NEW YORK (AP) – A commercial bottleneck born of the COVID-19 outbreak has U.S. businesses anxiously awaiting goods from Asia – while dozens of cargo ships are anchored off the coast of California and unable to unload their cargo.
The pandemic has wreaked havoc with the supply chain since early 2020, when it forced the closure of factories across China. The seeds of the current problems were sown last March when Americans stayed home and dramatically changed their buying habits – instead of clothing, they bought electronics, fitness equipment and home improvement products. U.S. companies responded by flooding reopening Asian factories with orders, leading to a chain reaction of congestion and hook-ups at ports and cargo hubs across the country when the goods began arriving.
Main businesses are now forced to wait months instead of the usual weeks for delivery from China, and no one knows when the situation will be resolved. Owners make many explanations to customers, order more stock than usual and lower their expectations for when their shipments will arrive.
Alejandro Bras was previously able to place an order at factories in China and expects to receive its products within 30 days. Now, with problems in the supply chain, “we’re adding another two months,” he says. And that the two months are ‘undoubtedly’ – it could take even longer.
Bras’ company, Womple Studios, sells monthly subscription boxes with educational crafts and activities for kids; many of the products are custom made, so he can not easily find substitutes.
Bras has found he spends more time on logistics rather than product development, and more time apologizing to customers in Oakland, California, who expect a delivery every month. Customers understood this – they realized that the pandemic was upsetting shipping and trade worldwide.
The group of ships abroad is perhaps the most dramatic symptom of an overwhelming supply chain. As production in Asia increased, more ships began arriving in ports in Los Angeles, Long Beach, and other West Coast cities in the fall than the holes could handle. Ships with as many as 14,000 containers sat abroad, some of which lasted longer than a week. Sometimes up to 40 ships waited; normally there is no more than a handful, according to the Marine Exchange of Southern California, a service that monitors port traffic and operations.
‘With this kind of backlog, it will take a few weeks to work on it. It does not go away. And new ships are sailing to the US even as we speak, ”says Shanton Wilcox, a manufacturing consultant at PA Consulting.
But there are also hot spots on land. It can take 8,000 trucks to tow the cargo off a ship, says Kip Louttit, executive director of the Southern California Marine Exchange. But if all the trucks take the road, there is not enough available as dock workers try to unload the next ships in port. Freight rail traffic was also affected.
“If you have more cargo, you have a less efficient cargo displacement system,” says Louttit. The pandemic itself is also slowing down the flow of goods, and workers in warehouses in the ports are tipping over, he says.
Put all the problems together, and when a ship arrives in port, it takes five to seven days to unload instead of two to three, says Shruti Gupta, an industry analyst at consulting firm RSM. “This in turn has consequences for trucks and railway service because they have to wait until the port is clean,” she says.
Businesses are also waiting because of the huge demand for space on ships and inside the shipping cargo containers 20 to 45 feet long.
“Normally a shipment can be booked with a few days notice, and currently you have to book containers 30 days in advance,” says Peter Mann, CEO of Oransi, a manufacturer of air purifiers and filters in Raleigh, North Carolina. He must account for the shipping times twice as long as normal in his business plans.
When Mann had trouble getting shipments in the fall, he decided to place larger orders – getting the manufactured goods was no problem and fewer deliveries meant less waiting time. This meant that you would invest more money in stock.
Supply disruptions can be a more serious problem for smaller companies, as they, unlike larger players, may not be able to relocate production to other countries – for example, Western Hemisphere countries whose products may be shipped to East Coast ports. word. And large companies can better afford to use air freight, which is more expensive than shipping.
Because there is so much competition for containers, the cost of importation is rising.
“The price could be as much as five times as usual,” says Craig Wolfe, whose company, CelebriDucks, has had trouble getting rubber ducks from China since the start of the pandemic.
One of Wolfe’s consignments sat on the dock for three weeks because there were no railways available. Another one he would send by mid-February has not yet left China.
“It would have arrived now,” said Wolfe, whose business is based in Kelseyville, California. He is anxious because most of his products are not typically rubbery – they are based on presidents and other celebrities and pop culture trends such as the Harry Potter books and movies. Like Mann, he placed a few orders larger than usual to make sure he had enough stock.
Executors also feel the impact of the bottlenecks. When cargo containers are unloaded at ports, many are returned empty to Asia instead of being kept with American goods.
Isaiah Industries sells its metal roofs to Japan, ‘but there is a long delay in sending cargo containers to them. So we sit here with orders and products to fill the orders, but no way to have them shipped, ”says Todd Miller, president of the company Piqua, Ohio.
Miller is also awaiting delivery of overseas raw materials, including sheets commonly known as tar paper placed under roofing sheets. His problem is that he competes with every other importer for space on container ships.
“We can manufacture it, but it takes four to six weeks before they can load it on a ship,” he says.