post updated the status of recovery for Maui.]

Literally low flows

According to the Wall Street Journal, “Low water levels on the Mississippi River are threatening to disrupt commerce for a second consecutive year… Water levels in St. Louis and Memphis are 10 to 20 feet lower at this point in the year than in 2020 and 2019 due to lack of rain.” (More and more)

Bloomberg reports on Rhine river reductions, “After brutal heat waves scorched southern Europe, the river at Kaub, a key waypoint west of Frankfurt, has hit levels this summer that mean some ships could carry only about half of normal capacity. While recent rains have eased the strain, even small changes can have a major impact. A drop of 10 centimeters (four inches) means about 100 fewer tons can be transported per ship…”

S&P Global explains Panama Canal restrictions, “As the dry season has continued to wreak havoc on the water levels at Gatun Lake, canal wait times have increased sharply amid draft restrictions and a reduced number of transit allotments. The most recent draft restrictions, announced June 22, put the maximum authorized draft for the Neopanamax locks at 44 feet and 39.5 feet for the Panamax locks. Under normal conditions, with no draft restrictions, the maximum draft authorized for the Neopanamax locks is up to 50 feet and up to 39.5 feet for the Panamax locks.” See picture below.

The Yangtze has recovered from last year’s drought. Ohio river water levels are near long-time averages. In some places the Danube’s water level is double last August. The Rhine’s flow is better this week than last week. But shipping disruptions caused by drought have spiked in recent years.

Gatun Lake (Panama) shows drought impacts: more from Wall Street Journal