“The political message is greater than the economic hit,” said Chiao Chun, a former trade negotiator for the Taiwanese government.
Even though about 90 percent of Taiwan’s imported gravel and sand comes from China, most of that is manufactured. China accounted for only about 11 percent of Taiwan’s natural sand imports in the first half of this year, according to the Bureau of Mines.
The two types of Taiwanese fish exports that China restricted last week — chilled white striped hairtail and frozen horse mackerel — are collectively worth about $22 million, less than half the value of the Taiwanese grouper trade that was banned earlier this year. They are also less dependent on the Chinese market.
As for Taiwan’s half-a-billion-dollar citrus industry, its shipments to China account for only 1.1 percent of the island’s total agricultural exports, according to Taiwan’s Agriculture Council. A popular theory is that Beijing singled out citrus farmers because most orchards are in southern Taiwan, a stronghold for the governing political party, the Democratic Progressive Party, a longtime target of Beijing’s anger.
Future bans may become more targeted to punish industries in counties that are D.P.P. strongholds, said Thomas J. Shattuck, an expert on Taiwan at the University of Pennsylvania’s Perry World House. There may also be less retaliation against counties run by the Kuomintang opposition party “in an attempt to put a finger on the scale for Taiwan’s local, and even national, elections,” he added.
increasingly indispensable node in the global supply chains for smartphones, cars and other keystones of modern life. One producer, the Taiwan Semiconductor Manufacturing Company, makes roughly 90 percent of the world’s most advanced semiconductors, and sells them to both China and the West.
simulated a blockade of Taiwan.
Even though some of the exercises took place in the Taiwan Strait, a key artery for international shipping, they did not disrupt access to ports in Taiwan or southern China, said Tan Hua Joo, an analyst at Linerlytica, a company in Singapore that tracks data on the container shipping industry. He added that port congestion would build only if the strait was completely blocked, port access was restricted or port operations were hampered by a labor or equipment shortage.
“None of these are happening at the moment,” he said.
Vessels that chose to avoid the Taiwan Strait last week because of the Chinese military’s “chest beating” activities would have faced a 12- to 18-hour delay, an inconvenience that would generally be considered manageable, said Niels Rasmussen, the chief shipping analyst at Bimco, an international shipping association.
If Beijing were to escalate tensions in the future, it would indicate that it was willing to put at risk China’s own economy as well as its trade and relations with Japan, South Korea, Europe and the United States, Mr. Rasmussen said by phone from his office near Copenhagen.
“That’s just difficult to accept that they would take that decision,” he added. “But then again, I didn’t expect Russia to invade Ukraine.”
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Stopping at the edge of a vast field of barley on his farm in Prundu, 30 miles outside Romania’s capital city of Bucharest, Catalin Corbea pinched off a spiky flowered head from a stalk, rolled it between his hands, and then popped a seed in his mouth and bit down.
“Another 10 days to two weeks,” he said, explaining how much time was needed before the crop was ready for harvest.
Mr. Corbea, a farmer for nearly three decades, has rarely been through a season like this one. The Russians’ bloody creep into Ukraine, a breadbasket for the world, has caused an upheaval in global grain markets. Coastal blockades have trapped millions of tons of wheat and corn inside Ukraine. With famine stalking Africa, the Middle East and elsewhere in Asia, a frenetic scramble for new suppliers and alternate shipping routes is underway.
barge that had sunk in World War II.
Rain was not as plentiful in Prundu as Mr. Corbea would have liked it to be, but the timing was opportune when it did come. He bent down and picked up a fistful of dark, moist soil and caressed it. “This is perfect land,” he said.
67.5 million tons of cargo, more than a third of it grain. Now, with Odesa’s port closed off, some Ukrainian exports are making their way through Constanta’s complex.
Railway cars, stamped “Cereale” on their sides, spilled Ukrainian corn onto underground conveyor belts, sending up billowing dust clouds last week at the terminal operated by the American food giant Cargill. At a quay operated by COFCO, the largest food and agricultural processor in China, grain was being loaded onto a cargo ship from one of the enormous silos that lined its docks. At COFCO’s entry gate, trucks that displayed Ukraine’s distinctive blue-and-yellow-striped flag on their license plates waited for their cargoes of grain to be inspected before unloading.
During a visit to Kyiv last week, Romania’s president, Klaus Iohannis, said that since the beginning of the invasion more than a million tons of Ukrainian grain had passed through Constanta to locations around the world.
But logistical problems prevent more grain from making the journey. Ukraine’s rail gauges are wider than those elsewhere in Europe. Shipments have to be transferred at the border to Romanian trains, or each railway car has to be lifted off a Ukrainian undercarriage and wheels to one that can be used on Romanian tracks.
Truck traffic in Ukraine has been slowed by backups at border crossings — sometimes lasting days — along with gas shortages and damaged roadways. Russia has targeted export routes, according to Britain’s defense ministry.
Romania has its own transit issues. High-speed rail is rare, and the country lacks an extensive highway system. Constanta and the surrounding infrastructure, too, suffer from decades of underinvestment.
Over the past couple of months, the Romanian government has plowed money into clearing hundreds of rusted wagons from rail lines and refurbishing tracks that were abandoned when the Communist regime fell in 1989.
Still, trucks entering and exiting the port from the highway must share a single-lane roadway. An attendant mans the gate, which has to be lifted for each vehicle.
When the bulk of the Romanian harvest begins to arrive at the terminals in the next couple of weeks, the congestion will get significantly worse. Each day, 3,000 to 5,000 trucks will arrive, causing backups for miles on the highway that leads into Constanta, said Cristian Taranu, general manager at the terminals run by the Romanian port operator Umex.
Mr. Mircea’s farm is less than a 30-minute drive from Constanta. But “during the busiest periods, my trucks are waiting two, three days” just to enter the port’s complex so they can unload, he said through a translator.
That is one reason he is less sanguine than Mr. Corbea is about Romania’s ability to take advantage of farming and export opportunities.
“Port Constanta is not prepared for such an opportunity,” Mr. Mircea said. “They don’t have the infrastructure.”
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In a world contending with no end of economic troubles, a fresh source of concern now looms: the prospect of a confrontation between union dockworkers and their employers at some of the most critical ports on earth.
The potential conflict centers on negotiations over a new contract for more than 22,000 union workers employed at 29 ports along the West Coast of the United States. Nearly three-fourths work at the twin ports of Long Beach and Los Angeles, the primary gateway for goods shipped to the United States from Asia, and a locus of problems afflicting the global supply chain.
The contract for the International Longshore and Warehouse Union expires at the end of June. For those whose livelihoods are tied to ports — truckers, logistics companies, retailers — July 1 marks the beginning of a period of grave uncertainty.
A labor impasse could worsen the floating traffic jams that have kept dozens of ships waiting in the Pacific before they can pull up to the docks. That could aggravate shortages and send already high prices for consumer goods soaring.
impacts of Russia’s invasion of Ukraine and as China imposes new Covid restrictions on industry.
Understand the Supply Chain Crisis
The dockworkers have moved unprecedented volumes of cargo during the pandemic, even as at least two dozen succumbed to Covid-19, according to the union. They are aware that many of the shipping terminals in Southern California are controlled by global carriers that have been racking up record profits while sharply increasing cargo rates — a fact cited by President Biden in his recent State of the Union address as he promised a “crackdown” to alleviate inflation.
With ports now capturing attention in Washington, some within the shipping industry express confidence that negotiations will yield a deal absent a disruptive slowdown or strike.
“There’s too much at stake for both sides,” Mario Cordero, executive director of the Port of Long Beach, said during a recent interview in his office overlooking towering cranes and stacks of containers. “There’s an incentive because the nation is watching.”
“If they don’t come to a compromise, then freight will get permanently diverted to the East Coast,” Mr. Matinifar said.
Animating contract talks is the popular notion that the longshoremen are a privileged class within the supply chain, using the union to protect their ranks — a source of resentment among other workers.
“They treat us like we’re nobodies,” said Mr. Chilton, the truck driver. “The way they talk to us, they’re very rude.”
traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
Union officials declined to discuss their objectives for a new contract.
Mr. McKenna, the maritime association chief executive, said the union had yet to outline demands while declining to engage in discussions before May.
He expected that the union would resist efforts to expand automation at the ports, a traditional point of contention. He said greater automation — such as adding self-driving vehicles and robotics to move cargo — was unavoidable in ports in dense urban places like Los Angeles. There, land is tight, so growth must come from increasing efficiency, rather than physically expanding.
The last time the I.L.W.U. contract expired, West Coast ports suffered months of debilitating disruptions — the source of enduring recriminations.
Terminal operators accused dockworkers of slowing operations to generate pressure for a deal. The union countered that employers were the ones creating problems.
Some dockworkers question whether terminal owners are sincerely seeking to speed up cargo handling, given that shipping rates have soared amid chaos at the ports.
Jaime Hipsher, 45, drives a so-called utility tractor rig — equipment used to move containers — at a pair of Southern California shipping terminals. One is operated by A.P. Moller-Maersk, a Danish conglomerate whose profits nearly tripled last year, reaching $24 billion.
She said maintenance of equipment was spotty, producing frequent breakdowns, while the terminals were often understaffed — two problems that could be fixed with more spending.
A Maersk spokesman, Tom Boyd, rejected that characterization.
“Freight rates have been impacted by the global Covid-19 recovery and the demand outpacing supply,” he said in an emailed statement. “Ships at anchor are not productive, nor are they earning revenue against a backdrop of large fixed costs.”
That Ms. Hipsher spends her nights on the docks represents an unexpected turn in her life.
Her father was a longshoreman. He urged her to attend college and do something that involved wearing business attire, in contrast to how he spent his working hours — climbing a skinny ladder to the top of ships and loading coal onto vessels.
“He would come home after work and he would have coal dust coming out of his ears, out of his nose,” Ms. Hipsher recalled. “His hands would just be completely black.”
But in 2004, when she was working as a hairstylist, her brother — also a longshoreman — suggested that she enter a lottery for the right to become a casual dockworker.
The ports had changed, her brother said. Growing numbers of women were employed.
Eighteen years later, Ms. Hipsher has gained the security of seniority, health benefits and a pension.
As contract talks approach, she pushes back against the notion that the union poses a threat to the global economy.
“You’re complaining about my wages, thinking that my wages are the source of inflation, and we don’t deserve it,” she said. “Well, look at the billions that the owners are making.”
Emily Steel contributed reporting.
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WASHINGTON — Companies are bracing for another round of potentially debilitating supply chain disruptions as China, home to about a third of global manufacturing, imposes sweeping lockdowns in an attempt to keep the Omicron variant at bay.
The measures have already confined tens of millions of people to their homes in several Chinese cities and contributed to a suspension of connecting flights through Hong Kong from much of the world for the next month. At least 20 million people, or about 1.5 percent of China’s population, are in lockdown, mostly in the city of Xi’an in western China and in Henan Province in north-central China.
The country’s zero-tolerance policy has manufacturers — already on edge from spending the past two years dealing with crippling supply chain woes — worried about another round of shutdowns at Chinese factories and ports. Additional disruptions to the global supply chain would come at a particularly fraught moment for companies, which are struggling with rising prices for raw materials and shipping along with extended delivery times and worker shortages.
China used lockdowns, contact tracing and quarantines to halt the spread of the coronavirus nearly two years ago after its initial emergence in Wuhan. These tactics have been highly effective, but the extreme transmissibility of the Omicron variant poses the biggest test yet of China’s system.
Volkswagen and Toyota announced last week that they would temporarily suspend operations in Tianjin because of lockdowns.
Analysts warn that many industries could face disruptions in the flow of goods as China tries to stamp out any coronavirus infections ahead of the Winter Olympics, which will be held in Beijing next month. On Saturday, Beijing officials reported the city’s first case of the Omicron variant, prompting the authorities to lock down the infected person’s residential compound and workplace.
If extensive lockdowns become more widespread in China, their effects on supply chains could be felt across the United States. Major new disruptions could depress consumer confidence and exacerbate inflation, which is already at a 40-year high, posing challenges for the Biden administration and the Federal Reserve.
“Will the Chinese be able to control it or not I think is a really important question,” said Craig Allen, the president of the U.S.-China Business Council. “If they’re going to have to begin closing down port cities, you’re going to have additional supply chain disruptions.”
thrown the global delivery system out of whack. Transportation costs have skyrocketed, and ports and warehouses have experienced pileups of products waiting to be shipped or driven elsewhere while other parts of the supply chain are stymied by shortages.
Understand the Supply Chain Crisis
For the 2021 holiday season, customers largely circumvented those challenges by ordering early. High shipping prices began to ease after the holiday rush, and some analysts speculated that next month’s Lunar New Year, when many Chinese factories will idle, might be a moment for ports, warehouses and trucking companies to catch up on moving backlogged orders and allow global supply chains to return to normal.
But the spread of the Omicron variant is foiling hopes for a fast recovery, highlighting not only how much America depends on Chinese goods, but also how fragile the supply chain remains within the United States.
American trucking companies and warehouses, already short of workers, are losing more of their employees to sickness and quarantines. Weather disruptions are leading to empty shelves in American supermarkets. Delivery times for products shipped from Chinese factories to the West Coast of the United States are as long as ever — stretching to a record high of 113 days in early January, according to Flexport, a logistics firm. That was up from fewer than 50 days at the beginning of 2019.
The Biden administration has undertaken a series of moves to try to alleviate bottlenecks both in the United States and abroad, including devoting $17 billion to improving American ports as part of the new infrastructure law. Major U.S. ports are handling more cargo than ever before and working through their backlog of containers — in part because ports have threatened additional fees for containers that sit too long in their yards.
Yet those greater efficiencies have been undercut by continuing problems at other stages of the supply chain, including a shortage of truckers and warehouse workers to move the goods to their final destination. A push to make the Port of Los Angeles operate 24/7, which was the centerpiece of the Biden administration’s efforts to address supply chain issues this fall, has still seen few trucks showing up for overnight pickups, according to port officials, and cargo ships are still waiting for weeks outside West Coast ports for their turn for a berth to dock in.
work slowdowns and shipping delays.
“If you have four closed doors to get through and one of them opens up, that doesn’t necessarily mean quick passage,” said Phil Levy, the chief economist at Flexport. “We should not delude ourselves that if our ports become 10 percent more efficient, we’ve solved the whole problem.”
Chris Netram, the managing vice president for tax and domestic economic policy at the National Association of Manufacturers, which represents 14,000 companies, said that American businesses had seen a succession of supply chain problems since the beginning of the pandemic.
“Right now, we are at the tail end of one flavor of those challenges, the port snarls,” he said, adding that Chinese lockdowns could be “the next flavor of this.”
Manufacturers are watching carefully to see whether more factories and ports in China might be forced to shutter if Omicron spreads in the coming weeks.
Neither Xi’an nor Henan Province, the site of China’s most expansive lockdowns, has an economy heavily reliant on exports, although Xi’an does produce some semiconductors, including for Samsung and Micron Technology, as well as commercial aircraft components.
How the Supply Chain Crisis Unfolded
Card 1 of 9
The pandemic sparked the problem. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis can be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
Handel Jones, the chief executive of International Business Strategies, a chip consultancy, said the impact on Samsung and Micron would be limited, but he expressed worries about the potential for broader lockdowns in cities like Tianjin or Shanghai.
stay away from any vehicle collisions involving Olympic participants, to avoid infection.
Last year, terminal shutdowns in and around Ningbo and Shenzhen, respectively the world’s third- and fourth-largest container ports by volume, led to congestion and delays, and caused some ships to reroute to other ports.
But if the coronavirus does manage to enter a big port again, the effects could quickly be felt in the United States. “If one of the big container terminals goes into lockdown,” Mr. Huxley said, “it doesn’t take long for a big backlog to develop.”
Airfreight could also become more expensive and harder to obtain in the coming weeks as China has canceled dozens of flights to clamp down on another potential vector of infection. That could especially affect consumer electronics companies, which tend to ship high-value goods by air.
For American companies, the prospect of further supply chain troubles means there may be another scramble to secure Chinese-made products ahead of potential closures.
Lisa Williams, the chief executive of the World of EPI, a company that makes multicultural dolls, said the supply chain issues were putting pressure on companies like hers to get products on the shelves faster than ever, with retailers asking for goods for the fall to be shipped as early as May.
Dr. Williams, who was an academic specializing in logistics before she started her company, said an increase in the price of petroleum and other raw materials had pushed up the cost of the materials her company uses to make dolls, including plastic accessories, fibers for hair, fabrics for clothing and plastic for the dolls themselves. Her company has turned to far more expensive airfreight to get some shipments to the United States faster, further cutting into the firm’s margins.
“Everything is being moved up because everyone is anticipating the delay with supply chains,” she said. “So that compresses everything. It compresses the creativity, it compresses the amount of time we have to think through innovations we want to do.”
Ana Swanson reported from Washington, and Keith Bradsher from Beijing.
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“We are not going to assemble iPhones in the U.S.,” Mr. Shih said.
Some experts believe the problems will persist. “Our findings indicate the disruption could be for up to three years,” said Manish Sharma, group chief executive of operations services at the consulting firm Accenture.
Even Two-One-Two New York, a strictly domestic manufacturer of apparel with a plant on Long Island, is being forced to do things differently, said Marisa Fumei-South, the company’s owner and president.
The company has accumulated larger stocks of yarn and other raw materials in response to rising prices and higher shipping costs. “We’re sitting with a lot of inventory,” Ms. Fumei-South said. “We’re waiting to see how this evolves.”
That kind of behavior feeds on itself, Mr. Shih said. As companies buy up supplies to get ahead of rising prices, it contributes to the inflationary dynamic. “People are ordering more than they need, and that’s aggravating shortages,” he said.
American Giant, a maker of hoodies, T-shirts and other clothing, has sidestepped the worst of the supply chain problems because it makes its products in North Carolina and other domestic locations, said its founder and president, Bayard Winthrop.
The company’s apparel, sold through its own stores and online, falls between products sold by retailers like Old Navy or Lands’ End and more expensive brands. A full-zip sweater for men sells for $128, while a woman’s slub turtleneck goes for $70.
But American Giant can’t escape higher labor costs and surging cotton prices, Mr. Winthrop said. While he expects cotton prices to eventually come down, he’s not so sure how long it will take.
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SAVANNAH, Ga. — Like toy blocks hurled from the heavens, nearly 80,000 shipping containers are stacked in various configurations at the Port of Savannah — 50 percent more than usual.
The steel boxes are waiting for ships to carry them to their final destination, or for trucks to haul them to warehouses that are themselves stuffed to the rafters. Some 700 containers have been left at the port, on the banks of the Savannah River, by their owners for a month or more.
“They’re not coming to get their freight,” complained Griff Lynch, the executive director of the Georgia Ports Authority. “We’ve never had the yard as full as this.”
As he speaks, another vessel glides silently toward an open berth — the 1,207-foot-long Yang Ming Witness, its decks jammed with containers full of clothing, shoes, electronics and other stuff made in factories in Asia. Towering cranes soon pluck the thousands of boxes off the ship — more cargo that must be stashed somewhere.
turmoil in the shipping industry and the broader crisis in supply chains is showing no signs of relenting. It stands as a gnawing source of worry throughout the global economy, challenging once-hopeful assumptions of a vigorous return to growth as vaccines limit the spread of the pandemic.
Germany’s industrial fortunes are sagging, why inflation has become a cause for concern among central bankers, and why American manufacturers are now waiting a record 92 days on average to assemble the parts and raw materials they need to make their goods, according to the Institute of Supply Management.
On the surface, the upheaval appears to be a series of intertwined product shortages. Because shipping containers are in short supply in China, factories that depend on Chinese-made parts and chemicals in the rest of the world have had to limit production.
But the situation at the port of Savannah attests to a more complicated and insidious series of overlapping problems. It is not merely that goods are scarce. It is that products are stuck in the wrong places, and separated from where they are supposed to be by stubborn and constantly shifting barriers.
The shortage of finished goods at retailers represents the flip side of the containers stacked on ships marooned at sea and massed on the riverbanks. The pileup in warehouses is itself a reflection of shortages of truck drivers needed to carry goods to their next destinations.
Vietnam, a hub for the apparel industry, was locked down for several months in the face of a harrowing outbreak of Covid. Diminished cargo leaving Asia should provide respite to clogged ports in the United States, but Mr. Lynch dismisses that line.
“Six or seven weeks later, the ships come in all at once,” Mr. Lynch said. “That doesn’t help.”
Early this year, as shipping prices spiked and containers became scarce, the trouble was widely viewed as the momentary result of pandemic lockdowns. With schools and offices shut, Americans were stocking up on home office gear and equipment for basement gyms, drawing heavily on factories in Asia. Once life reopened, global shipping was supposed to return to normal.
But half a year later, the congestion is worse, with nearly 13 percent of the world’s cargo shipping capacity tied up by delays, according to data compiled by Sea-Intelligence, an industry research firm in Denmark.
Many businesses now assume that the pandemic has fundamentally altered commercial life in permanent ways. Those who might never have shopped for groceries or clothing online — especially older people — have gotten a taste of the convenience, forced to adjust to a lethal virus. Many are likely to retain the habit, maintaining pressure on the supply chain.
“Before the pandemic, could we have imagined mom and dad pointing and clicking to buy a piece of furniture?” said Ruel Joyner, owner of 24E Design Co., a boutique furniture outlet that occupies a brick storefront in Savannah’s graceful historic district. His online sales have tripled over the past year.
On top of those changes in behavior, the supply chain disruption has imposed new frictions.
Mr. Joyner, 46, designs his furniture in Savannah while relying on factories from China and India to manufacture many of his wares. The upheaval on the seas has slowed deliveries, limiting his sales.
He pointed to a brown leather recliner made for him in Dallas. The factory is struggling to secure the reclining mechanism from its supplier in China.
“Where we were getting stuff in 30 days, they are now telling us six months,” Mr. Joyner said. Customers are calling to complain.
His experience also underscores how the shortages and delays have become a source of concern about fair competition. Giant retailers like Target and Home Depot have responded by stockpiling goods in warehouses and, in some cases, chartering their own ships. These options are not available to the average small business.
Bottlenecks have a way of causing more bottlenecks. As many companies have ordered extra and earlier, especially as they prepare for the all-consuming holiday season, warehouses have become jammed. So containers have piled up at the Port of Savannah.
Mr. Lynch’s team — normally focused on its own facilities — has devoted time to scouring unused warehouse spaces inland, seeking to provide customers with alternative channels for their cargo.
Recently, a major retailer completely filled its 3 million square feet of local warehouse space. With its containers piling up in the yard, port staff worked to ship the cargo by rail to Charlotte, N.C., where the retailer had more space.
Such creativity may provide a modicum of relief, but the demands on the port are only intensifying.
On a muggy afternoon in late September, Christmas suddenly felt close at hand. The containers stacked on the riverbanks were surely full of holiday decorations, baking sheets, gifts and other material for the greatest wave of consumption on earth.
Will they get to stores in time?
“That’s the question everyone is asking,” Mr. Lynch said. “I think that’s a very tough question.”
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A constellation of 5,400 offshore wind turbines meet a growing portion of Europe’s energy needs. The United States has exactly seven.
With more than 90,000 miles of coastline, the country has plenty of places to plunk down turbines. But legal, environmental and economic obstacles and even vanity have stood in the way.
President Biden wants to catch up fast — in fact, his targets for reducing greenhouse gas emissions depend on that happening. Yet problems abound, including a shortage of boats big enough to haul the huge equipment to sea, fishermen worried about their livelihoods and wealthy people who fear that the turbines will mar the pristine views from their waterfront mansions. There’s even a century-old, politically fraught federal law, known as the Jones Act, that blocks wind farm developers from using American ports to launch foreign construction vessels.
Offshore turbines are useful because the wind tends to blow stronger and more steadily at sea than onshore. The turbines can be placed far enough out that they aren’t visible from land but still close enough to cities and suburbs that they do not require hundreds of miles of expensive transmission lines.
approved a project near Martha’s Vineyard that languished during the Trump administration and in May announced support for large wind farms off California’s coast. The $2 trillion infrastructure plan that Mr. Biden proposed in March would also increase incentives for renewable energy.
The cost of offshore wind turbines has fallen about 80 percent over the last two decades, to as low as $50 a megawatt-hour. While more expensive per unit of energy than solar and wind farms on land, offshore turbines often make economic sense because of lower transmission costs.
“Solar in the East is a little bit more challenging than in the desert West,” said Robert M. Blue, the chairman and chief executive of Dominion Energy, a big utility company that is working on a wind farm with nearly 200 turbines off the coast of Virginia. “We’ve set a net-zero goal for our company by 2050. This project is essential to hitting those goals.”
rely on European components, suppliers and ships for years.
Installing giant offshore wind turbines — the largest one, made by General Electric, is 853 feet high — is difficult work. Ships with cranes that can lift more than a thousand tons haul large components out to sea. At their destinations, legs are lowered into the water to raise the ships and make them stationary while they work. Only a few ships can handle the biggest components, and that’s a big problem for the United States.
A 1,600-mile round trip to Canada.
Government Accountability Office report published in December. That is far too small for the giant components that Mr. Eley’s team was working with.
So Dominion hired three European ships and operated them out of the Port of Halifax in Nova Scotia. One of them, the Vole au Vent from Luxembourg, is 459 feet (140 meters) long and can lift 1,654 tons.
Mr. Eley’s crew waited weeks at a time for the European ships to travel more than 800 miles each way to port. The installations took a year. In Europe, it would have been completed in a few weeks. “It was definitely a challenge,” he said.
The U.S. shipping industry has not invested in the vessels needed to carry large wind equipment because there have been so few projects here. The first five offshore turbines were installed in 2016 near Block Island, R.I. Dominion’s two turbines were installed last year.
Had the Jones Act not existed — it was enacted after World War I to ensure that the country had ships and crews to mobilize during war and emergencies — Dominion could have run European vessels out of Virginia’s ports. The law is sacrosanct in Congress, and labor unions and other supporters argue that repealing it would eliminate thousands of jobs at shipyards and on boats, leaving the United States reliant on foreign companies.
Demand for large ships could grow significantly over the next decade because the United States, Europe and China have ambitious offshore wind goals. Just eight ships in the world can transport the largest turbine parts, according to Dominion.
200 more turbines by 2026. Dominion spent $300 million on its first two but hopes the others will cost $40 million each.
Fishermen fear for their livelihoods.
For the last 24 years, Tommy Eskridge, a resident of Tangier Island, has made a living catching conchs and crabs off the Virginia coast.
One area he works is where Dominion plans to place its turbines. Federal regulators have adjusted spacing between turbines to one nautical mile to create wider lanes for fishing and other boats, but Mr. Eskridge, 54, worries that the turbines could hurt his catch.
The area has yielded up to 7,000 pounds of conchs a day, though Mr. Eskridge said a typical day produced about half that amount. A pound can fetch $2 to $3, he said.
Mr. Eskridge said the company and regulators had not done enough to show that installing turbines would not hurt his catch. “We just don’t know what it’s going to do.”
who died in 2009, and William I. Koch, an industrialist.
Neither wanted the turbines marring the views of the coast from their vacation compounds. They also argued that the project would obstruct 16 historical sites, disrupt fishermen and clog up waterways used by humpback, pilot and other whales.
the developer of Cape Wind gave up in 2017. But well before that happened, Cape Wind’s troubles terrified energy executives who were considering offshore wind.
Projects up and down the East Coast are mired in similar fights. Residents of the Hamptons, the wealthy enclave, opposed two wind development areas, and the federal government shelved the project. On the New Jersey shore, some homeowners and businesses are opposing offshore wind because they fear it will raise their electricity rates, disrupt whales and hurt the area’s fluke fishery.
Energy executives want the Biden administration to mediate such conflicts and speed up permit approval.
“It’s been artificially, incrementally slow because of some inefficiencies on the federal permitting side,” said David Hardy, chief executive of Orsted North America.
Renewable-energy supporters said they were hopeful because the country had added lots of wind turbines on land — 66,000 in 41 states. They supplied more than 8 percent of the country’s electricity last year.
Ms. Lefton, the regulator who oversees leasing of federal waters, said future offshore projects would move more quickly because more people appreciated the dangers of climate change.
“We have a climate crisis in front of us,” she said. “We need to transition to clean energy. I think that will be a big motivator.”
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In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them.
Over the last half-century, this approach has captivated global business in industries far beyond autos. From fashion to food processing to pharmaceuticals, companies have embraced Just In Time to stay nimble, allowing them to adapt to changing market demands, while cutting costs.
But the tumultuous events of the past year have challenged the merits of paring inventories, while reinvigorating concerns that some industries have gone too far, leaving them vulnerable to disruption. As the pandemic has hampered factory operations and sown chaos in global shipping, many economies around the world have been bedeviled by shortages of a vast range of goods — from electronics to lumber to clothing.
In a time of extraordinary upheaval in the global economy, Just In Time is running late.
“It’s sort of like supply chain run amok,” said Willy C. Shih, an international trade expert at Harvard Business School. “In a race to get to the lowest cost, I have concentrated my risk. We are at the logical conclusion of all that.”
shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.
But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.
a shortage of lumber that has stymied home building in the United States.
Suez Canal this year, closing the primary channel linking Europe and Asia.
“People adopted that kind of lean mentality, and then they applied it to supply chains with the assumption that they would have low-cost and reliable shipping,” said Mr. Shih, the Harvard Business School trade expert. “Then, you have some shocks to the system.”
An Idea That Went ‘Way Too Far’
presentation for the pharmaceutical industry. It promised savings of up to 50 percent on warehousing if clients embraced its “lean and mean” approach to supply chains.
Such claims have panned out. Still, one of the authors of that presentation, Knut Alicke, a McKinsey partner based in Germany, now says the corporate world exceeded prudence.
“We went way too far,” Mr. Alicke said in an interview. “The way that inventory is evaluated will change after the crisis.”
Many companies acted as if manufacturing and shipping were devoid of mishaps, Mr. Alicke added, while failing to account for trouble in their business plans.
“There’s no kind of disruption risk term in there,” he said.
Experts say that omission represents a logical response from management to the incentives at play. Investors reward companies that produce growth in their return on assets. Limiting goods in warehouses improves that ratio.
study. These savings helped finance another shareholder-enriching trend — the growth of share buybacks.
In the decade leading up to the pandemic, American companies spent more than $6 trillion to buy their own shares, roughly tripling their purchases, according to a study by the Bank for International Settlements. Companies in Japan, Britain, France, Canada and China increased their buybacks fourfold, though their purchases were a fraction of their American counterparts.
Repurchasing stock reduces the number of shares in circulation, lifting their value. But the benefits for investors and executives, whose pay packages include hefty allocations of stock, have come at the expense of whatever the company might have otherwise done with its money — investing to expand capacity, or stockpiling parts.
These costs became conspicuous during the first wave of the pandemic, when major economies including the United States discovered that they lacked capacity to quickly make ventilators.
“When you need a ventilator, you need a ventilator,” Mr. Sodhi said. “You can’t say, ‘Well, my stock price is high.’”
When the pandemic began, car manufacturers slashed orders for chips on the expectation that demand for cars would plunge. By the time they realized that demand was reviving, it was too late: Ramping up production of computer chips requires months.
stock analysts on April 28. The company said the shortages would probably derail half of its production through June.
The automaker least affected by the shortage is Toyota. From the inception of Just In Time, Toyota relied on suppliers clustered close to its base in Japan, making the company less susceptible to events far away.
‘It All Cascades’
In Conshohocken, Pa., Mr. Romano is literally waiting for his ship to come in.
He is vice president of sales at Van Horn, Metz & Company, which buys chemicals from suppliers around the world and sells them to factories that make paint, ink and other industrial products.
In normal times, the company is behind in filling perhaps 1 percent of its customers’ orders. On a recent morning, it could not complete a tenth of its orders because it was waiting for supplies to arrive.
The company could not secure enough of a specialized resin that it sells to manufacturers that make construction materials. The American supplier of the resin was itself lacking one element that it purchases from a petrochemical plant in China.
One of Mr. Romano’s regular customers, a paint manufacturer, was holding off on ordering chemicals because it could not locate enough of the metal cans it uses to ship its finished product.
“It all cascades,” Mr. Romano said. “It’s just a mess.”
No pandemic was required to reveal the risks of overreliance on Just In Time combined with global supply chains. Experts have warned about the consequences for decades.
In 1999, an earthquake shook Taiwan, shutting down computer chip manufacturing. The earthquake and tsunami that shattered Japan in 2011 shut down factories and impeded shipping, generating shortages of auto parts and computer chips. Floods in Thailand the same year decimated production of computer hard drives.
Each disaster prompted talk that companies needed to bolster their inventories and diversify their suppliers.
Each time, multinational companies carried on.
The same consultants who promoted the virtues of lean inventories now evangelize about supply chain resilience — the buzzword of the moment.
Simply expanding warehouses may not provide the fix, said Richard Lebovitz, president of LeanDNA, a supply chain consultant based in Austin, Texas. Product lines are increasingly customized.
“The ability to predict what inventory you should keep is harder and harder,” he said.
Ultimately, business is likely to further its embrace of lean for the simple reason that it has yielded profits.
“The real question is, ‘Are we going to stop chasing low cost as the sole criteria for business judgment?’” said Mr. Shih, from Harvard Business School. “I’m skeptical of that. Consumers won’t pay for resilience when they are not in crisis.”
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Norwegian Cruise Line is threatening to keep its ships out of Florida ports after the state enacted legislation that prohibits businesses from requiring proof of vaccination against Covid-19 in exchange for services.
The company, which plans to have its first cruises available to the Caribbean and Europe this summer and fall, will offer trips with limited capacity and require all guests and crew members to be vaccinated on bookings through at least the end of October.
During a quarterly earnings call on Thursday, Frank Del Rio, chief executive of Norwegian Cruise Line, said the issue had been discussed with Florida’s governor, Ron DeSantis, a Republican. Mr. Del Rio said if the cruise line had to skip Florida ports, it could operate out of other states or the Caribbean.
“We certainly hope it doesn’t come to that,” Mr. Del Rio said. “Everyone wants to operate out of Florida. It’s a very lucrative market.”
such as Major League Baseball and National Basketball Association games, state health and safety guidelines require that fans provide proof of vaccination or of a negative coronavirus test within 72 hours of attendance.
“We hope that this hasn’t become a legal football or a political football,” Mr. Del Rio said on the call.
Norwegian Cruise Line is headquartered in Florida along with Royal Caribbean Cruises and Carnival Corporation. In 2019, about 60 percent of all U.S. cruise embarkations were from Florida ports, according to an economic analysis prepared last year for the Cruise Lines International Association.
In a business update on Thursday, Norwegian Cruise Line said it was experiencing “robust future demand” with bookings for the first half of 2022 that were “meaningfully ahead” of 2019 bookings. Through the end of the first quarter of 2021, the company said it had $1.3 billion of advance ticket sales.
a statement on Monday when he signed the bill. “In Florida, your personal choice regarding vaccinations will be protected and no business or government entity will be able to deny you services based on your decision.”
His office did not immediately respond to a request for comment on Saturday, and Norwegian Cruise Line could not be reached for comment.
“We hope that everyone is pushing in the same direction, which is we want to resume cruising in a safe manner, especially at the beginning,” Mr. Del Rio said on the earnings call. “Things might be different six months from now or a year from now.”
The latest guidance from the Centers for Disease Control and Prevention allows for cruise ships to conduct “simulated voyages” with volunteer passengers to see how cruise lines can safely resume operations with measures such as testing and potential quarantines.
The C.D.C. requires cruise lines to complete the test runs before they can be cleared to sail with passengers this summer.
“It is not possible for cruising to be a zero-risk activity for spread of Covid-19,” the C.D.C. said this week. “While cruising will always pose some risk of Covid-19 transmission, C.D.C. is committed to ensuring that cruise ship passenger operations are conducted in a way that protects crew members, passengers and port personnel.”
Tampa, Miami and Key West.
Mr. Del Rio said “pent-up demand” had helped fill bookings quickly.
“I believe it’s the No. 1 destination for Americans to the Caribbean,” Mr. Del Rio said. “Who knows? That vessel might prove to be so profitable there that it never returns back to U.S. waters.”
ROME — To most eyes, the scruffy, sun-faded ship that left Venice for Sicily last week might have looked like a junkyard-ready wreck.
Instead, as the ship embarked upon what may be its final voyage, via barge and tugboat, and arrived in Sicily on Tuesday, others were hoping it would become a monument to the devastating toll exacted by the trafficking of people across the Mediterranean from Africa to Europe by unscrupulous operators.
The ship, the relic of the deadliest wreck in the Mediterranean in living memory, is a symbol of contemporary migration in Europe that has become part of its cultural heritage, said Maria Chiara Di Trapani, an independent curator working on future projects for the vessel.
On April 18, 2015, the unnamed ship — originally built as a fishing vessel for a crew of around 15 — capsized off the coast of Libya, becoming the watery grave for the more than 1,000 people, many from Mali, Mauritius and the Horn of Africa, crammed onboard. Only 28 passengers survived.
Missing Migrants Project run by the International Organization for Migration has recorded a minimum of 12,521 deaths or disappearances during migration across the Central Mediterranean route.
The ship sank after colliding with a Portuguese freighter that had come to its assistance. An analysis of the shipwreck has been treated by migration activists as a case study on the perils of inexpert assistance at sea. The ship was later used as evidence in a case against the Tunisian captain who piloted the ship and in 2018 was convicted of human trafficking.
“The story of the boat is very complex, involving many people,” said Enzo Parisi, the spokesman for the Comitato 18 Aprile, a citizens’ group in Augusta, Sicily, that wants the boat to become a monument, “a testimony to tragedies at sea.”
In June 2016, the Italian government decided to raise the wreck 1,200 feet from the bottom of the sea to identify the victims. The ship was taken to a naval base in Augusta, and the victims were extracted.
laboratory at the University of Milan for the laborious task of cataloging and possible identification.
The ship’s destiny, at that point, was to head to the scrap yard, like hundreds of ships that have been seized by Italian authorities.
But the wreck’s symbolic power had become apparent. In 2019, supported by the Comitato 18 Aprile, Augusta’s municipal council was granted custody of the ship. The region lobbied to have it declared a monument of cultural interest and the committee came up with proposals for a memorial that would have the ship as the centerpiece.
“As a seaport, Augusta has always been welcoming,” said Giuseppe Di Mare, the mayor of the Sicilian city, which is a first landing spot for many migrants rescued in the Mediterranean, before they are processed and shunted off to other Italian cities. Because of the coronavirus, the sea rescues now include an interim stop on quarantine ships, and currently there are two such ships in Augusta’s harbor.
“Barca Nostra,” or “Our Ship” in Italian, the vessel was presented at the art exhibit as a “monument to contemporary migration” and restrictions on personal freedoms.
2019 documentary about the disaster and the attempts to identify the victims, Ms. Mirto counted headstones in a cemetery that read: “Unknown Immigrant Deceased in the Strait of Sicily on 18.4.2015.”
The project to identify victims continues, sponsored by Italy’s special commissioner for missing persons. Dr. Cattaneo, the forensic pathologist who is responsible for the university laboratory in Milan, said that funding shortages had hampered the work, and that, so far, only six victims had been identified using their methodology, which involves comparing the DNA extracted from the victims to the DNA of family members, as well as anthropological and dental traits.
She is hopeful that progress will be made this year, as the university is now working with other academic institutions, as well as Italian law enforcement authorities, but she cautioned that the condition in which researchers had found the bodies after a year under water made everything “extremely complex.”
The International Committee of the Red Cross and other national affiliates have also been involved in identifying the victims of the tragedy. They have adopted a different, complementary, approach, attempting to draft a list of the passengers onboard by cross-referencing the accounts of survivors, witnesses, relatives, friends, as well as from the objects that were recovered from the ship. Currently, they are calling some of the nearly 1,500 phone numbers — which have been tracked to 56 countries — that were found in the wreckage in hopes of gleaning new clues.
have died in the first months of 2021.
The ship will now undergo urgent maintenance, after two years exposed to a north Italian climate.
The city of Augusta has envisioned placing the ship in what the authorities describe as a “Garden of Memory,” that “will have to be in the open, because that boat gives a sense of the sea, the air, the skies. To enclose it in a building would clash with its’ story,” said Mr. Di Mare, the mayor.
“Certainly, the ship has attained an international dimension and we want this garden to become a place of reflection for the world, so that all people can ponder,” he said.