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Shipping Crisis Gets Crazy – 65 Container Ships Get Stuck At California Ports And Shortages Soar
Supply chains are still in total chaos all across the U.S., and now American consumers are being warned about coming shortages ahead of the busy holiday season. Several business owners, big retailers, and even the Vice-President of the United States have been alerting that store shelves may soon be empty as the global shipping crisis aggravates. They have been asking people to prepare for further supply chain disruptions and start placing their Christmas orders as soon as possible if they want to get them in time.
In short, we're about to witness another turbulent shopping season as the supply chain crisis rapidly spirals out of control. A wide range of factors, including a shortage of shipping containers, record-high consumer demand, port congestion, and soaring freight costs have all conspired against global supply chains and businesses that have been waiting for their orders to arrive for months. There's a record-breaking number of cargo ships currently stuck at California ports. About a month ago, 44 ships were stuck outside the ports of Los Angeles and Long Beach, and up until that point, that had been the highest number of ships waiting to unload on California docks. But things have escalated VERY quickly. And now 65 ships are queueing outside the two biggest ports in America, a signal of how severe port congestion has become across the U.S. ports.
Now that consumers are aware of the imminent shortages and retailers and manufacturers have been rushing to place orders to restock their inventories before the holiday season, the global shipping system is struggling to keep up. The LA and Long Beach ports are the main seaborne gateway to the country, especially for imports coming from China. Over the weekend, a record 73 ships were waiting for a berth - nearly twice as many as at the same time in August. Many cargo ships have been diverted to other ports because of the unprecedented backlog. However, the situation has only gotten worse since most nearby ports don't have enough capacity to deal with the volume of trade, which is preventing thousands of containers from being unloaded.
According to a recent Sea-Intelligence research, several industries across the country are actually dangerously low on inventory. And one of the main determinants exacerbating supply chain woes is the very real shortage of truck drivers, who collect goods from those warehouses to deliver to the stores and the consumers. In essence, shipping companies are aware ports cannot handle the immense cargo volume sent every day. But they have been inciting shippers to order far more than they need to restock their inventories. That, in turn, elevates the demand for cargo shipping, and of course, pushes the profit margins of those shipping companies to sky-highs as shipping costs go through the roof.
However, skyrocketing shipping and freight prices are preventing small-and-medium-sized businesses to actually restock their shelves and offer their products. As the holiday season approaches, the US Toy Association, which represents 950 toy firms with a US presence, has warned about looming shortages, given that their products have been sent to the end of the shipping priority list. While large companies have decades-long relationships with shipping companies, smaller businesses cannot afford to pay a premium for in-time deliveries. If you ever tried to cook a complex dish and realized in the middle of the process that an essential ingredient was missing then you can understand what manufacturers are wrestling with for the past year and a half. Many are being forced to shut down operations as they wait for key parts to arrive.
Sadly, this crisis is far from over. Industry specialists are warning that prices of several supplies will rise exponentially because of port logjams, and the situation is getting so dire that it is expected to last until 2023.According to Jackson Meyer, the chief executive of freight forwarding firm Verus Global, as retailers run to stock up on best-selling items, supply snags, transportation chaos, and inflated prices are about to take this crisis to a whole new level.
To make things even worse, the U.S. overall retail supply level has remained at record lows for four months in a row. And now that stores shelves are being wiped out at record speed, those who are planning to buy certain Christmas presents have probably already missed their chance to get them under the tree. According to Mr. Meyer, "it's probably too late by now, particularly for items such as furniture, beds, TVs, or anything that has to be imported." At this point, we can only hope that a repeat of last year's panic-buying frenzy doesn't occur during the holiday season. But it is safe to say that much more chaos will arise as shortages intensify.