Over 35 ships are waiting an average of seven days off the coast of Southern California to access its ports, pushing container carriers to contemplate other options. Continue reading as we discuss the congestion issues and the possible effect to the California economy.
San Pedro Bay Filled to the Brim
After filling both the ports and anchorages of Los Angeles and Long Beach, as well as 10 contingency anchorages in the next town south, remaining incoming ships have been allocated to drifting areas offshore. Although there is no maximum capacity for drifting spaces offshore, there are some safety concerns—not to mention the long wait times effecting the shippers’ costs.
Many shippers will need to invest in additional transportation spending in the first half of 2020 to find alternatives to these larger, more-congested ports. Some are even finding it more cost-effective to cancel shipments rather than let them mull around the California coast. In the meantime, California is missing out on an estimated 336,500 shipping containers worth of goods, and the importers and their customers on the receiving end are becoming frustrated due to the extended delays.
Congestion Causes and Future Relief
Delays stem primarily from the effects of the COVID-19 pandemic; infections have reduced the available port workforce, workplace restrictions have limited capacity, and fluctuating supply and demand have caught the logistics industry off guard.
The good news is that vaccine rollouts should bolster the workforce and reduce workplace restrictions. However, this process could take several months, and other factors such as stimulus check dispersal will only further increase consumer demand.
Retailers have also added to the pressure on the industry. For months they have been trying to restock their inventories that are frequently being depleted as consumer demand continues to grow, but the resulting wave of imports is proving too much for the understaffed ports.
Additionally, this time of year would typically be a post-holiday wind-down period, supported by a reduction in Asian manufacturing for the Lunar New Year. However, China continued production through the Lunar New Year. The combination of restocking retailers and Chinese stamina are turning this year’s peak season into a constant influx that may extend for some time as shippers work to catch up with demand.
The port congestion issue and the resulting delays seem to be sticking around for the next several months, making managing your supply chain and meeting your customers’ demands even harder. While a third-party logistics company, like ClearFreight, won’t necessarily make your freight arrive any faster, we can provide you with the peace of mind knowing that your freight is being monitored and managed, and that we always have your back. Contact our team today to hear how we can support your business’s supply chain and offer you logistics solutions tailored to your needs.