Disruption Report #70 – China Eases Up On Covid, Congress and Biden Prevent a Railroad Strike, and U.S. Orders from China Down 40%

U.S. Orders from China Down 40%

It’s hard to believe, but after two years of back-breaking freight costs and container unavailability, the world has turned upside down again. U.S. orders from China are down a whopping 40%. 

So significant is this drop in demand that CNBC ran an article with the headline, “Manufacturing orders from China down 40% in unrelenting demand collapse.

That drop in volume impacts container volume. And according to the above article by Lori Ann LaRocco, container volume is down 21% between August and November.

As a result, there are reports that factories will close two weeks early for the Chinese New Year. 

China Eases Up On Covid

The Chinese people have spoken, and the Chinese government appears to be listening. Here is how the Wall Street Journal put it:

Local authorities across China are paring back some of their strictest Covid-19 control measures, just days after public anger spilled over into rare protests against a zero-tolerance approach that has kept the country largely isolated for three years.

China Loosens Covid Restrictions as Public Anger Simmers, Chun han wong, wall street journal,

What is ironic is that the World Cup was partially responsible for the unrest. When Chinese citizens watched the games, they saw no one wearing a mask. They had yet to realize that the rest of the world had moved mainly on while lockdowns and testing requirements constantly disrupted their lives.

The challenge for China is that due to its use of quarantines and factory and port shutdowns, there is little herd immunity in China. Consequently, the ease of restrictions may cause a wave of infections and deaths.

The U.S. Avoided a Railroad Strike, Thank the Politicians

President Biden and Congress actually worked together to prevent a railroad strike that could have devastated the economy. The bill banning a strike passed the Senate by an 80-15 vote. President Biden immediately signed it.

The legislation, which was approved by the House on Wednesday, enacts new contracts providing railroad workers with 24% pay increases over five years from 2020 through 2024, immediate payouts averaging $11,000 upon ratification and an extra paid day off.

Senate approves bill enforcing railroad labor agreement before strike deadline, sends to Biden, Lori Ann Larocco, CNBC, December 1, 2022

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