- Off the coast of Los Angeles, more than two dozen container ships filled with exercise bikes, electronics and other highly sought imports have been idling for two weeks.
- In Kansas City, farmers are struggling to ship soybeans to buyers in Asia. In China, furniture destined for North America piles up on factory floors.
- Around the planet, the pandemic has disrupted trade to an extraordinary degree, driving up the cost of shipping goods.
- The virus has thrown off the choreography of moving cargo from one continent to another.
A recent news article published in the NY Times written by Peter S. Goodman, Alexandra Stevenson, Niraj Chokshi and reveals that the pandemic has disrupted international trade, driving up the cost of shipping goods and adding a fresh challenge to the global economic recovery.
The Havoc Begins Like This
More than a decade ago, during the global financial crisis, shipping companies saw their businesses savaged.
As a mysterious virus emerged in China early last year — prompting the government to shut factories to contain its spread — the shipping industry braced for a replay. Carriers cut their services, idling many of their vessels.
Yet even amid the downturn, orders surged for protective gear like surgical masks and gowns used by frontline medical staff, much of it made in China. Chinese factories ramped up, and container ships carried their products to destinations around the planet.
Unlike the financial crisis, when the economic recovery took years to gather force, Chinese factories came roaring back in the second half of 2020, yielding robust demand for shipping.
Classic Supply and Demand Issue
Another U.S. importer, Highline United, which imports women’s shoes from China and Hong Kong for brands like Ash and Isaac Mizrahi, is paying more than five times its usual price for shipping.
“It’s a classic supply and demand issue,’’ said Kim Bradley, the chief operating officer of the company, which is based in Dedham, Mass.
Traffic Backs Up at California’s Jammed Ports
At the twin ports of Los Angeles and nearby Long Beach, unloading has been slowed by a dearth of dockworkers and truck drivers as the virus has sickened some while forcing others to quarantine.
“It is anticipated that the backlog in volume will remain until midsummer,” the director of the Los Angeles port, Gene Seroka, said at a recent board meeting.
The ships off Los Angeles have exhausted available anchorage spots, resorting to so-called drift boxes — zones where they float freely, like planes circling over congested airports.
Major consumer brands — from the sportswear-maker Under Armour to Hasbro, the game and toymaker — have been dealing with shipping bottlenecks.
Rearrangement of Their Schedules
Some shippers have rearranged their schedules, stopping off in Oakland, Calif., 400 miles to the north, before continuing to Los Angeles.
But containers are stacked on ships in configurations set by their destinations. A sudden change in plans means moving the stacks around like a Jenga game.
And the port in Oakland is dealing with its own pandemic problems. Dockworkers are home tending to children who are not in school, said Bryan Brandes, the port’s maritime director.
“In normal times, vessels come directly into Oakland,” Mr. Brandes said. “Right now, we’re ranging anywhere from seven to 11 vessels at anchorage.”
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Source: NY Times
