· There are many factors that have brought the US Supply Chain to the current crisis we are seeing. The bottleneck preventing needed merchandise restocks ahead of the Christmas holiday will have many effects on consumers but is important to understand what brought us to this point. The first major factor influencing this market is a high demand for goods from the start of the pandemic. Consumers purchasing habits were unprecedented causing a need for major restocking throughout the country. This increased demand in turn created a major spike in imports into the US and raising spot market rates with carriers to rise significantly as space was limited and demand was high.
· Once imports begin to arrive in the US we see the next part of the traffic jam, ports were overwhelmed with the amount of incoming cargo. Stacks of containers were covering the port and there were still vessels pending unloading. As a result, many vessels were forced to anchor and wait for long periods of time to begin to berth. Once vessels were allowed to move to unload, unloading often takes longer than a week to complete at several key ports in the US including Long Beach, Los Angeles, and Savannah. Once cargo is unloaded, the next part of the bottleneck begins to affect shipments. Cargo being trucked runs into driver shortages and a lack of available chassis that are needed to out gate containers. Chassis are however sitting under empty containers in locations waiting to be flipped by the port to allow for pickup. Cargo being railed are backlogged waiting to rail taking an estimated 45 days to arrive in key areas like Chicago. Upon arrival due to high volume some containers were forced into stacks that were not able to be out gated but storage was still charged.
· All these issues are causing importers headaches however the affects to the US consumer will be unpresented. Extra shipping costs and fees will undoubtedly affect the price of items. Shelves are expected to be very bare through the holiday season as there is an estimated $25 billion in merchandise waiting off the West coast unable to be unloaded at this time. Solutions to the crisis are available however they are not instant and will require additional oversight as well as construction and basic software updates to prevent future gridlocks.
Wednesday November 17, 2021
Comments