- 56 container ships are stuck outside California ports, worsening shipping delays and costs.
- It is the fourth time in three weeks that Los Angeles and Long Beach ports have hit a new record.
- The ports account for about one-third of US imports, serving as a main source of trade with China.
- See more stories on Insider’s business page.
Key ports in Southern California have hit a fourth record in less than three weeks, as shipping delays surge past early pandemic levels.
On Monday, 56 cargo ships were stuck at anchor or in drift areas off of Los Angeles and Long Beach ports. The ports are currently dealing with 140 total ship in the ports, including 87 freighters, according to the Marine Exchange of Southern California.
In late August, the ports hit an all-time high not seen since February, when the onset of the pandemic and panic-buying wreaked havoc on global supply chains.
The queue is a result of COVID-19-related disruptions, and holiday-buying surges, paired with a national labor shortage. Port of Los Angeles data indicates that ships’ average wait times have increased to 8.5 days.
“The normal number of container ships at anchor is between zero and one,” Kip Louttit, the executive director of the Marine Exchange of Southern California, told Insider in July.
California ports in Los Angeles and Long Beach account for about one-third of US imports. These ports operate as a primary source of imports from China and have experienced heavy congestion throughout the pandemic.
“Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago,” Louttit said. “They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo.”
While the container ships are forced to anchor and await berth space, companies importing and exporting goods to and from Asia expect additional shipping delays and higher transportation costs. Last week, Judah Levine, the Head of Research at Freightos, told Insider shipping prices between the two regions have jumped 500% from this time last year.
In response to elevated transportation costs, many companies have already implemented price hikes. On Sunday the President of UPS Scott Price warned that the supply chain snags will continue into the coming year.
This comes during one of the busiest months for US-China trade relations, as retailers buy ahead in anticipation of US holidays and China’s Golden Week in October, Bloomberg reported.
“To give you a real-life example of the kinds of challenges we’re seeing, one of our dedicated charters was recently denied entry into China because a crew member tested positive for COVID, forcing the vessel to return to Indonesia and change the entire crew before continuing,” Michael Witynski, Dollar Tree’s CEO, said on a Thursday earnings call. “Overall, the voyage was delayed by two months.”
Witynski added that a freight forwarder in San Francisco said in a recent transportation webinar that “the transit times from Shanghai to Chicago had more than doubled to 73 days from 35 days.” Another carrier executive estimated “that voyages are now taking 30 days longer than in previous years due to port congestion, container handling delays, and other factors,” Insider reported.
The Marine Exchange of Southern California said on Twitter that the dozens of shipping waiting to dock continue to float “peacefully.”
“Despite record levels of ships in port and at anchor and in drift areas, the Marine Transportation System in LA and LB remains safe, secure, reliable, and environmentally sound, while not being as efficient as it should be due to COVID protocols in these uncertain and unsettled times, and record levels of cargo,” the Marine Exchange of Southern California wrote in a statement.