A cargo ship docks at the Port of Los Angeles
A fleet of 20 cargo ships sat anchored just south of Los Angeles on Tuesday, waiting for space to dock at the San Pedro Bay Port Complex.
Even for the busiest twin ports in the western hemisphere, the past few months have been chaotic. Containers could be seen piled six high across jam-packed terminals as labourers grappled with a lack of warehouse space that has effectively killed the pace of a supply chain that is critical to the global economy.
“There’s been so much consumer buying that we are seeing a double whammy with manufacturers, retailers and cargo owners ordering more items from Asia to replenish their warehouses or shelves, but also ordering in for Christmas,” said a Port of LA spokesman. “It is hard to keep pace”.
A perfect storm of political, weather and virus-related setbacks has left the businesses who rely on America’s twin ports of LA and Long Beach furious. Retailers have been left with empty shelves of sold-out items and farmers with rotting vegetables and nuts that should be on their way to Asia.
Weston LaBar, chief executive of the Harbor Trucking Association, described “extreme conditions” for truckers who are losing 50pc of their daily income thanks to delays moving items because of terminal congestion.
This has ripple effects for farmers in California’s Central Valley, one of the country’s biggest food producing areas. They are struggling to get Asian exports such as fruit and nuts to market as well as to retailers who are unable to restock their shelves or warehouses for deliveries.
The ships may be at a standstill but the 15,000 longshoremen, along with some of the 18,000 registered truckers at LA port alone, continue to work day and night while adding on extra time for cleaning and social distancing as part of new health and safety restrictions. Inefficiencies have led to frustration from those who work in the delicate shipping ecosystem.
“It is tough, some of the seafarers have to spend months in the ocean in limbo, staring at where they are supposed to dock,” said Jessica Alvarenga, Manager of Government Affairs at the Pacific Merchant Shipping Association.
The pandemonium can be explained by issues stemming from the early days of the pandemic, which led to a plummet in cargo volume from across the Pacific Ocean.
As the global economy opened and China’s factories switched the lights back on in the summer, the backlog caught up with the US, much faster than it could handle. There has been a surge of imports as retailers like Walmart and Amazon restock their shelves and warehouses ahead of the Christmas shopping frenzy. Meanwhile, e-commerce is soaring as consumer spending booms.
Trucks wait to be loaded at the West Basin container terminal in the Port of Los Angeles in San Pedro, California
This spike in demand, along with staffing shortages due to Covid-19, has put a strain on trucking resources. In addition, cargo owners and storage companies that have gone bust are taking up warehouse space, as are companies that ordered in bulk for items that consumers no longer need, such as school uniforms.
The difficulty finding chassis and containers is compounded by the lack of space, leading to piles of 40ft containers that can only be accessed by specialists with cranes.
There is a squeeze on both sides of the port, however, as ships are expecting to berth quicker than ever so they can return to China, load up and bring items back to the US.
The chilling effect of Donald Trump’s trade war has seen exports at the port drop in 22 out of the last 24 months, an LA port spokesman said.
“We are getting this import surge from Asia and the importers want the empty boxes turned around and brought back quickly, but nothing is going out so it has created this imbalance of trade which makes it hard for round trip economics for the shippers,” he added.
In addition, Mr Trump’s tariff exemptions are due to expire at the end of the year and businesses are not sure what president elect Joe Biden’s new policies will be.
The dwell time has gone from three-and-a-half days to seven, Mr LeBar claimed. And as of Tuesday, there were 47 ships at the ports of LA and Long Beach waiting just off the port with an additional 27 docked. “It is astronomical,” he said.
It has become a joke that large freight forwarders are sending ships from Asia to the other side of the US to get it to a warehouse faster than if they took the direct route to LA.
Any hope that the storm may ease by January seems naive, with most expecting the chaos to last until at least after the Chinese new year, in February.
“Shippers say it is impossible for them to catch up and restock their shelves so it’s kind of like a dog chasing its tail,” said Mr LeBar. “It never quite catches it.”
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