Container ships piling up on America’s East and West Coasts are raising concern, as disruptions to supply chain are still not over.
Dozens of giant container ships were reportedly waiting to unload their cargos, floating adrift outside America’s two biggest seaports in Los Angeles and Long Beach, and another 22 vessels were drifting offshore a few miles to the north, in waters too deep for their anchors.
On the East Coast, a line of more than 20 ships were waiting to unload, according to New York harbor officials.
The backlogs at the U.S. ports offered a glimpse of how the supply chain is being disrupted, as the COVID-19 pandemic continues haunting the country and the world at large.
In recent months, global supply chains have faced numerous challenges, resulting in widespread delays and shortages among a variety of consumer goods, Morning Consult, a North American data company, said in a report last week.
Pandemic-related factory shutdowns, bottlenecks on product components, port congestion, worker shortages, and unfavorable weather patterns have all coalesced to constrict supply for a multitude of products, according to the report.
Amid widespread shortages and delivery delays, more than half of American consumers have recently reported difficulty procuring at least one product last month.
“It’s going to take time, maybe years, for things to level off,” said Dale Rogers, a supply chain management professor at Arizona State University.
“Look at just the container cost increase — from 2,000 U.S. dollars a year ago, 1,000 U.S. dollars before that, to 3,000 U.S. dollars plus now, with the cost of the goods inside the container being worth around 50,000 to 100,000 U.S. dollars,” he said.
The dramatic increase cost of transportation, one of the three metrics Logistics Management Institute (LMI) has used to assess supply chain movement, is unprecedented in the 30-year study of supply management, and has caused ripples across distribution corridors.
Rogers noted that other kinks in the chain have exacerbated the problem, from a shortage of truck drivers to skilled port equipment operators and personnel who unload the lined-up cargo ships.
LMI’s co-founder, Rogers’ son Zachary, an assistant professor at Colorado State University, told Xinhua that he thought there were also problems in the supply chain infrastructure.
“We don’t have the suburban warehouses yet for delivery to the consumer next day, or enough trucks to deliver the products, or the ports capable of processing the increased goods coming from Asia,” he argued.
The American Institute for Economic Research (AIER), a U.S. think tank, said last week that “massive dislocations are present in the container market, shipping routes, ports, air cargo, trucking lines, railways and even warehouses.”
The result, the think tank stressed, has created shortages of key manufacturing components, order backlogs, delivery delays and a spike in transportation costs and consumer prices. “Unless the situation is resolved soon, the consequences for the global economy may be dire,” it added.
Source: Xinhua