Shipping is clogged at many major American ports as corporations buy ahead to beat inflation and high holiday demand. Paul Berger reports in The Wall Street Journal:
Container ships are stacking up again off Southern California’s jammed ports, as a flood of imports and logjams in domestic logistics networks hit operations at the biggest U.S. gateway for seaborne trade.
Thirty-seven container ships were anchored off the adjacent ports of Los Angeles and Long Beach in recent days, according to the Marine Exchange of Southern California, the highest number since February, when 40 ships waited there.
Aboard are hundreds of thousands of boxes stuffed with goods bound for manufacturers and retailers as U.S. businesses hustle to restock inventories and prepare for the holiday shopping season. Just a couple of months ago, the number of container ships at anchor in the two ports, which together handle more than a third of all U.S. seaborne imports, had dwindled to nine. In normal times, the number is one, or none.
Leaders of the two ports say the armada of cargo ships is due to surging volumes and unpredictability in global supply chains caused by the Covid-19 pandemic, and exacerbated by shippers pulling holiday-season imports forward to avoid delays later.
American importers are bringing in cargo earlier “knowing that it probably will take longer to get it into their systems,” said Port of Los Angeles Executive Director Gene Seroka.
The West Coast congestion is one of a number of global bottlenecks as ports juggle strong consumer demand and shortages of workers and equipment caused by pandemic-related health and safety measures. Twice this year dozens of container ships had to wait at anchor in major Chinese ports because of slowdowns in operations after coronavirus outbreaks.
Some shippers have sought alternatives to ocean carriers.
“These challenges have been leading [to] significant delays and additional logistics costs, particularly as we’ve been making more use of airfreight,” Adidas AG Chief Executive Kasper Rorsted said on a recent earnings call.
Action Line: You should also consider purchasing ahead what you can in the face of inflation and possible supply disruptions as the world becomes a riskier place. Keep your finger on the pulse of risk in America by clicking here to sign up for my free RAGE Gauge alert.
E.J. Smith - Your Survival Guy
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