Update: Covid Snarls Global Shipping

Over the summer, it became apparent that COVID-19 and the subsequent shutdowns had tipped a string of dominoes leading to backups at points of departure as well as destinations. Almost four months later, production and outbound shipping is mostly on track, but bottlenecks persist at ports of entry, especially California’s Ports of Los Angeles and Long Beach. In August, container ships at that destination were waiting an average of five days for unloading. By the end of November, ships were spending an average of 20 days at anchor.

Why hasn’t offloading rebounded? The shipping website universalcargo.com sites five principal reasons:

  • Larger ships — Carriers are deploying mega-ships that carry substantially more containers, so the sheer volume of incoming cargo has overwhelmed port capacity. Fewer ships might be coming into port, but these ships take longer to unload.
  • Lack of chassis — Off-loaded containers must be placed on chassis so trucks can haul them away. Carriers who used to supply chassis for their shipments have phased out that service, but no one has filled the gap. The result is a chassis shortage that is slowing the removal of containers.
  • Truck driver shortage — As older truckers retire; few younger workers are entering the industry. Trucking companies are finding it very difficult to hire, train and retain drivers.
  • High shipping volume — With so many goods being produced in East Asia, the flow into U.S. ports is overwhelming the system.
  • Port of Los Angeles fire— On September 22, a major fire broke out at the Port of Los Angeles, endangering employees, ships, and warehouses. The import and export of cargo were halted and took time to recover due to facility damage.

These issues are largely systemic, and there are no easy fixes. In the United States, port infrastructure has been neglected for decades. Yet, despite almost unanimous agreement on the need for federal government investment in hard infrastructure, President Biden has had difficulty moving legislation through Congress, because of demands to attach costly social program spending.

If there’s good news, it’s that the cost of transpacific shipping, which had risen precipitously since January of 2021, started to come down again in September.