Global supply chains are congested. And in California, the United States, this is evident.
A record number of vessels carrying containers they stand in line in front of the main ports of one of the richest states in the country.
“We are facing an unprecedented cargo surge at the ports of Long Beach and Los Angeles due to the major production shifts of the global pandemic and decades-long supply chain challenges,” says the Mayor of Long Beach, California. .
What is causing the jams?
How bad is the congestion?
Satellite images over the ports of Long Beach and Los Angeles show a swarm of dormant ships, waiting to unload the merchandise.
They are ships that carry containers with merchandise of almost everything you can imagine – from toys to tennis rackets – from Asia across the Pacific Ocean to the western coast of the United States.
Marine Traffic, a ship-tracking website, counted more than 50 vessels off Long Beach and Los Angeles on October 13, but the record of 73 was reached in September.
These two ports handle most of the cargo coming from China, so once congestion starts, it can quickly get worse, says Janet Porter, chair of the Lloyd’s List editorial board.
“The whole shipping cycle has slowed down. So there are ships waiting days, even a couple of weeks to unload, ”he says.
In the first eight months of the year, there was an increase of approximately 25% more in the shipment of cargo to the United States from Asia compared to the same period of 2019, before the pandemic, according to Container Trades Statistics.
Volumes have remained practically the same between Asia and Europe.
On the east coast, there were also queues of ships outside the port of Savannah, Georgia.
Then there is the process of transporting the goods inland from warehouses filled with containers by a workforce affected by the pandemic.
On the supply side, blocked ports in China and elsewhere have also contributed to the shortage.
Have Americans bought more things?
Yes, instead of going on vacation or going out to dinner.
Demand for consumer goods is generally 22% higher compared to pre-pandemic levels (when February 2020 is contrasted with August 2021).
The Capital Economics group observes important increases in imports of toys and sporting goods (74% more), as well as household appliances (49% more).
Several factors led to an increase in imports, explains Professor Christopher Tang of the University of California, Los Angeles.
“Today, many ocean carriers carry goods. It’s billions of dollars in Halloween and Christmas decorations, like artificial trees and lights. “
Professor Tang also says that one cause of the lawsuit is pressure from the United States for a Economic recovery.
As companies encourage employees to return to the offices to work in person, there is a huge increase in demand for office equipment ranging from computers, printers, and servers, with many of them now stuck in various containers of Asia.
This is in addition to office equipment adapted to reduce the spread of the coronavirus.
“Many air filters along with ventilation equipment are also in these containers waiting to be unloaded,” says Professor Tang.
And there is another problem: the lack of skilled dock workers, truck drivers, and rail personnel to move everything, lists Gary Hufbauer of the Peterson Institute for International Economics.
“In large part, this is because of the Delta variant, but also because of the retirement, particularly of truck drivers,” he adds.
Could any of this have been avoided?
“I don’t think anyone anticipated this huge increase in demandespecially after the ships were paralyzed during the pandemic, ”says Porter.
The sight of ships waiting off the California coast has sparked deeper debates about the state of American supply chains.
For a long time there were demands to upgrade the infrastructure in general.
The White House chief of staff reported that the Joe Biden administration is tackling the “supply chain mess” they inherited.
Experts point out logistics capacity problems in US ports that were already present before the pandemic.
“This showed years of inappropriate investment. Port capacity is not deteriorating quickly, but there was probably less than a 5% margin for spare capacity, ”says Hufbauer.
The US government created a task force to try to alleviate bottlenecks and the Port of Los Angeles will now be open longer to improve the situation.
But industry experts don’t expect the problem to end anytime soon.
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