Afternoon Coffee: Colonial Pipeline cyberattack disrupts major US fuel line; Peloton logistics issues are heightened by treadmill recall; Garden gnome shortage

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A ransomware cyberattack on the Colonial Pipeline over the weekend sent shockwaves across the industry as the US government and a top US fuel pipeline operator worked to secure the network on Monday, according to Reuters.

A shutdown disrupted fuel supply across the eastern United States, triggering isolated sales restrictions at pumps and is expected to push gasoline prices to a three-year high. The pipeline is the primary fuel line from Gulf Coast refineries to Mid-Atlantic and southeastern states. It moves over 2.5 million barrels per day of gasoline, diesel and jet fuel, the article said.

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The cyberattack on the Colonial Pipeline was one of the most disruptive digital ransom schemes ever reported. US lawmakers have urged stronger protections for the US energy infrastructure. The White House has said restarting the fuel network is a top priority. Reuters reported that Colonial Pipeline restarted some smaller lines but did not provide a timeline for a full restart of the 5,500-mile system.

"A Herculean effort would be needed from other sources to make up the shortfall (on the East Coast,) if the pipeline disruption is prolonged," RBC Capital Markets wrote in a note to Reuters.

Peloton logistics issues heightened with product recall despite supply chain investment

A recent product recall on treadmills for Peloton and costs associated with expedited shipping to improve delivery times is chipping away at the home fitness maker’s margins, according to Supply Chain Dive.

Many companies have faced freight or logistics problems in the last few months. But Peloton has had many supply chain challenges, leading it to invest $100 million to speed up their delivery times. Additionally, a recall of its two treadmill offerings will add even more logistics expenses.

Big and bulky last-mile deliveries are costly. The reverse logistics will be no different, Supply Chain Dive said. Peloton relies on third parties to execute the last-mile deliveries. It will have to employ the help of its partners to move recalled treadmills out of customers' homes.

"If any of these independent contractors, or the last-mile partner as a whole, do not perform their obligations or meet the expectations of us or our members, our reputation and business could suffer," Peloton said as a risk factor in its filing with the Securities and Exchange Commission.

No more garden gnomes?!?

If you’re looking for a friend to keep you company this summer in your gardening efforts, you may need to rethink it. The latest product experiencing shortages because of pandemic-related supply chain disruptions is garden gnomes, according to the website Salon.

Since the beginning of the coronavirus pandemic, gardening centers have seen record sales without any end in sight. But between the Suez Canal blockage and changing demands, garden centers especially in the UK have seen a shortage of garden gnomes.

It’s hard to predict when supply will reach demand again. But Salon said it’s unlikely that you’ll find gnomes in shops this summer.

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