Everything you’re waiting for is in these containers


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The neighboring ports, a mere two nautical miles from each other, are the two largest in the country, measured by containters handled — with Los Angeles holding the top spot.

Imports from Asia that you find in your home — including clothes, shoes, furniture, toys and everyday household goods such as kitchenware, cleaning supplies and food — flood in through the ports. They arrive in 20-foot long, or more commonly 40-foot long, steel shipping containers.

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Many of the containers hold the parts and raw materials that US factories need to build their products domestically, including automobiles, aircraft and appliances. There is no such thing as a completely American-built car, for example, and Asia is a major source of many of those imported parts.

After the containers are unloaded, they are hauled away by truck or rail cars to warehouses and distribution centers, factories and stores.

Long wait times to move the goods

Container ships are anchored by the ports of Long Beach and Los Angeles as they wait to offload.

Before the congestion problems started in mid-2020, ships arrived off the coast of the two southern California ports and went straight to berths to offload their containers and get new ones loaded back in their place.

Not anymore.

As of Tuesday morning there were 62 container ships anchored off the coast of southern California — 37 of them destined for the Port of LA and the other 25 destined for Long Beach. The 62 ships contain the equivalent of about 200,000 20-foot containers. Overall there were a record 100 cargo vessels — including barges, tankers, car carriers and ships that carry bulk goods — anchored just outside the ports as of Monday.

The average waiting time for ships to dock at port is about 10 days. And once they are unloaded, many of the containers will sit at the port for a week or more before anyone shows up to take them on the next leg of their journey.

“It’s like taking 10 lanes of freeway traffic and moving them into five when the cargo gets here,” Gene Seroka, executive director of the Port of Los Angeles, told CNN International recently. “We’re having difficulty absorbing all of that cargo into the American supply chain.”

Wait times have grown longer for ships to dock and unload cargo at other ports around the country. But, because of their size and importance to the national economy, the problems in Los Angeles and Long Beach have attracted special attention. About 40% of container traffic entering the United States comes through one of the two southern California ports.

Even if you live on the East Coast, many imports from Asia that you buy will enter the country through one of the two ports. Traditionally it’s been faster and cheaper for a ship to deliver a container to the US West Coast and then have it hauled across the country by rail, rather than sail the container ship from Asia directly to the East Coast.

That is why the gridlock that has gripped the ports for more than a year is affecting so much of the nation’s economy:

Businesses such as Nike (NKE) have cut back their sales and earnings targets because they’re concerned about shipments they were counting on in time for the holidays.

What caused the problems

A cargo ship heads out to the ocean. Global supply chain disruptions have continued to hurt the US economy.

The root of the problem is not simple to pinpoint. But as with so much about the US and global economy, it starts with the Covid-19 pandemic, which caused a colossal shift in Americans’ buying habits.

Spending on services, including travel, entertainment outside of the home and even eating out, was sharply curtailed. Although some of that has rebounded, most of the spending on services has yet to return to pre-pandemic levels.
So people who were trapped at home spent more on goods than services during the pandemic, and goods need to move from one place to another before they get to your home. The systems set up to move all of that freight have been strained beyond their breaking points.
The global demand for goods has created all types of imbalances and shortages in global ocean shipping networks. The humble shipping containers, which were never meant to be on ships anchored outside of ports for days at a time, have been in short supply. And space on ships have been at a premium, driving up shipping prices.
Costco (COST) disclosed last month that it has chartered three container ships, each with capacity to carry 800 to 1,000 containers at a time, to move the goods it needs from Asia to its stores.

Problems reach far beyond the ports

Trucks transport cargo containers, but truckers are hard to come by.
A reason the US supply chain can’t handle this much freight is the massive shortage of workers needed to move it all.

Unionized longshore jobs pay well, and employment is up at both both ports, allowing them to handle more cargo than in the past. The ports are expected to easily set records for the amount of cargo passing…

Read More:Everything you’re waiting for is in these containers

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