Supply chain disruptions continue to pop up across the world. First, it was the Suez Canal blockage fiasco where a shipping container larger than the Empire State Building got stuck in one of the world’s most used shipping lanes, holding up $9 billion in global trade each day. Then, massive shipment delays in key Chinese ports drove up already-high shipping rates. Fast forward to today, and 44 cargo ships are held up awaiting entry in the two largest ports in California.
The long line is the consequence of labor shortages, pandemic-related interruptions, and increased holiday shopping. According to data from the Port of Los Angeles, the average wait time for the ships had climbed to 7.6 days. And according to one freight forwarder in San Francisco, travel times from Shanghai to Chicago have more than doubled, from 35 days to 73 days.
About one-third of all US imports pass via the ports of Los Angeles and Long Beach in California. These ports are a major source of Chinese imports and have been heavily congested during the pandemic. So, shipping delays are expected for firms importing and exporting products to and from Asia.
Congestion in the United States has never been this bad, and it’s just getting worse. The 44 ships anchored outside the harbor surpassed the previous record of 40 set in February. Experts have said under normal circumstances, the number of container ships anchored is between zero and one.
When will this madness end?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.