“High Degree Of Risk” – US, Maersk Warn Shippers to Steer Clear of Red Sea Crisis
Two months of drone and missile attacks on commercial vessels, as well as hijackings, in the highly contested Red Sea region by Iran-backed Houthi rebels, have yet to abate as economic costs mount for shippers and increased risks of snarled global supply chains.
The latest evidence that Red Sea disruptions will persist is a notice from the Department of Transportation informing commercial ship operators to avoid the “Southern Red Sea between 12N and 16N.”
There continues to be a high degree of risk to commercial vessels transiting the Southern Red Sea between 12N and 16N. While the decision to transit remains at the discretion of individual vessels and companies, it is recommended that US flag and US-owned commercial vessels remain North of 18N in the Red Sea or East of 46E in the Gulf of Aden until further notice.
Besides Houthi attacks on Western vessels, the US and allies have ramped up attacks on the rebels in Yemen with repeated airstrikes.
Bloomberg reported early Wednesday that one of the world’s largest shippers, Maersk, told clients in a notice to prepare for supply line disruptions as containerized vessels are rerouted to the Cape of Good Hope, which takes an extra 1-2 weeks for Asia to Europe shipping lanes.
“While we continue to hope for a sustainable resolution in the near-future and do all we can to contribute towards it, the situation currently remains untenable,” Maersk said.
According to Flexport data, more than 500 container ships that would have sailed through the Red Sea have been rerouted to the Cape of Good Hope at the southern tip of Africa. This is about a quarter of all the container shipping capacity in the world.
Meanwhile, a new report from the Financial Times, citing “American officials,” says the US has asked China to help rein in Houthi rebels.
Officials have repeatedly raised the matter with top Chinese officials in the past three months, asking them to convey a warning to Iran not to inflame tensions in the Middle East after Hamas’s October 7 attack on Israel and the ensuing war.
US national security adviser Jake Sullivan and his deputy, Jon Finer, discussed the issue in meetings this month in Washington with Liu Jianchao, head of the Chinese Communist party’s international department, according to US officials. Secretary of state Antony Blinken also raised it, said a state department official. -FT
In recent weeks, Red Sea diversions have tightened capacity and resulted in soaring container prices:
“We haven’t seen costs increase this quickly since the last crunch in the pandemic,” said Vincent Iacopella, a logistics expert at Alba Wheels Up, who spoke with Bloomberg.
Iacopella said, “Many of the underlying bottlenecks in supply chains remain, even though prices dropped last year as the Covid-19 disruptions faded.
The cost of shipping containers from China to the Mediterranean Sea has quadrupled since late November.
We pointed out last week that executives and investors are becoming concerned about Red Sea disruptions in earnings calls.
Using the Document Search function on Bloomberg, earnings-call mentions of “Red Sea” topped 41 last week, a record high. As the earning season progresses, the mentions will likely increase.
And as of writing this note, Sky News reports Houthi forces “fire a second missile from Al-Bayda towards the Gulf of Aden.”
President Biden’s Operation Prosperity Guardian faces severe hurdles as the West’s move to secure the critical waterway has failed so far.
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Boeing 737 Production System a “Rambling, Shambling Disaster Waiting to Happen” – Whistleblower
An anonymous self-described Boeing insider told the Seattle Times that Boeing’s 737 production system is described as “a rambling, shambling, disaster waiting to happen.”
Specifically, the whistleblower said that the fuselage panel that blew off an Alaska Airlines jet earlier this month was removed for repair then reinstalled improperly by Boeing mechanics on the Renton final assembly line.
“The reason the door blew off is stated in black and white in Boeing’s own records,” the whistleblower wrote.
“It is also very, very stupid and speaks volumes about the quality culture at certain portions of the business.”
The insider said company records show four bolts that prevent the door plug from sliding up off the door frame stop pads that take the pressurization loads in flight, “were not installed when Boeing delivered the airplane.” the whistleblower stated.
“Our own records reflect this.”
The Seattle Times additionally notes that NTSB investigators already publicly raised the possibility that the bolts had not been installed.
If verified by the National Transportation Safety Board investigation, this would leave Boeing primarily at fault for the accident, rather than its supplier Spirit AeroSystems, which originally installed the panel into the 737 MAX 9 fuselage in Wichita, Kan.
Spirit Aerosystems shares are up over 5% in the pre-market…
This news follows reports overnight that in recent inspections of Boeing 737 Max 9 airplanes following an early January incident in which the door blew off of one mid-flight, Alaska Airlines CEO Ben Minicucci revealed that the airline had found “some loose bolts on many” of their Max 9s.
When asked in an interview with NBC whether Boeing has a quality control problem, Minicucci said: “I think this is the issue that’s at question right here, which is what is Boeing going to do differently on their quality program, to make sure that when we get an airplane, it’s at the highest degree of excellence and that’s what’s got to be different going forward.”
“I’m more than frustrated and disappointed,” he said. “I am angry. This happened to Alaska Airlines. It happened to our guests and happened to our people. And — my demand on Boeing is what are they going to do to improve their quality programs in-house.”
After the door blew out on a 737 Max 9 a few minutes into a flight from Portland, Oregon to Ontario, California – forcing an emergency landing, the FAA ordered all Boeing Max 9 planes grounded for a safety investigation – and announced an audit of the Boeing Max 9 production line and suppliers “to evaluate Boeing’s compliance with its approved quality procedures.”
Boeing and its third-party suppliers will also face additional increased monitoring.
Wheel-y guys?
It gets worse for Boeing. On Saturday, a Delta 757 traveling from Atlanta lost a wheel as it attempted to take off from the Hartsfield-Jackson Atlanta International Airport.
The “nose wheel came off and rolled down the hill,” according to the incident report.
!
— Elon Musk (@elonmusk) January 23, 2024
Get it together Boeing…
— Stephanie ?? (@StephHoover8) January 23, 2024
I’m not gonna be flying for a while pic.twitter.com/CF27qmyTe4
— ??. ??? ????? (@Vox_Oculi) January 23, 2024
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Leading Newspaper Announces Major Layoffs
The Los Angeles Times announced on Tuesday that it would lay off at least 155 employees, or a fifth of its newsroom staff. According to its owner, the paper has been losing up to $40 million per year.
The latest round of layoffs is among the most severe in the newspaper’s 142-year history, and comes after 74 newsroom staff were sacked in July. The Los Angeles Times Guild, a trade union representing the paper’s journalists, said that 94 of its members were among those let go.
The union said that it pushed the paper’s owner, Patrick Soon-Shiong, into agreeing to voluntary buyouts instead of layoffs, but that he refused.
However, in an article announcing the layoffs, Soon-Shiong said that the union soured negotiations by choosing to go on strike last week and refusing a buyout deal that would save all but the most senior staff from being sacked.
Soon-Shiong and his family purchased the ailing newspaper in 2018 and managed to reverse more than a decade of losses and headcount reductions. However, advertising revenue was falling across the entire media industry, and ever since the Covid-19 pandemic, the LA Times had been running up losses of between $30 million and $40 million per year, he said.
Soon-Shiong partially blamed the paper’s editors for the dire financial straits, claiming that their decision to stop printing sports scores last summer led to thousands of readers canceling their subscriptions.
The LA Times is not the only major media company to slash its workforce in recent months. ABC News, Buzzfeed, CNN, Conde Nast, NBC News, and the Washington Post have all cut staff members over the last year, with more than 2,600 jobs lost in the news industry in 2023. Across the broader media sector, 20,342 jobs were cut over the same period, according to a recent report.
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Gates Still Trying To Convince People To Take ‘Safe & Effective Vaccines.
Bill Gates is still on what appears to be his never-ending quest to inject the global human population with as many “vaccines” as possible. The Covid pandemic may be old news at the World Economic […]
The post Gates Still Trying To Convince People To Take ‘Safe & Effective Vaccines. appeared first on The People’s Voice.
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