Inflation Alert! In an advisory today, Norfolk Southern announced it is adding capacity at Landers intermodal terminal in Chicago. Capacity is great but what happens when there aren't people to work or drive? Let's dive in, plus bonus Detroit coverage!
Let's light this candle!
http://www.nscorp.com/content/nscorp/en/shipping-tools/shipping-news-and-alerts/international-enhancements-at-landers.html
Hmm, making it possible to move containers faster and giving drivers more time to do so (24/7 schedule) just isn't going to fly when people aren't interested in this lifestyle-to-pay ratio. I'll let the logistics apes on the ground in Chicago explain:
https://www.reddit.com/r/Superstonk/comments/onftvx/inflation_alert_extreme_and_deadly_floods_close/h5sq984
https://www.reddit.com/r/Superstonk/comments/onftvx/inflation_alert_extreme_and_deadly_floods_close/h5sspuz
Thank you to all the logistics apes on the ground messaging me and clueing me on data sources, viewpoints, or their day-to-day experiences. This feedback is invaluable, I truly appreciate it!
โWith record demand expected to continue, and further growth in the pipeline, NS is taking action to increase capacity and improve efficiency at Landers for customers and their drayage partners,โ.
My understanding is terminal handles containers for 11 inbound and outbound trains (please correct me if I am wrong logistics Ape friends!).
In other Norfolk Southern delayed news, from yesterday in Detroit:
more capacity issues being driven by lack of chassis to mount to, demand keeps on coming, that is for sure!
The entire transportation network is already facing spikes in costs and supply/labor shortages, and you can bet any of the severe weather we have discussed previously will exacerbate and compound those issues. This will continue to raise costs and those costs will get passed down the line. More fun to look forward to over the coming months. The CPI number from last week is a lie and a joke and this inflation is not transitory--as Covid-19, Suez Canal, and Mother Nature all have continued roles to play in seeing it stick around.
With inventories depleted, trouble likely on the horizon from Mother Nature, how is there any chance of prices going down? This inflation beast in the 'real economy' is insatiable and wants EVERYTHING!! (sidenote, I do think we will see deflation in asset prices when all of this goes down).
All of this pain in the transportation system happening in the backdrop of the Fed still plowing away with $120 billion in assets purchases each month:
$40 billion a month in mortgage-backed securities. This will continue to depress mortgage rates and only continues to add gasoline to the inflation fire.
$80 billion in Treasury securities a month (with policy rates near 0%): represses short-term and long-term interest rates in general, and inflates asset prices and consumer prices, which further DESTROYS the purchasing power of the dollar.
TL:DR The Dollar losing purchasing power + Inflation = Permanent Loss of purchasing power. This will likely be amplified by the demand created from extreme weather events and the lack of current inventory.
Unless one of the many other catalysts triggers the MOASS, I believe inflation is the match that has been lit that will light the fuse of the rocket.
Buckle Up.
