US manufacturers and retailers gave orders in bulk leading to major ports being jammed and making large ships to wait for their turn.
The Port of South California is faced with a surreal sight nowadays, evocative of upscale terms like globalization, international trade, global supply chain, sea-borne trade, gigantic logistic framework, freight management, marine trade, liberalized markets, international seas etc. Actually, a flotilla of different sizes and shades with all types of goods (finished and unfinished) on board, are stacked at the port, looking for their turn to unload goods ordered.
This results from a heavy congestion felt across the length of port of South California ahead of peak holiday season, which retailers and manufacturers strive to stockpile goods for.
In other word, as the year-end approaches which is actually a major holiday season across the western world, retailers and manufacturers ramp up their activities to brace up for the popular demands, by sourcing the needed stuff from across the oceans.
Going by the reports from Marine Exchange of Southern California, thirty-seven containers ships lie in wait for their turn off Southern California’s berths which are currently heavily jammed due to heavy imports in domestic logistics framework which has stymied operations at what is considered to be the biggest US gateway for seaborne commerce.
In southern California, these are the two ports, manage one-third of America’s whole marine trade, and just sometime ago, nine ships were anchored therein, while in normal times, the number remains either one or zero.
In the opinion of those managing the ports, the strong perception of uncertainty appears in global supply chains which is due to Covid-19 pandemic and shippers have just augmented it through heavier imports that center-around holiday imports so as to prevent any late deliveries later.
Swimming through the rumors, Gene Seroka, Director at Port Of Los Angeles, said, “American importers are bringing in cargo earlier “knowing that it probably will take longer to get it into their systems,”
Congestion taking place at the West Coast is certainly a hurdle, as ports have to face rising demand on one end, but feel helpless with limited workers and devices owing to health and safety measures caused by the pandemic. In Chinese ports too, similar sight emerged twice, as dozens of ships waited at anchor which was due to operational decline following coronavirus outbreak.
Clearing air on earnings, Kasper Rorsted, Adidas AG said, “These challenges have been leading [to] significant delays and additional logistics costs, particularly as we’ve been making more use of airfreight.”
But this is the high dollar amount attached to airfreight which dissuades many shippers, while liner companies also skip the option of opting for less busy seaports, as many of the ships are destined for inland destinations which are a different sea route altogether.
“Sometimes you accept the wait time,” said Nils Haupt, a spokesman for German container line Hapag-Lloyd AG . “The port is too important.”
The Southern California port complex is, undoubtedly the most strategic one, as it is connected to key Midwestern freight hubs in Chicago through railroads and handles a great amount of cargo.
Mario Cordero, Executive Director at Port of Long Beach revealed, “Last year, the two ports moved a combined record 17 million 20-foot-equivalent units, or TEUs, of containers, despite a Covid-related slump in the first half of 2020. This year, the ports are forecast to surpass that and move a combined 19 million TEUs”.
The pressure felt in imports is abounding and results in a lot of other crisis, such as warehouses rents coupled with transportation costs too. Just previous month, major railroads taking containers from the ports, had to stop shipments sourced from Chicago, as there was a huge concentration of boxes at their Midwestern centres and fast arrival of containers made it hard to send them forward for eventual distribution.
Mr. Boyd, spokesman for Maersk, whose 6 container ships await berth at the anchor, says, ”Now, as the containers pile up at the marine terminals, crush truck and railway capacity. At APM Terminals in Los Angeles, boxes are kept for upto maximum 10 days before they are sent inland, while before pandemic, they were kept for not more than 3 days”.
Mr. Boyd opined,” “There’s nobody to blame for this, We don’t have unlimited capacity of ships or railcars or trucks in the supply chain, so what you are seeing is just immense cargo volumes coming in every week and the system has slowed.”