Disruption Report #59 – Potential Railroad Strike, Dollar Tree Makes Big C-Suite Changes, and Manufacturing May Be Staying in Asia

Dollar Tree UNEXPECTEDLY Releases Five Senior Executives

On December 13, 2021, I published an article asking: “Will Its New $1.25 Price Hurt Dollar Tree?” We may have an answer as the retailer announced that the CFO (who has been with them since 2008), the Chief Information Officer, Chief Strategy Officer, Chief Operating Officer, and the Chief Legal Officer are all out of a job.

Notably, the company also announced that it seeks individuals to fill all five positions. That means the change was unanticipated and sudden unless I am reading this very wrong.

On the other hand, rival Dollar General, which has more flexible pricing, announced it is creating 10,000 new jobs, and six senior executive hires.


Søren Skou, CEO of the world’s number two shipping company, Maersk, stated in a Financial Times interview (“Global trade is not going into reverse, says Maersk boss“) that rather than re-shoring or near-shoring, his customers in Europe and the U.S. are looking in Asia for additional manufacturing.

If he is correct, the implication is that talk of re-shoring is just talk. When it comes down to actually moving production back to high-wage countries, the costs are just too prohibitive.

If inflation, Covid, a war in Ukraine, and inflation can’t drive manufacturing back home, I’m not sure what can.


There has been a flurry of reports that America’s warehouses are full due to a surge of inventory after the first of the year. One sign of just how full they are is the historically low warehouse vacancy rate in the Los Angeles area, the home of the Ports of Los Angeles and Long Beach. The average vacancy rate is 5%, almost 17 times higher than what it is now.

The two Southern California ports handle 40% of all containerized freight entering the U.S. If the goods are stored in Los Angeles, they need to be shipped inland by rail. The challenge is that the railroads are also backed up, with 28,000 containers currently waiting to be transported out of the port.

Gene Seroka, Execuitve Director of the Port of Los Angeles, described the situation this way:

We can’t build these facilities fast enough, and even though we boast 2 billion square feet from the shores of the Pacific now out to the desert region of Southern California, we’ve got to turn that cargo out faster and have enough space under roof to manage all of these customers…

Clogged Warehouses And Rail Delays Signal New Supply Chain Woes,” Bloomberg, June 28, 2022

Also of concern, the U.S. railroad labor contracts involving 115,000 workers are up for renewal on July 18. The potential for a railroad strike is very real.

A rail strike on top of a dock worker strike (Dock worker’s contract expires July 1) at the ports of Los Angeles and Long Beach is a genuine possibility that would be a colossal monkey wrench in the nation’s already stressed supply structure. Keep your fingers crossed.

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