Monday, September 27, 2021

It's A Gas For Boris And It's All On Fire

Brexit on top of COVID-19 supply chain shortages means the UK is in dire straits right now when it comes to the basics, and panic buying of fuel around the country and massive shortages means PM Boris Johnson is calling in the British Army to handle distribution.

Boris Johnson is preparing to draft in hundreds of soldiers to tackle the UK’s fuel crisis as at least half of petrol stations outside the motorway network have run out of fuel after Britons engaged in panic buying.

The prime minister will meet senior ministers and officials on Monday to examine the latest data following the disruption to fuel supplies caused by a scarcity of tanker drivers. One senior government insider said: “The situation in England is very bad.”

Johnson will consider plans on Monday to use the army to drive tankers around the country, under contingency planning known as Operation Escalin. One Whitehall official said that petrol sales on Friday were up 180 per cent on normal levels as the result of panic buying.

Brian Madderson, chair of the Petrol Retailers Association, a trade body, said a survey of members on Sunday indicated 50 to 85 per cent of all independent service stations had now run dry, excluding motorway forecourts and some supermarket sites that had been given priority by oil companies.

The government announced on Sunday evening that it would temporarily exempt the energy industry — including producers, suppliers, hauliers and retailers — from the 1998 competition act, allowing companies to share information and prioritise deliveries to areas of greatest need.

Officials are receiving updates up to four times a day. But there was some hope in government that the panic buying had calmed by Saturday. Those with knowledge of the situation said that the best-case scenario was that disruption would clear within five days. “There is a crisis in data, we are trying to get a better picture on when the panic will pass,” one insider said.

Madderson said what had been a “manageable issue” of localised shortages at a small number of retail sites last week had quickly spiralled after media reports of supply problems had set off panic buying by motorists, with some members stating demand had surged “500 per cent above the normal level” on Saturday, quickly draining forecourt fuel tanks.

The UK has about 8,000 petrol stations, the majority run by independent retailers, some of whom operate franchises using the big oil companies’ brands.

Madderson told the Financial Times that while the short-term issue was “panic buying”, the root cause was “a government that’s been dragging its feet over the issue of the number of haulage drivers on the ground”.

Ministers bowed to business pressure on Saturday and announced they would issue temporary visas to 5,000 foreign heavy goods vehicle drivers to help tackle major labour shortages in the logistics industry.

The government move came after panic buying followed BP saying last week that as many as 100 service stations had been disrupted and several forecourts closed because of a shortage of tanker drivers.
Brexit continues to be an enduring disaster for Boris and the boys, and the shortages aren't just in the energy sector.
The United Kingdom is facing possible shortages in meat, poultry and packaged foods as a rise in energy costs may lead some companies to stop production, the Associated Press reported.

British Business Secretary Kwasi Kwarteng said Tuesday that he's trying to ink a deal with CF Industries, the main provider of food-grade carbon dioxide, which is used to stun animals preceding slaughter, preserve fresh produce and carbonate beverages. The company stopped production at its U.K. plants last week because of high natural gas prices and said that it couldn't provide an estimate for when operations would resume.

"We're hopeful that we can get something sorted today and get the production up and running in the next few days," Kwarteng told the BBC. "It may come at some cost. We're still hammering out details. We're still looking at a plan."

Ian Wright, chief executive of the Food and Drink Federation, said that unless a deal is worked out soon with food-grade carbon dioxide providers, U.K. residents could start seeing food shortages "in about 10 days. Meanwhile, the production of poultry and pork is projected to decline by the end of the week.

Four small energy providers have failed in recent months, and the U.K. government is in talks with larger firms to ensure that gas and electricity keeps flowing to customers this winter if any other suppliers collapse.

The squeeze on Britain's food processing industry is among the most visible impacts of a spike in natural gas prices as the global economy recovers from the COVID-19 pandemic—boosting demand for energy. Wholesale gas prices have tripled this year in Britain.
It's going to get a lot worse in the UK before it gets better, and this winter may be painfully bad for a lot of Britons.  The fuel shortages are only going to make distribution of other goods that much harder, in what could be a nasty spiral that gets out of control and wrecks the "just in time" delivery system that most companies run on these days.

I've been in automotive manufacturing, and for all the talk of Six Sigma and lean manufacturing techniques as a groupthink brain fart situation, it really is a system where a couple of large delayed or missed shipments can throw off everyone down the line in a number of areas, especially when it comes to perishable goods like food.

Britain is finding this out in the worst possible of ways, with Brexit already breaking most of those shipment, distribution, and labor systems. Brexit during COVID-19's resurgence, see the results.

It's not going to be pretty, and folks here in the US should definitely be paying attention.

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