Coronavirus Chaos Racks Companies Along the West Coast

Rachel Uranga

Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

Coronavirus Chaos Racks Companies Along the West Coast

As the deadly coronavirus unnerves markets around the world and sends officials scrambling to prepare for a pandemic, retail giants like Amazon and startups alike are grappling with production slowdowns without a clear end in sight as the fast-moving virus spreads through Europe and the Middle East.


Supply chains across the West Coast are in disarray as billions of dollars worth of Chinese goods are delayed and travel-related business slump even as the virus slows in China. And major players like Apple and Expedia are warning of hits to their bottom line. Meanwhile, small businesses and startups like Los Angeles-based DropLabs, which operates with a lean inventory, are already feeling the pain.

"We are out of inventory," said Susan Paley, chief executive of Echo Park-based DropLabs, a bluetooth connected sneaker that sends vibrations into foot nerves to amplify a sound experience.

At the nation's largest hub for cargo trade with China — the Los Angeles port — officials are anticipating a 20 to 25% drop in trade this month. Long Beach, the nation's second largest port, expects a 10% fall. And Seattle and Tacoma port complex, the nation's fifth busiest for cargo, officials have been logging cancellations from vessels bound from China.

Supply chain experts say factories around the country remained shuttered or below capacity with workers coming from rural areas still stuck at home after the Lunar New Year. Factories normally shut down during the holiday for several weeks but the virus hit just as the holiday was ending.

Over 2,700 people have died from the novel coronavirus. And while there are signs of the virus slowing in China, outbreaks in Europe and new cases in Africa have alarmed the World Health Organization. The Centers for Diseases Control and Prevention said on Tuesday it was preparing for a pandemic and warned schools and businesses to prepare for interruptions. Some medical officials suggest that virus is seasonal, but it's too early to say. Orange County on Tuesday joined San Diego in San Francisco in declaring a local health emergency.

"It's very scary what's developing," said Stephen Cheung, president of the World Trade Center in Los Angeles. "Before it was about what is happening in China. But this is a completely different story now about 'how do we get ready for a pandemic'."

Already, Chinese tourism is down, he said, along with the luxury shoppers it brings.

At the Seattle-based Jet City Repair, owner Matt McCormick has had to reshuffle orders. He normally relies on Chinese made components for the more than 22,000 repairs he makes each year but with supplies short, he had to switch to U.S. manufacturers that he calls more expensive and lower quality.

Chinese production fuels the global economy, as does its consumption. The Communist nation has become the world's factory producing everything from shoes (70% of all shoes sold in the U.S. come from China) to auto parts and cell phones. Their interconnected infrastructure is unparalleled and the slowdown of output has ricocheted across the global economy - from hotel chains and airlines to car manufactures and medical suppliers.

At West Coast ports from Los Angeles to Seattle, long the nation's gateway to Asia, officials said they are getting numerous cancelations from vessels that would normally ferry millions of toys, car parts, electronics and other products.

DropLabs told customers their just-launched shoes that retail for $449 will be delayed, as it waits for all their contractors to get online. "The problem that you have is that right now even if some parts of your supply chain is online, other parts aren't," said Paley, a former executive at Beats by Dr. Dre.

A load of 700 DropLabs' sneakers are sitting in China waiting for a final component, but most of the workers for the factory responsible for it are from Hubei, the province where Wuhan is located - the epicenter of COVID-19, as the virus is known. And she has no idea when that factory will come back online.

"There really is chaos and confusion and a lack of insight to when things are going to be ok," said Paley, who canceled planned trips to China this month. "Everyone is dealing with and everyone is feeling the pain."

Anthony J. DiBenedetto, a lawyer at Fenwick & West said he's been telling his clients to make sure that employees aren't traveling to China — and if they do, keep them away from the office. The freeze on travel has also impacted venture investments. PItchBook recorded a sharp decline in venture capital investments in China compared to the same period last year.

Worldwide, about 81,000 cases of the virus have been reported with 77,780 in China.

What's complicating matters is the lack of reliable information coming out of China, said Nick Vyas, executive director of USC Marshall's Center for Global Supply Chain Management. He expects the ripple effects to continue even after the virus is resolved.

"Long term this will be a big lesson to a lot of companies small, medium and large to have contingencies," he said.

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🍵☕️Top 6 Coffee Alternatives for Enhanced Productivity

In the fast-paced world of startups and venture capital in Los Angeles, maintaining peak productivity is essential for founders and investors alike. As the hustle intensifies, many are seeking alternatives to traditional coffee that not only provide a sustained energy boost but also support overall health and well-being. The following list highlights some of the top-rated coffee alternatives that can enhance focus and productivity while minimizing the adverse effects of caffeine. These options incorporate adaptogens, superfoods, and gut-friendly ingredients, making them ideal choices for those looking to optimize their performance without the afternoon crash.


Matcha

Image Source: Jade Leaf Matcha

Matcha is a finely ground green tea that offers a moderate amount of caffeine, along with L-theanine, which promotes relaxation without drowsiness. This combination can enhance focus and concentration, making matcha a suitable alternative for those looking to boost productivity without the jitters of coffee.

Popular Brands: ReNude Chaga Matcha (60 mg caffeine), Golde Pure Matcha (60 mg caffeine), Organic Ceremonial Matcha - Teahouse Edition (30 mg caffeine)


Dandelion Root Coffee

Image Source: Amazon

Dandelion root coffee is a caffeine-free alternative that mimics the taste of coffee. It is known for its potential to support liver health and digestion, which can contribute to overall well-being and productivity. The drink can help avoid the acidity and jitters that often accompany regular coffee, making it a gentler option for those sensitive to caffeine.

Popular Brands: Dandy Blend (0 mg caffeine), Teeccino Dandelion Dark Roast (0 mg caffeine)


Adaptogenic Drinks

Image Source: MUD\WTR Masala Chai

Adaptogenic beverages, which include ingredients like ashwagandha, reishi, and maca, are designed to help the body adapt to stress and promote mental clarity. These drinks can provide a sustained energy boost without the crash, supporting productivity throughout the day. They are often made with superfoods and spices that enhance both physical and mental performance.

Popular Brands: MUD\WTR Masala Chai (35 mg caffeine), Four Sigmatic Think Coffee (150 mg caffeine), ReNude Chagaccino (0 mg caffeine)


Golden Milk (Turmeric Latte)

Image Source: Golde

Golden milk, made from turmeric, ginger, and milk (or a milk alternative), is a caffeine-free option that can improve mood and reduce inflammation. The calming properties of this drink can help maintain focus and clarity, making it a great addition to a productive morning routine.

Popular Brands: Golde Turmeric Latte Blend (0 mg caffeine), Blume Turmeric Blend (0 mg caffeine), Four Sigmatic Golden Latte Mix (0 mg caffeine)



Chicory Root Coffee

Image Source: Teeccino

Chicory root coffee is an excellent alternative that satisfies the desire for a warm beverage without caffeine. It is rich in inulin, a prebiotic fiber that aids in digestion and promotes gut health by supporting beneficial bacteria. Chicory coffee has a nutty, earthy flavor and can help control blood sugar levels, contributing to overall energy and productivity throughout the day.

Popular Brands: Anthony’s Instant Chicory Root (0 mg caffeine), Teeccino Chicory Coffee Alternative (0 mg caffeine)


Yerba Mate

Image Source: Guayaki Yerba Mate

Yerba mate is a traditional South American herbal tea made from the leaves of the Ilex paraguariensis plant. It contains about 40-80 mg of caffeine per serving, which is less than a standard cup of coffee but enough to provide a gentle energy boost. Yerba mate is rich in antioxidants, vitamins, and minerals, and users often report feeling energized without the jitters or crashes associated with coffee. It has a unique, slightly bitter flavor and can be enjoyed in various forms, including loose-leaf tea and pre-brewed options.

Popular Brands: Guayaki Yerba Mate (40-150 mg caffeine)


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LA’s Data Center Supply Crunch

🔦 Spotlight

Happy Friday Los Angeles!

The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


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LA Companies

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LA Venture Funds


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    LA TECH CEO SUMMIT

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    🌐Decentralizing Data & Vacations: Sony's Web3 Leap and Sensible Weather's KOA Partnership

    🔦 Spotlight

    Happy Long Weekend Los Angeles!

    Sony Group is making a significant push into the blockchain and Web3 space, leveraging its Sony Pictures and Sony Music divisions along with a new global incubator. The company has developed the Soneium blockchain through Sony Block Solutions Labs, a joint venture aimed at accelerating Web3 innovation. Sony is launching the "Soneium Minato" public testnet and a developer incubation program called "Soneium Spark" to foster ecosystem growth and adoption. The initiative includes strategic partnerships with Web3 companies such as Astar Network, Circle, and Optimism. Sony aims to create a fan community centered on creators and connect diverse values through Soneium, with the ultimate goal of integrating Web3 services into people's daily lives. While the company acknowledges the challenges faced by Web3, including limited user adoption and the need for mainstream use cases, it remains committed to decentralizing the concentrated power of the current internet landscape.

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    • Fika Ventures led a $4.55M Seed Round for Revenew, a San Francisco startup that aims to help digital platforms and marketplaces manage their payments and optimize financial operations. - learn more
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      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

      Learn More Here

      Register Here


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