You can see what happened at the California ports this week if you want to see what a global supply-chain crisis looks like.
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According to the Guardian, more than 100 ships were waiting in Long Beach and Los Angeles for their cargo, a record number. The traffic surge is astonishing for a complex that used to see less than 20 ships at anchor before the pandemic. This isn't something that's new for the port complex. It has been on a record-breaking streak of months.
According to the outlet, in June, Los Angeles was the first port in the Western Hemisphere to receive 10,000,000 container units within a 12-month period. The port of Los Angeles had its busiest September in years last month. Long Beach is also expecting the port to handle more than nine million containers this year. This would be the largest ever recorded at the port.
Mario Cordero (executive director of Long Beach port) advised people on Thursday to start shopping for holiday gifts in advance due to the crisis. Long Beach and Los Angeles are the nation's first and second largest ports. They handle 40% and 30% respectively of container imports to the U.S.
Cordero explained to Bloomberg that these bottlenecks and delays will continue until the end of the year. There are some mitigation factors that may help.
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However, not all experts recommend that consumers or retailers or manufacturers follow Corderos' advice. CNBC discovered that manufacturers and retailers have been ordering too soon or overordering during this crisis. This is only making matters worse.
RBC Wealth Management stated in a mid-October note that the problem is well-known and that orders for raw materials, components, and finished goods are being placed earlier than usual. This is creating a vicious circle, according to CNBC.
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The Biden administration has been trying to turn the tide on the crunch. This is due in part to a shortage of drivers, trucks and warehouse workers at the nation's ports. It has taken several initiatives to increase the capacity at Long Beach and Los Angeles ports, as well as moving to a 24/7 schedule. The nation's three largest goods carriersWalmart and FedEx will also be operating on this schedule. CNN reported that the administration is considering deploying the National Guard in order to ease the crisis.
High prices and long wait times are bad news, but supply chains and shipping crises are worse for the planet. The delay in unloading cargo from ships can cause pollution, which is why there are so many ships anchored. Shipping alone is responsible for 2.2% global carbon emissions. One study found that one container ship emits as much pollution as 50 million cars.
