Month: June 2024

Shock then stress, now synchronicity

What were you doing thirty to sixty days ago? Well, according to the Bureau of Economic Analysis during the month of May the increasingly mythical “average American” was making just little bit more and so consuming a bit more goods and services that in aggregate cost a tiny bit less and even saving itty-bitty more than in most recent months. (Bit = a fragment, a morsel, a small bite.) Bloomberg reported, “The so-called core personal consumption expenditures price index, which strips out volatile food and energy items, increased 0.1% from the prior month. That marked the smallest advance in six months. On an unrounded basis, it was up just 0.08%, the least since November 2020.”

Many use Personal Consumption Expenditure to measure inflation. I find the inflation-adjusted “Real PCE” estimate my best-available signal of existing effectual demand. The first chart below shows Real PCE with its goods and services components. The May 2024 Real PCE was about 12 percent more than the May 2019 Real PCE. This is consistent with the May 2014-May 2019 increase in Real PCE. So, I perceive robust demand. This kind of growth is a healthy foundation for supply chains. The second chart below is Real PCE for Food-At-Home. Demand for groceries is still above pre-pandemic trends, but has fallen considerably from a steep peak three years ago. Upstream and midstream players have been able to adapt to the demand levels of the last two years.

Four years ago demand suddenly collapsed for most goods and services, even as it surged for a few others (e.g., Food-At-Home). This supply chain shock set the stage for two years of significant systemic stress and ongoing volatility. Healthy supply chains are seldom “stable”, but current direction, speed, and magnitude is much more conducive to confidently fulfilling demand than anytime between March 2020 and late 2021.

Hurricane Season: Concentrating on Concentrations

[July 1 Update below] Some readers found my June 10 post on hurricane season, “a bit too thin” or “… “too fast”… or “too big-picture” (among other comments, including some positive). So, here’s a try at something meatier, slower, and more tightly focused. The original post was organized around threats, vulnerabilities, and consequences. Looking at Hurricane Ian’s consequences I argued, “Because midstream capacity concentrations were not hit, flow continued downstream to concentrations of demand. The harder the hit upstream the more disruption (or worse) downstream.”

The threat of a major hurricane — Category 3 and above (more than 111 miles per hour) — in the United States is concentrated in Florida, Texas, and Louisiana. Since 1851 three-quarters of major hurricanes recorded on the mainland United States have involved these three states. (Puerto Rico and Guam are much smaller targets but experience even more frequent cyclones per square mile.) The first map below only shows Category 4 and 5 hurricanes since 1924.

In most of the United States supply chains will usually be resilient (not invulnerable, but adaptable) unless key capacity concentrations are lost or throughput is significantly reduced for an extended time. Two well-known examples are when the Colonial Pipeline was disrupted by a cyberattack and when contamination halted production at Abbott’s Sturgis, Michigan infant formula facility. In each case a “Pareto Proportion” of supply for specific sources of demand suddenly stopped.

Similar concentration risks exist in a wide array of networks. Food tends to be most heavily concentrated at the distribution level.(Food production concentration can also be intense, as the infant formula example demonstrates. But in most food categories there are abundant replacement products.) Fuel is highly concentrated at both production and distribution levels. The second map below shows refineries located in “hurricane alley”. The third map shows refined product pipelines. (In Florida fuel flows mostly depend on maritime deliveries to Port Tampa Bay — more than 40 percent — and Port Everglades — about one-third of state fuel consumption.) Local fuel distribution capacity is mostly fixed by the number of nearby racks, regionally anchored fuel tanker trucks, and their drivers. Freight flows — especially long-distance flows — are concentrated in a comparatively few channels. For example, the fourth map below shows how freight flows depend on a few Interstate highway corridors. I-10, I-75, I-35 and I-95 would be especially tough to replace.

Over 70 percent of food consumed in the United States is carried by truck. In most of this hurricane prone region some three-party combination of Walmart, Publix, HEB, Kroger, C&S Wholesale, Albertsons, and Associated Wholesale Grocers distribute a Pareto Proportion of food consumed. Their Distribution Centers are often clustered (see the last map for an example). Their inbound and outbound trucks usually take very similar routes. According to the Commodity Flow Survey, Freight Analysis Framework, and other sources roughly one-third of food products in this region originate in the host state and another 10 to 15 percent originate in a neighboring state. Roughly half of food consumed comes from farther away. (The FEWSION project is a good source for aggregated food flow data and helpful measurement tools.)

Right now, the electrical grid is humming. Fuel pipelines and racks are flowing. Interstates are open. Truck stops are operating. In late June, gasoline and diesel inventories for this region are in good shape. According to FreightWaves, trucking capacity in the Southeast US is tighter now than in recent years — but perhaps better matched with consistent demand. According to DAT, the demand for refrigerated vans — especially important for food flows — is tighter in the Southeast than in most of the rest the United States. But this is “tight” as in tailored, not a death-grip. Grocery distribution centers are receiving inbound from near and far while discharging daily into their retail networks.

Good news: These food, fuel, and freight concentrations have enormous capacity. When and where this capacity persists it is fundamental to serving the needs of those hit hard by hurricanes or other disasters. Bad news: if these capacity concentrations are seriously disrupted alternatives can be few and far between…

The hurricane forecast for the Atlantic is foreboding. Ocean temperatures are hot (here and here). As of Thursday morning, June 27, the National Hurricane Center says, “A tropical wave located several hundred miles west-southwest of the Cabo Verde Islands continues to produce disorganized shower and thunderstorm activity. Environmental conditions are forecast to be conducive, and development of this system is anticipated. A tropical depression or tropical storm is likely to form this weekend several hundred miles east of the Windward Islands while the system moves westward at 15 to 20 mph.”

Ready or not.

Category 4 and 5 Hurricanes since 1924 (Source: NOAA)

Concentration of Refining Capacity (Source: Energy Information Administration)

Refined Petroleum Product Pipelines (Source: Energy Information Administration)

Freight Volume by Weight (Source: Bureau of Transportation Statistics)

Four market-leading grocery distribution centers west of Jacksonville, Florida. Sources for over 80 percent of grocery flows serving a wide region. (Approximately 16 miles west to east)


July 1 Update: Since Thursday that “Tropical Wave” has become Hurricane Beryl. The Weather Channel reports, “B​eryl is the easternmost hurricane and first “major hurricane” (Category 3+) to form in the tropical Atlantic during the month of June.” In the next 24 hours Barbados, St. Lucia, St. Vincent and the Grenadine Islands, Grenada and Tobago will be hit hard. Below is how the models set-up potential action for late this week. Depending on Beryl’s track, very different capacity concentrations are potentially vulnerable. More on July 2 and the Washington Post reports, “Beryl strengthened into Category 4 a week earlier than any storm of that strength ever observed, breaking a record set by Hurricane Dennis in the hyperactive 2005 storm season. It also became the fastest-strengthening storm on record before the month of September. This kind of early-season activity in the area is a strong predictor of a large tally of tropical storms by late fall…”

Strong Pull Persists

Yesterday the Census Bureau reported, “Advance estimates of U.S. retail and food services sales for May 2024, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $703.1 billion, up 0.1 percent (±0.4 percent)* from the previous month, and up 2.3 percent (±0.5 percent) above May 2023. Total sales for the March 2024 through May 2024 period were up 2.9 percent (±0.5 percent) from the same period a year ago.”

Despite all those ups, media reaction was decidedly down. For example, CNBC reported, “Retail spending was weaker than expected in May as consumers continued to wrestle with stubbornly higher levels of inflation.” (More and more.)

These judgments can be prone to the narcissism of small differences, but I perceive that, instead, retail spending continues its strong post-pandemic pattern. Please see first chart below. The retail sales growth rate has certainly — helpfully — slowed. But in May 2024 retail sales were $609,474 million compared to $449,524 million in May 2019. That’s better than a quarter higher. (In 2023, the average rate of inflation was 4.1 percent. In 2022, the average rate of inflation was eight percent. In 2021, the average rate of inflation was 4.7 percent. In 2020, the average rate of inflation was 1.2 percent.) Since 2019 American’s “real” retail purchases are at least seven percent higher despite “wrestling” with higher levels of inflation.

Maybe wrestling makes us hungry. Last month Americans spent about one-quarter more on groceries than in May 2019, despite many months of reduced inflationary impacts on food prices. (See second chart below). Inflation is pernicious in all sorts of ways. Inflation certainly undercuts the value of the money we have to spend. But for more affluent consumers there is some accumulating evidence that inflation masks — facilitates — self-accelerated spending too.

In any case, the supply chain capacity deployed to fulfill increased post-pandemic demand has demonstrated adaptability and sustainability, especially given the still stubbornly reduced retail inventories to sales ratio. Just-in-Time is even more pronounced (as further signaled by another better-than-nine-percent sales increase for “non-store retailers”, here and here). Pull persists shaping the volumes and velocities of push.

Summer Solstice Flow Forecasts

According to the USDA, during 2024 the world is leaning toward a bit less wheat, corn, and soybeans. But existing stocks will mostly fill the gap. There will likely be a bit more rice. But whether up or down the shifts are under one percent on huge volumes. Large-scale, short-term weather and crop conditions look okay in most high-production places (see map below). According to the World Meteorological Organization, a transition from an El Niño to a La Niña weather pattern is underway. In the next several weeks WMO forecasts a “large-scale cooling of the ocean surface temperatures in the central and eastern equatorial Pacific Ocean, coupled with changes in the tropical atmospheric circulation, namely winds, pressure and rainfall. The effects of each La Niña event vary depending on the intensity, duration, time of year when it develops, and the interaction with other modes of climate variability. “

Last week the US Energy Information Administration wrote, “We forecast U.S. crude oil production will grow by 2% in 2024 and average 13.2 million barrels per day (b/d) for the year and a further 4% in 2025. If our forecast is realized, U.S. crude oil production would set new annual records in both 2024 and 2025.” Global oil futures — bouncing around the low to mid 80s — imply widespread expectations for sufficient supply (see Brent Crude chart below). A provocative new long-range forecast by the International Energy Agency offers:

Based on today’s policies and market trends, strong demand from fast-growing economies in Asia, as well as from the aviation and petrochemicals sectors, is set to drive oil use higher in the coming years, the report finds. But those gains will increasingly be offset by factors such as rising electric car sales, fuel efficiency improvements in conventional vehicles, declining use of oil for electricity generation in the Middle East, and structural economic shifts. As a result, the report forecasts that global oil demand, which including biofuels averaged just over 102 million barrels per day in 2023, will level off near 106 million barrels per day towards the end of this decade. In parallel, a surge in global oil production capacity, led by the United States and other producers in the Americas, is expected to outstrip demand growth between now and 2030. Total supply capacity is forecast to rise to nearly 114 million barrels a day by 2030 – a staggering 8 million barrels per day above projected global demand... (More and more.)

The IEA forecast depends on global grid capacity expanding as quickly as needed between now and 2030. This is possible, but will not happen without serious challenges — and occasional failures — along the way. There are both near-term and long-term gaps to fill, especially where demand is growing fast. ERCOT, the Texas grid operator, is an especially colorful canary in this coal mine. Spectrum news recently reported, “ERCOT says there is a 12% chance of rolling blackouts this August. Officials are also warning that demand will increase exponentially over the next several years… A 40-gigawatt increase from one year to the next in the five-year horizon. That’s effectively almost doubling the peak demand of the ERCOT grid in about six years.” (More and more and more. )

Fuel costs associated with crude at under $90 per barrel tend to result in less freight cost volatility (and related structural stresses). The gradual normalization of Panama Canal transits incrementally smooths global flows. Suez canal transits are, of course, still suppressed and down nearly two-thirds from last year. Still, despite various frictions (here and here and here), overall global trade volumes are up over slow 2023 flows (here and here). Given otherwise strong economic data, there is no particular reason to expect the real-value of US goods imports to fall far in the still underway second-quarter. The Global Supply Chain Pressure Index continues to show lower than average measures. The Cass Shipment Index has been softening but remains in its mid-range. DAT Trendlines are mixed, but big early summer increases in year-over-year load-to-truck rates are meaningful.

Millions of people are largely excluded from these robust flows. This is not, however, caused by upstream capacity constraints. Places on the periphery of big midstream channels are more likely to have problems. But absence or paucity of effectual downstream pull is the most common culprit. There are significant geo-political, climate-related, and other natural risks that could catastrophically subvert upstream capacity and midstream velocity with dangerous downstream results. But as the second half of June leans into the second half of 2024, global flows are strong.


June 24 Update: Using the same or similar information sources, Peter Goodman at the New York Times offers a very different interpretation than above — or that offered in my May 27 overview — regarding freight flows. We both perceive increased friction, related congestion, higher prices, and plenty of prospects for additional risks. I tend to see high capacity complex networks morphing with volatile context. Mr. Goodman seems to see a highly concentrated, engineered system being manipulated in unsustainable ways. There is certainly some of each (and much more) going on. What is predominant? What is the straw that might break the camel’s back? What flutter of butterfly wings will facilitate persistent flows?

June 25 Update: I wonder if some Bloomberg editor explicitly decided to challenge Peter Goodman’s argument. In any case, this morning there is an alternative interpretation of supply chain stress available here. The Bloomberg piece channels Jason Miller explaining that upstream capacity is well-calibrated with (even a bit excessive considering) current demand… and midstream channels have the ability to maintain necessary flow velocity. This is suspiciously close to my own perception, so I may be hearing what I want to hear. Worth reading both points-of-view.

Listening to the Cascadia Quartet

Last Friday the journal ScienceAdvances published the outcomes of recent research on the Cascadia Subduction Zone. Here is a summary paragraph from the report:

An important finding of our study is that a horizon interpreted as the plate interface transects the deep sediments of the inner wedge offshore of the Olympic peninsula… This décollement beneath the inner wedge extends downdip of the region of flattest TOC and has latitudinal extents that are aligned with the modeled high slip patch for the 1700 CE event… Incoming JdF plate basement relief is low and negligible faulting related to bending of the plate is detected seaward of the DF in this region… With the presence of the deeper slip surface in the sediment column, a smooth plate interface is inferred, which may also contribute to giant earthquake potential… The longer recurrence intervals estimated for this portion of the margin from offshore turbidite records… are also consistent with a larger amount of slip per event, related to larger rupture area. From these observations of plate interface geometry and properties, we infer that the south Vancouver Island through Washington region has greater potential than other sections of the margin for the largest earthquake ruptures. [Map below is from the report.]

Following is one translation of this careful scientific rhetoric:

[The study] has revealed that the fault splits into four segments instead of being one continuous strip like most fault lines. The discovery could prove more catastrophic because the tectonic plates can slide under each other, creating more pressure and more severe earthquakes The researchers concluded the Cascadia Subduction Zone has the potential to unleash a nine-plus magnitude quake… Cascadia’s four segments make it more dangerous than other major fault lines because they have different rock and sediment, with the most concerning section extending along northern Oregon, into Washington and southern British Columbia… This section of Cascadia is flatter and smoother than the other three sections, meaning it could cause the largest earthquakes, extending further into the US and impacting all of Washington’s coastal communities… Neither Oregon nor Washington state is sufficiently prepared for this type of disaster because of the limited information in the 1980s Cascadia model...

Here’s another translation from LiveScience. Here’s how the Seattle Times covered the report.

There is, of course, concern — considerable confidence — that a significant shift in this deep décollement (from the French décoller “to detach from”) will suddenly cause an extravagant range of surface-level detachments: bridges, dams, pipelines, water networks, piers from shores, bolts from welds, walls from foundations, roofs from walls, towers from anchors, rocks from mountainsides — undoing myriad intimacies on which we depend. The prospect of such detachment is so troubling that we often tend toward décollement of awareness from thinking, detachment of knowledge and action, desperately separating now from then.

Gaza’s non-flow

Today Jordan will host an intergovernmental consultation on “urgent humanitarian response for Gaza“.  According to Jordan’s Ministry of Foreign Affairs the Dead Sea conference will “identify ways to strengthen the international community’s response to the humanitarian catastrophe, outline effective standardized measures and procedures, identify the operational and logistical needs and the types of support necessary in that regard, discuss preparations for early recovery, and seek commitments for a collective, coordinated response to address the humanitarian situation in Gaza…  to reach a consensus on practical measures to meet the immediate needs on the ground.”

The needs are profound.  On June 4 Reuters reported:

The Rafah crossing from Egypt has been shut for weeks, with a long line of trucks building up and some food rotting in the sun. A mere trickle of aid supplies are entering via the other southern crossing of Kerem Shalom and the World Food Programme has noted a deterioration in hunger in the centre and south… Data from the United Nations Palestinian refugee agency showed that 10.4% of 17,757 children screened between January-May were found to have some form of malnutrition, with 1.7% suffering from severe acute malnutrition. Some bakeries have had to close due to hostilities and lack of cooking gas, with only 11 out of 17 previously operating now functional.

According to the UN Office for Coordination of Humanitarian Affairs:

Fuel shortages continue to severely disrupt people’s access to water and the operation of vital sanitation facilities in the Gaza Strip, compounding the impact of prolonged electricity cuts and damage to infrastructure. According to the Water, Sanitation and Hygiene (WASH) Cluster, between 26 May and 2 June, only 20 percent of fuel needed per week to ensure the operation of vital water and wastewater facilities was received (94,000 out of 490,000 litres required). Fuel deliveries were also suspended between 31 May and 6 June due to safety concerns and the shifting of logistical support services from Rafah to Khan Younis amid intensified military operations…. In addition, the lack of sufficient fuel limits water distribution through the functional networks, which, coupled with the lack of generators and spare parts, continues to impact the availability of potable water. As of 2 June, daily water production in the Gaza Strip stood at around 95,000 cubic metres per day, representing only 26 per cent of water produced prior to October 2023.

There is continuing contention regarding how many trucks are discharged into Gaza and how many trucks are received into Gaza.  On June 10 a total of 167 trucks were reported as being discharged into Gaza while zero were reported as being received.   In either case, far fewer than the well-established 500 truck per day minimum to meet essential population needs.  April truck volumes were barely one-third this daily minimum, but the best month since the war started.  May volumes were barely one-third April’s volumes. 

Saturday the floating pier restarted operations (more and more). But yesterday Axios reported, “The UN World Food Program (WFP) has temporarily halted operations from a pier in central Gaza after two of the aid group’s warehouses in the enclave were hit in recent fighting, the agency’s director said.”

Today’s conference in Jordan will feature three working groups to focus on 1) providing humanitarian aid to Gaza, 2)overcoming challenges facing the delivery of humanitarian aid, 3) and protecting civilians (more and more). Issue 1 has not been a problem (but could become one if reasonable flows are able to resume). Large volumes of supplies are immediately available. Issues 2 and 3 are tightly connected. “Last mile” distribution to demand is especially difficult with the grid gone, water systems destroyed, transportation networks buried in debris, hundreds-of-thousands of displaced persons constantly relocating in a perpetual search for protection, and active military operations.

Israel has not been invited to participate in the conference. The meetings will be held about 22 miles east of Jerusalem, near where the Jordan River flows into the Dead Sea — a sadly appropriate metaphor for the current status of supply chains serving Gaza.


I suspect this will be my last Gaza-related post for a considerable period. From November through March I provided very modest voluntary assistance to a loose alliance of not-for-profit groups focused on Gaza supply chain solutions. Because of this role I had a potentially value-added contextual angle to offer readers. Since the end of March this role has gradually diminished. As regular readers know (too well?) I came to perceive that demands for a ceasefire had become a strategic bottleneck. Pushing for a ceasefire was and is entirely appropriate. Humanitarian aid would flow much better with a ceasefire. But as it became clear that a ceasefire would not be delivered just-in-time, I pushed non-traditional means for fulfilling demand. During March some incremental progress was made on these alternatives. But, the April 1 deaths of World Central Kitchen staff reversed just about all that progress (here and here). My attempt to push alternatives was perceived by some as complicit in these deaths. With deep regret, I do not entirely disagree. In any case, since April I have been offered fewer opportunities to advocate for potential high-risk/high-reward supply chain resilience strategies. As a result, I am reduced to reading/hearing/watching the news, not much value-add in that. At some point there will be the opportunity for an After-Action during a sustained ceasefire or even the end of hostilities. Such would be an especially welcome hot wash.

Hurricanes: Threats, Vulnerabilities, Consequences


The National Oceanic and Atmospheric Administration forecasts, “a range of 17 to 25 total named storms (winds of 39 mph or higher). Of those, 8 to 13 are forecast to become hurricanes (winds of 74 mph or higher), including 4 to 7 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher). Forecasters have a 70% confidence in these ranges. The upcoming Atlantic hurricane season is expected to have above-normal activity due to a confluence of factors, including near-record warm ocean temperatures in the Atlantic Ocean, development of La Nina conditions in the Pacific, reduced Atlantic trade winds and less wind shear, all of which tend to favor tropical storm formation.” A less active season has been forecast for the Central and Eastern Pacific.

More Atlantic hurricanes overall, more hurricanes at Category 3 and above, and an extended season increase the chances for landfalls with significant impacts on people. The risk of serious population impacts is also increasing as hurricanes are more likely to demonstrate rapid intensification. According to a 2023 report in Nature:

Quickly intensifying tropical cyclones (TCs) are exceptionally hazardous for Atlantic coastlines… Mean maximum TC intensification rates are up to 28.7% greater in a modern era (2001–2020) compared to a historical era (1971–1990). In the modern era, it is about as likely for TCs to intensify by at least 50 kts in 24 h, and more likely for TCs to intensify by at least 20 kts within 24 h than it was for TCs to intensify by these amounts in 36 h in the historical era. Finally, the number of TCs that intensify from a Category 1 hurricane (or weaker) into a major hurricane within 36 h has more than doubled in the modern era relative to the historical era. (More and more.)

Rapid intensification — especially near-shore intensification — can subvert evacuation plans and timing, potentially leaving more people in harms way. Many of the atmospheric factors that result in rapid intensification can also challenge the accuracy of forecast tracks (here and here and here). Threat assessment mostly tries to measure what will be hit when and how hard. Hurricane targets and intensities can be reasonably anticipated, but are tough to precisely predict.

Secondary effects of hurricane impacts — such as storm surge, flooding, and grid outages — interact with network vulnerabilities (see below) to amplify the hurricane threat. The NERC summer reliability assessment for the 2024 grid is a bit more robust, potentially resilient, than in recent years (more). But this summer’s heat forecast is also more robust. National Public Radio reports, “2023 was the hottest year on record for many places in the U.S., and by far the hottest year for the planet as a whole… It’s already been so hot that 2024 is guaranteed to be one of the five hottest years ever recorded.” One nightmare scenario is a hurricane-related grid loss followed by extended extreme heat descending on hard-hit survivors.


Despite recurring and increasing threats, the population growth of coastal communities has accelerated. Over 60 million people reside in Atlantic and Gulf Coast areas with hurricane histories. In recent years the population growth rate of these areas has often been more than ten percent higher than the national average (here).

Fixed assets are more vulnerable than mobile assets. Surface freight capacity is structurally and spatially diversified. Many freight assets — both drivers and trucks — are proactively relocated out of the way of hurricanes. Concentrated fuel capacity, such as refineries, pipelines, ports, and fuel racks stay put (see map below and here). As long as hurricanes stay away, fixed fuel capacity is okay. But if hurricanes hit fuel capacity concentrations hard enough to cause time-extended disruption or serious destruction, the network consequences can quickly cascade. Surface freight capacity depends on refueling. No fuel, no freight. In case of hurricane related grid loss many key supply chain components — such as public water systems and grocery distribution centers — depend on diesel-fueled emergency generators. No fuel = no emergency power = suddenly diminished flows of water and food = thirst and hunger.

This morning FreightWaves gives us a meaningful snapshot of current national freight capacity (see chart below):

Outbound tender volumes (OTVI) surged over 7.1% from May 26 to June 3, marking one of the strongest demand increases to start the summer shipping season since 2019. The spike in tender volume appears to have helped sustain spot rates, excluding estimated fuel costs (NTIL) at relatively elevated levels beyond the Memorial Day holiday period. Volumes tend to jump this time of the year, increasing between 0.3% and 6.8% over the past four years, but they jumped 8.8% in 2019, a time of a historically down market.  So while the tender volume jump was the largest in several years, it has not pushed rates higher proportionally — it has sustained the level. The reason for this lack of rate jump is largely that there is still enough capacity to handle it.

During the second half of 2023 US trucking capacity experienced a considerable contraction (here and here) adjusting to post-pandemic demand patterns. Still, freight capacity for the 2024 hurricane season is roughly the same as last year. In terms of truck transportation employee counts May 2024 is a bit higher than May 2019 or any prior May in the census records (more and more). As of the beginning of hurricane season, diesel fuel stocks are higher than the last two years. East Coast (PADD-1) diesel inventories are at least one-fifth higher than May 2022 or 2023. Gulf Coast (PADD-3) diesel stocks are also within or slightly above seasonal averages.


Risk is a function of what and how many are hit when (and again) and how hard. In the last week of September 2022 Hurricane Ian presented a serious threat to the Gulf Coast of Florida. Even one day before landfall Tampa Bay seemed to be the target. But instead, the high end CAT4 storm came ashore just north of Fort Myers (about 100 miles south of Tampa). Death and destruction was horrible. But this late right hand swerve saved the Tampa port, racks, and pipelines to fuel the response for Fort Myers, Cape Coral, and nearby. The cluster of food distribution centers between Tampa and Orlando (and near Miami) continued to direct flow into Southwest Florida. Because the midstream capacity concentrations were not hit, flow continued downstream to concentrations of demand. The harder the hit upstream the more disruption (or worse) downstream. Two years later I start this hurricane season especially attentive to threats that may unfold to food, fuel, and freight capacities concentrated near Tampa, Miami, Jacksonville/San Juan, and then near New Orleans, and then between Beaumont and Houston. If these capacity concentrations survive, consequences can be mitigated. The harder these critical nodes are hit, the more risk is amplified.