The Grinch Who Stole Christmas – A Shipping Crisis?

Source: Unsplash, Ian Taylor

Shipping Continues to Cause Issues

Following on from our September Research on the U.S. Supply Chain, we are seeing the congestion at U.S. ports getting worse. The number of ships anchored daily off the coast of Los Angeles is above 60 (up from 49 at the end of August), and wait times to unload are currently 8.5 days long (normally it is a day or less). 

The pandemic has highlighted just how important the global supply chain is to trade.  As we emphasized in our June and September Supply Chain pieces, the pandemic slowed the production of goods, many of which are manufactured in Asia. While production eased and supply lowered, the American consumer is unwavering in demand and continues to order more goods online. This increased demand for container space is more than can be offered to make the trans-Pacific journey.  More importantly, we have seen the largest U.S. ports struggle to unload and reload these container ships, with all of the top five U.S. ports seeing an increase in ship turnaround time. 

In addition to the port congestion, a shortage of shipping containers has added to the problem. This is a result of the port congestion withholding a number of the containers on the idle ships as well as what is being called, ‘container dislocation,’ as the pandemic left many, at the time not-needed, containers at inland freight hubs in the US, Europe and Asia. 

The combination of shipping congestion and lack of containers could make the U.S. holiday season a tough one as many retailers will struggle to get inventory for what is normally the busiest time for retail. 

Lastly, although supply chain issues are rarely a topic for most Americans, it is interesting to note that Google Trends shows a growing interest in searches for the terms “Cargo Ships” and “Supply Chain,” as both hit all time highs.  Perhaps this is a year where we should all be planning well ahead of Black Friday and the Christmas season.

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