It’s been a while since we had a look at the backlog of container ships waiting to unload their cargo at the Port of Los Angeles. The Pacific Ocean near Los Angeles, and San Francisco for that matter, looked like a parking lot during the pandemic… I saw it with my own eyes flying overhead to/from the West Coast.
I thought it might be interesting for us to check in and see what things are like today…
Not surprisingly, there has been a long decline in the queue of container ships since February of this year. The pandemic is clearly over, and logistics teams got back to work clearing out containers on the dock and returning to more normal operations.
August was still busy, with a queue of about 25 ships, but what happened in the last few weeks has been striking. At the start of this month, the queue had dropped to just eight ships, an all-time record low.
That might sound like a good thing. After all, the queue was a symptom of the lack of labor to both unload containers from ships, clear those containers through customs, and haul them out of the port via trucks to distribution centers. Finally, it appears that this backlog has cleared… which means that lead times for goods coming from Asia should quickly return back to pre-pandemic levels.
But the busy August masked what’s really going on. Container imports to the U.S. have collapsed 36% year-over-year. The rapid decline began in May, and it’s really starting to show in the numbers.
What does it mean? There’s an excess in inventories in consumer goods in the U.S., which make up more than 75% of all imports. With “real” inflation much higher than the consumer price index (CPI), discretionary spending has collapsed… and with it, demand.
Imports are suffering as a result. And it’s easy to see the weakening economy now that the Port of Los Angeles has cleared out its container backlog. There’s no hiding it now.
Sadly, even with excess inventories and rapidly declining freight costs, prices for goods and services will remain at elevated levels well into 2023. But on the bright side, the days of 6-month lead times, or not being able to find that PlayStation 5 or Xbox Series X, should be well behind us.
A new player enters the fray to power EVs…
A very interesting company in Utah just came out of stealth mode – Ionic Mineral Technologies. This one caught my eye because it could be big news for the next generation of electric vehicle (EV) batteries.
Ionic Mineral Technologies mines halloysite – a mineral it uses to produce “nano-silicon.”
That’s possible because halloysite is an aluminum-silicate clay that naturally occurs with a nano-tubular structure. This quality makes it a great resource for producing high-quality nano-silicon as a material input for EV batteries.
We’ve written a lot in The Bleeding Edge about solid-state batteries. There is an extensive list of companies working on that technology. And most design their batteries with silicon anodes instead of graphite ones (the typical approach for lithium-ion batteries).
This is important for two big reasons…
Silicon vs. Graphite Anodes
Source: Ionic Mineral Technologies
First, compared to graphite, silicon anodes provide greater energy density (i.e., charge capacity).
This is key for solving a major issue holding back EV ownership – limited range. Silicon anodes enable people to travel further with these batteries before needing to recharge.
And second, a big EV owner complaint is the 30-45 minutes it takes for their cars to charge. The reality is that most EV owners don’t have access to a 240-volt charger at their home or apartment.
With silicon anode batteries, it’s possible to charge an EV to 80% capacity in about five minutes… a fraction of the time.
But these silicon anodes aren’t perfect. They suffer one major challenge. Silicon swells and contracts during the charge and discharge stages. And dendrites are formed during this process which can, in the worst case, lead to fires.
That’s where Ionic comes into play. It believes its nano-silicon will be a game changer with solid-state batteries. This nano-silicon material has the potential to address this swelling problem.
That’s why I’m going to be keeping an eye on Ionic. I’ll be watching in particular to see if any of the leading-edge EV battery companies begin to adopt the nano-silicon material.
Ionic is unique in that it owns the resource for producing nano-silicon. The company controls 2.4 million tons of halloysite resources in Utah. This is the world’s largest deposit of high-purity halloysite.
The company expects its Utah-based manufacturing plant will be up and running by the end of Q2 next year. Then it will have the capacity to produce tens of thousands of tons of nano-silicon a year that it can sell to battery makers.
And since Ionic is building its plant on U.S. soil, this will help domestic supply chains secure materials. It’s yet another piece in the Great Recalibration I’ve been writing about in these pages, and it’s potentially great news for domestic EV makers.
So this company could be revolutionary for solid-state EV batteries, especially if designs start incorporating its nano-silicon material.