There were 48 ships laden with goods destined for store shelves across the United States sitting at anchor in southern California’s San Pedro Bay on Wednesday.
In normal times, these massive cargo ships would have made their way from factories in China and other Asian nations directly to a dock at the ports of Los Angeles or Long Beach, the busiest seaport complex in the US.
Today, they are spending an average of more than seven days sitting at anchor as dockworkers in southern California struggle to keep up with a surge in imports brought on by a pandemic-induced buying boom while parts of their workforce are recovering from the coronavirus.
“We’re happy to keep working because that is what we do, we’re hard-working people,” Henry Pollard Jr, a tophandler driver who has spent the past 15 years working at the ports. “We just need more skilled labor to help unload all the cargo.”
The backlog at the ports of Los Angeles and Long Beach – along with nearly every other port in the US – has been exacerbated by the spike in coronavirus cases in southern California tied to the holiday season. Of the 15,000 dockworkers at the two ports, about 800 have in recent weeks been infected with the coronavirus – a number representing just over 5% of the ports’ total workforce.
Overall, the workforce at both ports has seen almost 1,000 coronavirus infections and reported at least 12 deaths tied to the pandemic.
“We’re a full year into a global pandemic, and longshore workers have seen both record-breaking cargo imports and the heartbreaking deaths of our colleagues,” Mike Podue, president of the International Longshore and Warehouse Union, Local 63, said on the union’s website. “These losses connect us all on an emotional, visceral level.”
Following a concerted push from both port officials and union leaders to have longshoremen and warehouse workers classified as a priority group to receive the Covid-19 vaccine, California authorities agreed and allowed workers at the ports to begin to be inoculated starting on 12 February.
About 800 longshoremen were the first workers at the ports to receive shots of the Moderna vaccine at a clinic quickly organized by the Long Beach department of health and human services. Port officials said they were hopeful that with the recent approval by the US Food and Drug Administration of the Johnson & Johnson single-dose vaccine – along with the ramping up of production of both the Moderna and Pfizer vaccines – that the ports will be able to operate with a full workforce in the near future.
“We’re not there yet, but it’s on everybody’s radar and we’re simply trying to highlight the inventory as it becomes available,” said Gene Seroka, the executive director of the port of Los Angeles.
Seroka, however, cautioned that even having 100% of both longshoremen and dockworkers able to unload cargo would not solve the crisis caused by the surge of imports coming to US shores.
“We have so much cargo that you need more than 100% to get the job done,” he said.
It’s a dramatic turn from the first months of the pandemic, when the Chinese government issued its stay-at-home orders as Covid-19 began its global spread – a move that effectively shut down the manufacturing industry of the US’s largest supplier of imported goods. In 2019, Chinese imports to the US totaled $451.7bn, accounting for over 18% of all goods imported to the US, according to the Office of the United States Trade Representative. In the spring of 2020, the volume plunged.
“In the first five months of the year, through May, our cargo volume was down 19% and the available work on the docks was about the same percentage,” Seroka said. “So truck drivers, the longshoremen, warehouse people – all those guys had less work opportunities.”
Pollard, too, said things got a “little rough” during the first months of the pandemic.
“You’ve got a family and you’ve got to take care of that family, so that was your major concern,” Pollard said.
He added, however, that many dockworkers at the time assumed the downturn would be similar to the annual slowdown around the Lunar New Year.
And while it lasted longer than that, it quickly made a swift change of course last summer as Americans began dishing out dollars normally spent on dinner and movie tickets on consumer goods. Despite the high unemployment figures and overall economic insecurity, people were spending money on everything from sneakers and handbags to home goods and new cars.
A US commerce department report from last summer found that consumer spending jumped 6.5% in June 2020 and another 1.9%in July. And those numbers continue to remain high, with the commerce department reporting that consumer spending increased the largest amount in seven months in January amid new pandemic relief money to low-income households and a drop in the number of new Covid-19 infections.
The spike has left the ports in a precarious situation, said Tony Nuzio, the founder and CEO of ICC Logistics Services, a New York-based transportation and logistics consulting firm.
On one end, manufacturers in Asia are churning out products to meet the growing demand in the US and quickly shipping their goods across the Pacific. In many instances, shipping lines are making the return journey to Asian ports with empty containers – a move that speeds up their return to Asia but has angered American farmers, who say they are both losing out on overseas sales and being hit with rising costs.
In January, the number of empty containers leaving the port of Los Angeles for Asia increased 14.5% compared to January 2020.
Ports are also dealing with problems on the domestic front, namely a lack of space.
With longshoremen in southern California being inundated with record amounts of new cargo on a daily basis, warehouse workers are also struggling to find room to store the deluge of containers. There is nary a warehouse within 60 miles of the two ports that is not filled to capacity and, at both the port and in warehouses, the time it takes for trucks to haul them away has more than doubled compared to before the pandemic.
At the port of Los Angeles, for example, containers are currently sitting at the dock for an average of five days, compared with around two days before the surge. In off-site warehouses, those times climb higher, with containers sitting for around eight days instead of the standard three and a half days.
“More thought really should have been put into how people in this country get their products,” Nuzio said. “When this is over, maybe it’s time to pause and re-evaluate how we do things.”
While the surge, and resulting backlog at US docks, has resulted in sleepless nights for port workers and executives trying to figure out how to unload all the cargo, it has raised fears for the financial viability of companies and the looming threat of soaring prices for consumers on both sides of the Pacific.
Businesses in Asia worry that they won’t be able to secure the containers needed to ship their goods to the US, while their buyers stateside voice concerns that their shelves will remain empty. These scenarios are already playing out in US stores, where spot shortages of goods like household appliances and some clothing saw the cost of imported goods from China rise in December by 0.3%, the largest one-month gain in over three years.
“It’s the law of supply and demand,” Nuzio said. “On the bright side, it looks like we’re getting to a solution. Are we out of the woods yet? No, but we’re getting there.”
Seroka and other port officials across the US have said that while the surge will continue well into the second quarter of 2021, the availability of more vaccines paired with putting pressure on the retail and import communities to pick up their shipments as quickly as possible will help ease the pressure.
In the meantime, southern California ports are also selectively metering out ships to other nearby ports in an attempt to stem the backlog.
“It does not do the American supply chain any good if we just keep stacking up ships,” Seroka said. “So ships we can allow are going to other ports, but in very small, small percentages.
He added: “It is allowing us some breadth and depth to catch up.”
Seroka estimated that southern California’s ports will be able to clear up the backlog sometime my mid-summer, but warned that if the pileup of cargo is not resolved, there could be dire consequences when consumer spending ramps up even more for next winter’s holiday season.
“We’ve got to be prepared for that because if we don’t get out of this and then the cargo takes another uptick, that’s going to spell a lot more complications than even this equation we’ve got going right now,” he said.
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