Supply chain constraints have gotten so bad that even throwing more people at the problems wouldn’t make them go away immediately. A new snapshot of port activity in California is the latest indication.
Driving the news: The number of workers in the ports of Los Angeles and Long Beach is down roughly 30% from pre-COVID levels, according to RBC Capital Markets data shared with Axios. RBC approximates foot traffic based on anonymized cellphone location data from geospatial intelligence company Orbital Insight.
“That’s your labor shortage quantified,” says Michael Tran, managing director of digital intelligence strategy at RBC Capital Markets.
Why it matters: Companies are eager to find signs of relief in the supply chain in order to adjust inventory and prices effectively. The data shows how far activity has dropped from pre-pandemic levels and how hard it’s been to stabilize this year.
State of play: Among the 22 biggest ports in the world, LA and Long Beach this year have experienced the longest turnaround times (how long it takes a ship to move through port), according to RBC’s data.
The gap between the most efficient port, Port Klang in Malaysia, and LA and Long Beach, is 4.8 days.
Across all global ports, the current turnaround time is almost an entire day (+350%) longer than normal levels in 2019.
The big picture: The economy cannot add jobs fast enough to counterbalance the current record demand for goods.
• The backlog is so immense that even with more workers added, you would need everyone to work harder and longer to get through that backlog first, says Tran.
What to watch: There are currently 60 ships at anchor between both ports, according to Phillip Sanfield of the Port of LA, or about two weeks of work waiting to come in.
Source: Axios