The Shipping Crisis and Why You’ll be Waiting Awhile for that Online Order
You would have to have been living under a rock to not hear about how the world’s supply chain is being stretched thin and over worked like never before; this strain has resulted in shortages and delays in everything from semiconductors, to cars, sneakers, iPhones, and even some items at the grocery store. Initially this was because factories in Asia and other high producing countries had to close for weeks and in some cases even months because workers were sick with the coronavirus or employees didn’t show up to work out of fear of catching it. That was true and still is the case in most countries like Vietnam.
Now the pain points have shifted to cargo ships. We are experiencing a massive, unprecedented hold up of our largest sea vessels that are carrying some of our countries most basic goods; let alone custom orders from overseas, international imports and even other domestic imports.
One could call it problematic that 90% of the world’s global trade is shipped by sea, with 70% of that being in shipping containers. It’s how American businesses have shaped their structure over the past 20 years.
The United States have been increasing our outsourcing and reliance on imported goods over the past 2 decades. In January the US imported $293 million of goods from China; Now flash forward to today our imports from China total nearly $43 billion. That’s 14575.77% increase 36 years. Prior to the pandemic, the global supply chain in Asia has been running at full capacity with no margin for error. When the Pandemic hit last March, all of the factories were forced to close due to overwhelming outbreaks and fear of outbreaks. This caused a huge ripple.
“When you have a problem anywhere in the supply chain, it’s going to have a ripple down effect, like playing dominoes,” says Cathy Roberson,founder and president of supply chain consulting group Logistics Trends and Insights LLC
If a freight is late arriving at port, that means the time scheduled for the truck to be at port is wrong; now you have to go back and reschedule. That will cause additional delays and costs; and companies are usually forced to put the items in a temporary warehouse if they can even find a space. From there, once you finally get a truck, moving it inland you have to constantly reschedule delivery times. Having to juggle and monitor that takes time, people, and costs a lot of money.
Long Beach, CA is our largest port, importing more than 36% of our nation’s cargo containers. That have been unloading record amounts of cargo and that also happens to be where the biggest pain point is. The shipping crisis in California is now so bad that officials are declaring a state of emergency. With the amount of cargo needing to be unloaded and now with the labor shortages, they seem to almost be at a standstill. As of Monday, there were over 100 ships waiting to be unloaded; 97 of those were container ships carrying cargo that had inventory and imported goods intended to go to retail shelves for the holiday season. They will now more than likely miss that window and shelves will remain empty. Prior to the pandemic, the ports’ highest record had been 17 ships waiting to anchor; that is 488% increase. Some companies are so desperate that they have charted cargo planes totaling over 2 million dollars (more than double prior to Covid) a flight just to get their inventory into the US in time for the shopping season. They don’t see this ending anytime soon as it will take months and even possibly years to catch up to where they sat prior to the pandemic.