- 21 ships were anchored off the coast of Los Angeles and Long Beach waiting to dock on Wednesday.
- The California ports are congested and account for about one-third of US imports.
- The delays are just the latest in a host of supply-chain issues.
According to an article published in Business Insider, a supply-chain crisis is quietly brewing off the coast of Southern California as massive freighters wait for dock space to open up.
Marine Exchange Data
California ports in Los Angeles and Long Beach account for about one-third of US imports. These ports operate as a primary source of imports from China and have been heavily congested for months.
On Wednesday, 21 ships were anchored off the coast waiting for a spot to open up to unload at Los Angeles and Long Beach ports, according to data from the Marine Exchange of Southern California.
Executive Director’s Voice
The Southern California ports are facing more congestion than ever, Kip Louttit, executive director of the Marine Exchange of Southern California, told Insider.
“The normal number of container ships at anchor is between zero and one,” Louttit said.
Some of the container ships have been waiting off the shore for weeks. One of the vessels has been at berth since April 3. Of the ships waiting to dock, half of them are what Marine Exchange calls “mega-container ships” or ships with the carrying capacity of 10,000 TEUs.
“Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago,” Louttit told Insider. “They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo.”
Ship’s Supply Materials
The ships carry millions of dollars worth of popular imports, including furniture, auto parts, clothes, electronics, and plastics, according to data from the Port of Los Angeles. Supplies of these materials could be heavily depleted in the US due to the backlog of ships.
Imports Spike
Louttit said increases in consumer spending and, as a result, a spike in imports, have overwhelmed the ports.
“The ports are setting records moving cargo,” Louttit said.
California Port Backlogs
California’s port delays seemed to have peaked in early February but have persisted in recent months.
On January 30, Southern California port congestion hit a record high when 38 container ships were waiting along the coast for room to open up to dock and unload.
Gene Seroka, a Port of Los Angeles executive, warned the Los Angeles Board of Harbor Commissioners in February that high import levels caused by increased spending during the pandemic were driving port congestion.
Shipping Delays
The boats waiting outside of the port, which can carry tens of thousands of shipping containers, are adding to a global container shortage, and, as a result, shipping delays.
Customers are already seeing the impact of shipping delays. During a third-quarter earnings call in February, La-Z-Boy executives said customers should expect delivery dates that are five to nine months out from the purchase date.
Container Shortage Impacts
February’s Texas freeze and a shortage of computer chips have already pushed companies to increase prices and delay production. Several companies including Nike, Honda, and Samsung have already said they have been hampered by supply-chain issues.
As a result of California port delays and the global container shortage, customers will likely face rising prices and limited options as commodities become increasingly difficult to obtain and produce and companies are forced to compete for containers and delivery dates.
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Source : Business Insider
