Why a record number of container ships are chilling off the California coast

Retailers are gearing up for the holidays season. However, record numbers of container ships trying import goods to the US are stuck off California's coast. This is another victim of the ongoing disruptions to global supply chains.
According to the Marine Exchange of Southern California (a record number), 65 vessels were waiting at the San Pedro Bay ports of Los Angeles and Long Beach on Sept. 16. Quartz was told by Captain Kip Louttit from the Marine Exchange that 23 of these ships were in a drift zone, meaning there is not enough room for them to anchor in water.

Over the past week, the number of containers awaiting entry to the bay has increased steadily and reached new heights every day. According to Louttit, AS SERAFINA arrived in Long Beach Aug. 25 and has been there for the longest time. According to Marine Traffic, the ship arrived from Shanghai and appears to have been delivering goods to companies like Samsung C&T America.

How will the shipping industry handle the end of lockdowns

Since March last year, shipping companies have had to deal with the effects of supply chain disruptions. This was after consumer demand dropped due to pandemic lockdowns. Ocean liners were also taken offline by manufacturers. The surge in demand from reopened countries has not yet been met by the shipping industry.

As the holiday season approaches, US imports are increasing. This is creating congestion at major ports across the country. According to a Bloomberg analysis, the number of container ships awaiting entry into the three top US ports has steadily increased since July.

Warehouses are becoming increasingly full due to increased cargo volumes and supply chain bottlenecks. Southern California has about 2 billion square footage of warehouse space. However, Gene Seroka (executive director at the Port of Los Angeles) told Bloomberg that warehouses are becoming overcrowded. Even when ships finally dock, there isn't enough room for them to unload their cargo.

He said that all parts of the supply chain were stacked up.

What does the container ship pileup for you? Seroka, speaking to CNBC on Sept. 16, said that the container ship pileup is a reminder to retailers to get holiday shopping done as soon as possible and allow for delays.

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