For those keeping an anxious eye on the global supply chain and domestic shipping, the current situation at the Port of Long Beach is a disturbing sign of continuing troubles for the foreseeable future. At the end of August 2021, a record number of container ships were at anchor or in a drift area waiting for their turn to enter the Southern California point, which is one of the major West Coast destinations for shipments arriving by sea from Asia. At that time, there were 46 freight ships waiting to enter the Ports of Los Angeles and Long Beach—by contrast, prior to the pandemic, it would be unusual to have more than one in that position. Given that this time of year normally sees an increase in shipping, there’s not much hope for a respite on the horizon.
The Ongoing Challenge in Logistics
This situation isn’t something new; rather, the backups at the ports and across logistics networks throughout the U.S. are due to the continuing effects of the COVID-19 pandemic. The national shipping network has been repeatedly stressed by lockdowns, labor shortages (from social distancing health protocols or employee absences from illness), and unpredictable flows of goods caused by starts and stops in manufacturing. The result has been delayed at every step.
Now a system already straining to keep up is facing a new challenge, as the upcoming holiday season brings an additional surge in the volume of goods arriving from China and other Asian countries. Most recently, the ports had to contend with a peak caused by stores rushing to stock up in time for the back-to-school shopping season. With some shippers moving their holiday imports earlier in the hope of avoiding delays later, it’s unlikely that there will be any pause for shipping to catch up before the end of the year.
Demand Outstripping Capacity
U.S. demand for overseas goods has grown at the same time as domestic shipping capacity has been reduced. Although there was a lull in shipping at the start of 2020, last year the Ports of Los Angeles and Long Beach moved a combined 17 million TEUs of containers, setting a record that they are forecast to exceed this year by an additional 2 million TEUs. [i] This impressive volume has a truck and intermodal networks struggling to keep up. Earlier this year, two rail companies temporarily restricted new shipments into their hubs in Chicago because containers could not be switched for onward transport fast enough to prevent a growing backlog there.
This isn’t the only place where containers have been stacking up. At APM Terminals in Los Angeles, the amount of time boxes are stored has gone up from a pre-pandemic 2 to 3 days to an average of 9 to 10 days before they’re moved inland. Delays in onward transport have also been driving up the cost of warehousing and making it harder to find available space. With only a few West Coast ports able to handle large volumes of containers needing to be sent on to distant inland locations, however, retailers and manufacturers have little choice but to wait.
Adapting to a Changing Shipping Market
The last 18 months have brought more than the usual amount of unpredictability to the domestic shipping market. The ongoing disruptions to the global supply chain make it clear that the challenges we’re seeing will continue at least through the holiday season this year.
Westset Logistics can help ensure that your goods won’t be stuck at the port once they’ve been cleared. Our drayage, 3PL warehousing, and distribution services will ensure your supply chain has minimal disruption once your shipment has been released. Volatile times demand flexible solutions—Westset is an expert supply chain partner skilled in adapting to the individualized needs of each customer. We support our clients with state-of-the-art technology, dedicated customer service, and the ultimate in operational efficiencies. To find out more about how Westset Logistics can keep your supply chain on track, contact us here now.
[i] https://www.wsj.com/articles/cargo-ships-are-again-idling-off-jammed-southern-california-ports-11629229285