Analysis: Ports of Los Angeles and Long Beach Face Another Year of Supply Chain Disruptions
For more than a year now, the world supply chain has been in trouble. Due to a domino effect -- increased consumerism, cargo delays, equipment shortages, and a lack of workforce -- these troubles are not expected to subside anytime in the foreseeable future.
In this light, today, we will do a brief analysis of the port of Los Angeles and Long Beach -- two of the hardest hit -- both of which face another year of supply chain disruptions.
What Is Going On
There is no way around it; we are in an age of consumerism. Although typically a good thing for the economy, for ports like Los Angeles and Long Beach, it’s been a nightmare.
In a recent press release, the CEO of Container X Change stated that “data reveals 60% increase in the inbound outbound ratio at the ports of US West Coast, surpassing the pre-covid levels, indicating that there is excessive stress on the ports, and therefore indicating further congestion is expected in the coming months as we approach the holiday season in the latter part of the year.”
What To Expect
Extended Hours: According to the Daily Breeze, both “Los Angeles and Long Beach will expand terminal gate hours for truckers, and nighttime and weekend hours for longshore crews in an effort to get freight moved.”
High Surcharges: Desperate to get ahold of the situation, many providers are implementing extra costs at various parts of the supply chain. For example, the ports of Los Angeles and Long Beach announced earlier this week that they will begin charging ocean liners $100 per container, for containers scheduled to move by truck that have dwelled for nine days or more, and six days if scheduled to move by rail. These fees will likely be passed on to importers and shippers.
Route Changes: Instead of shipping into Los Angeles or Long Beach, companies are scrambling to find better options. This trend is highlighted in an article from Long Beach Business Journal: “Beneficial cargo owners (companies such as Levi Strauss) don’t typically publicly announce when they leave ports or regions but Alvarenga said it is likely others have pulled back out of West Coast ports due to the delays, opting instead for East Coast ports and more expensive air freight.”
Private Charters: large U.S. retailers such as Home Depot, Costco, and Walmart have resorted to chartering private cargo ships in order to stock their shelves.
As we move forward into the year ahead, it is hard to tell exactly what will happen in the west coast ports; however, what we do know is that it will continue to be a rocky time. That said, if you would like to stay informed and optimize your logistics, Clear Freight is here to help. Contact us today for unique solutions to unprecedented supply chain disruptions.