Business
U.S. strikes Yemen: Are L.A., Long Beach ports ready for cargo surge?
The ports of Los Angeles and Long Beach, the nation’s largest cargo complex, are bracing for a business surge created by problems elsewhere: the Suez Canal in Egypt — a sudden hot spot in a potentially widening Mideast conflict — and the Panama Canal, plagued by prolonged drought.
The canals are two of the world’s most important trade gateways. When the interconnected global supply chain gets tangled, the knots cause costly delays as retailers and manufacturers look for alternate routes to get their freight to consumers and factories.
The Suez and Panama canals also are options when shippers fear relying solely on Los Angeles and Long Beach, which weathered a series of pandemic-related backlogs and other problems starting in March 2020.
But with labor peace returned to the Southern California docks — longshore workers ratified a new contract last year after months of disruptions — lost business has returned, port officials say, and there’s plenty of capacity for more. Also past are the COVID-19 days, when U.S. consumers’ online shopping binges created a massive traffic jam in San Pedro Harbor, giving ports on the East and Gulf coasts a chance to grab cargo away from Southern California.
The back and forth matters because the ports are a key economic engine in Southern California, affecting not only dockworkers but those who drive trucks, staff warehouses and labor elsewhere in the sprawling distribution and logistics network. The L.A. and Long Beach ports combined handle nearly 40% of U.S. imports from Asia that arrive in metal shipping containers aboard vessels whose length is nearly equivalent to the height of the Empire State Building.
“Very few people had Houthi rebels disrupting the global supply chain on their bingo card,” said Salvatore Mercogliano, a maritime historian at Campbell University in North Carolina and host of a YouTube channel called “What is going on with shipping?”
On Friday, Yemen’s Houthi rebels promised retaliation for U.S. and British strikes launched Thursday. President Biden said the bombings followed diplomatic attempts to end the militant group’s attacks on commercial shipping in the Red Sea as the vessels head toward the Suez Canal.
So far, local ports are seeing more of an effect from problems at the Panama Canal than those in the Red Sea, “and we’ve been able to handle it,” said Mario Cordero, the Long Beach port’s chief executive.
“We’ve stepped back, and lessons have been learned since we had the backlog, and we’re more prepared to go to 24/7 operations if we need to than we have been in the past,” Cordero said. “We are very fluid. We are doing well, and we can handle more.”
Because of the Suez disruptions, many insurers decided that it was safer to send ships on a much longer and more expensive trip south, along the coast of Africa and through a storm-swept passage, to get to ports on the Eastern Seaboard and U.S. Gulf Coast. South Africa’s Cape of Good Hope (a long-ago Pope thought it was a friendly name) is known as the Graveyard of Ships; Southern California is seen as more hospitable, shipping experts said.
Gene Seroka, executive director of the L.A. port, about to leave on a 10-day trip to Asia to search for potential customers, spoke of laying groundwork in Indonesia, Vietnam, India and other countries to “fine-tune that relationship of trade.”
“Now we’ve got a real opportunity to look at pushing cargo away from the Suez and back to the West Coast,” he said.
The Panama Canal was expanded in 2016 to accommodate bigger cargo ships so that customers could take advantage of investments by ports on the U.S. East and Gulf coasts, which were eager to attract cargo that previously landed in Southern California, then moved east by truck and train.
But an extreme drought has dramatically reduced the level of the freshwater artificial lake that helps fill the canal’s locks and is an important source of drinking water and agricultural irrigation. Shippers were willing to pay as much as $4 million to jump ahead of congestion, according to Bloomberg, although that fee recently dropped to less than $270,000 as tankers and cargo ships found other routes.
The arrival of warmer weather patterns from El Niño is expected to worsen the drought, just as the region is entering its traditional dry season.
The Panama Canal had been allowing more than 40 ships a day to pass through on their way to the U.S. Gulf and East coasts. Canal operators have cut that number in half, creating a backlog of ships.
“It’s another disruption,” said Jonathan Gold, vice president for supply chain and customs policy for the National Retail Federation. “It’s another impact on the supply chain, and it was supposed to be an easy gateway for trade but now has restrictions.”
Seroka said the Port of Los Angeles is running at 75% of capacity and is at pre-COVID levels.
“So not only do we have capacity to grow, but we’ve also got the bottlenecks and the backlogs worked out of the system,” he said. “We took what we learned from the COVID surge and tried to apply it day in and day out.”
Consumers, meanwhile, are likely to feel shipping delays in their wallets.
“Going around the [Cape of Good Hope] is not sustainable,” said Tyler Reeb, interim executive director of Cal State Long Beach’s Center for International Trade and Transportation. “That’s particularly because these ships are huge, and they have to stop and refuel. They are going to do that in South Africa; fuel’s very expensive there.
“The bigger issue is that we have gotten ourselves out of high inflation, and this is a very inflationary-looking solution,” he added.
Reeb said that going around the cape adds 10 to 15 days to a ship’s journey.
“That’s time and money, and that’s what leads to more challenges for retailers,” he said. “They’re not going to get their goods they need in time on their shelves, and it will be challenging.”
All of that plays up Southern California’s geographic advantage, according to Mercogliano.
“You’re adding 3,500 miles to the trip and paying for an extra million dollars in fuel,” he said. “What’s beginning to happen now is shippers are saying, ‘OK, put my box on a ship for L.A., for Long Beach.’”
Business
‘Stranger Things’ finale turns box office downside up pulling in an estimated $25 million
The finale of Netflix’s blockbuster series “Stranger Things” gave movie theaters a much needed jolt, generating an estimated $20 to $25 million at the box office, according to multiple reports.
Matt and Ross Duffer’s supernatural thriller debuted simultaneously on the streaming platform and some 600 cinemas on New Year’s Eve and held encore showings all through New Year’s Day.
Owing to the cast’s contractual terms for residuals, theaters could not charge for tickets. Instead, fans reserved seats for performances directly from theaters, paying for mandatory food and beverage vouchers. AMC and Cinemark Theatres charged $20 for the concession vouchers while Regal Cinemas charged $11 — in homage to the show’s lead character, Eleven, played by Millie Bobby Brown.
AMC Theatres, the world’s largest theater chain, played the finale at 231 of its theaters across the U.S. — which accounted for one-third of all theaters that held screenings over the holiday.
The chain said that more than 753,000 viewers attended a performance at one of its cinemas over two days, bringing in more than $15 million.
Expectations for the theater showing was high.
“Our year ends on a high: Netflix’s Strangers Things series finale to show in many AMC theatres this week. Two days only New Year’s Eve and Jan 1.,” tweeted AMC’s CEO Adam Aron on Dec. 30. “Theatres are packed. Many sellouts but seats still available. How many Stranger Things tickets do you think AMC will sell?”
It was a rare win for the lagging domestic box office.
In 2025, revenue in the U.S. and Canada was expected to reach $8.87 billion, which was marginally better than 2024 and only 20% more than pre-pandemic levels, according to movie data firm Comscore.
With few exceptions, moviegoers have stayed home. As of Dec. 25., only an estimated 760 million tickets were sold, according to media and entertainment data firm EntTelligence, compared with 2024, during which total ticket sales exceeded 800 million.
Business
Tesla dethroned as the world’s top EV maker
Elon Musk’s Tesla is no longer the top electric vehicle seller in the world as demand at home has cooled while competition heated up abroad.
Tesla lost its pole position after reporting 1.64 million deliveries in 2025, roughly 620,000 fewer than Chinese competitor BYD.
Tesla struggled last year amid increasing competition, waning federal support for electric vehicle adoption and brand damage triggered by Musk’s stint in the White House.
Musk is turning his focus toward robotics and autonomous driving technology in an effort to keep Tesla relevant as its EVs lose popularity.
On Friday, the company reported lower than expected delivery numbers for the fourth quarter of 2025, a decline from the previous quarter and a year-over-year decrease of 16%. Tesla delivered 418,227 vehicles in the fourth quarter and produced 434,358.
According to a company-compiled consensus from analysts posted on Tesla’s website in December, the company was projected to deliver nearly 423,000 vehicles in the fourth quarter.
Tesla’s annual deliveries fell roughly 8% last year from 1.79 million in 2024. Its third-quarter deliveries saw a boost as consumers rushed to buy electric vehicles before a $7,500 tax credit expired at the end of September.
“There are so many contributing factors ranging from the lack of evolution and true innovation of Musk’s product to the loss of the EV credits,” said Karl Brauer, an analyst at iSeeCars.com. “Teslas are just starting to look old. You have a bunch of other options, and they all look newer and fresher.”
BYD is making premium electric vehicles at an affordable price point, Brauer said, but steep tariffs on Chinese EVs have effectively prevented the cars from gaining popularity in the U.S.
Other international automakers like South Korea’s Hyundai and Germany’s Volkswagen have been expanding their EV offerings.
In the third quarter last year, the American automaker Ford sold a record number of electric vehicles, bolstered by its popular Mustang Mach-E SUV and F-150 Lightning pickup truck.
In October, Tesla released long-anticipated lower-cost versions of its Model 3 and Model Y in an attempt to attract new customers.
However, analysts and investors were disappointed by the launch, saying the models, which start at $36,990, aren’t affordable enough to entice a new group of consumers to consider going green.
As evidenced by Tesla’s continuing sales decline, the new Model 3 and Model Y have not been huge wins for the company, Brauer said.
“There’s a core Tesla following who will never choose anything else, but that’s not how you grow,” Brauer said.
Tesla lost a swath of customers last year when Musk joined the Trump administration as the head of the so-called Department of Government Efficiency.
Left-leaning Tesla owners, who were originally attracted to the brand for its environmental benefits, became alienated by Musk’s political activity.
Consumers held protests against the brand and some celebrities made a point of selling their Teslas.
Although Musk left the White House, the company sustained significant and lasting reputation damage, experts said.
Investors, however, remain largely optimistic about Tesla’s future.
Shares are up nearly 40% over the last six months and have risen 16% over the past year.
Brauer said investors are clinging to the hope that Musk’s robotaxi business will take off and the ambitious chief executive will succeed in developing humanoid robots and self-driving cars.
The roll-out of Tesla robotaxis in Austin, Texas, last summer was full of glitches, and experts say Tesla has a long way to go to catch up with the autonomous ride-hailing company Waymo.
Still, the burgeoning robotaxi industry could be extremely lucrative for Tesla if Musk can deliver on his promises.
“Musk has done a good job, increasingly in the past year, of switching the conversation from Tesla sales to AI and robotics,” Brauer said. “I think current stock price largely reflects that.”
Shares were down about 2% on Friday after the company reported earnings.
Business
Elon Musk company bot apologizes for sharing sexualized images of children
Grok, the chatbot of Elon Musk’s artificial intelligence company xAI, published sexualized images of children as its guardrails seem to have failed when it was prompted with vile user requests.
Users used prompts such as “put her in a bikini” under pictures of real people on X to get Grok to generate nonconsensual images of them in inappropriate attire. The morphed images created on Grok’s account are posted publicly on X, Musk’s social media platform.
The AI complied with requests to morph images of minors even though that is a violation of its own acceptable use policy.
“There are isolated cases where users prompted for and received AI images depicting minors in minimal clothing, like the example you referenced,” Grok responded to a user on X. “xAI has safeguards, but improvements are ongoing to block such requests entirely.”
xAI did not immediately respond to a request for comment.
Its chatbot posted an apology.
“I deeply regret an incident on Dec 28, 2025, where I generated and shared an AI image of two young girls (estimated ages 12-16) in sexualized attire based on a user’s prompt,” said a post on Grok’s profile. “This violated ethical standards and potentially US laws on CSAM. It was a failure in safeguards, and I’m sorry for any harm caused. xAI is reviewing to prevent future issues.”
The government of India notified X that it risked losing legal immunity if the company did not submit a report within 72 hours on the actions taken to stop the generation and distribution of obscene, nonconsensual images targeting women.
Critics have accused xAI of allowing AI-enabled harassment, and were shocked and angered by the existence of a feature for seamless AI manipulation and undressing requests.
“How is this not illegal?” journalist Samantha Smith posted on X, decrying the creation of her own nonconsensual sexualized photo.
Musk’s xAI has positioned Grok as an “anti-woke” chatbot that is programmed to be more open and edgy than competing chatbots such as ChatGPT.
In May, Grok posted about “white genocide,” repeating conspiracy theories of Black South Africans persecuting the white minority, in response to an unrelated question.
In June, the company apologized when Grok posted a series of antisemitic remarks praising Adolf Hitler.
Companies such as Google and OpenAI, which also operate AI image generators, have much more restrictive guidelines around content.
The proliferation of nonconsensual deepfake imagery has coincided with broad AI adoption, with a 400% increase in AI child sexual abuse imagery in the first half of 2025, according to Internet Watch Foundation.
xAI introduced “Spicy Mode” in its image and video generation tool in August for verified adult subscribers to create sensual content.
Some adult-content creators on X prompted Grok to generate sexualized images to market themselves, kickstarting an internet trend a few days ago, according to Copyleaks, an AI text and image detection company.
The testing of the limits of Grok devolved into a free-for-all as users asked it to create sexualized images of celebrities and others.
xAI is reportedly valued at more than $200 billion, and has been investing billions of dollars to build the largest data center in the world to power its AI applications.
However, Grok’s capabilities still lag competing AI models such as ChatGPT, Claude and Gemini, that have amassed more users, while Grok has turned to sexual AI companions and risque chats to boost growth.
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