NEW YORK (AP) – A commercial bottleneck generated by the COVID-19 outbreak makes American companies look forward to products from Asia – while off the coast of California, dozens of container ships are anchored, unable to unload their cargo.
The pandemic has wreaked havoc on the supply chain since the beginning of 2020, when it forced the closure of factories across China. The seeds of current problems were planted last March, when Americans stayed at home and drastically changed their shopping habits – instead of clothes, they bought electronics, exercise equipment and renovation products. American companies responded by flooding reopened Asian factories with orders, leading to a chain reaction of congestion and obstacles at ports and cargo centers across the country when goods began to arrive.
Main Street businesses are now forced to wait months, instead of normal weeks, for a delivery from China, and no one knows when the situation will be resolved. Owners explain a lot to customers, request more inventory than normal and lower expectations when shipments will arrive.
Alejandro Bras used to place an order for factories in China and expected to receive his products in 30 days. Now, with problems in the entire supply chain, “we are adding two more months,” he says. And those two months are “doubtful” – it may take even longer.
Bras’s company, Womple Studios, sells monthly subscription boxes with crafts and educational activities for children; many of the products are tailor-made, so he cannot easily find substitutes.
Bras spent more time on logistics than on product development and more time apologizing to customers at the Oakland, Calif. Company, who expect a shipment each month. Customers have understood – they realize that the pandemic has affected shipping and trade around the world.
The cluster of offshore vessels is perhaps the most dramatic symptom of an overloaded supply chain. As production in Asia increased, more ships began arriving in the ports of Los Angeles, Long Beach and other West Coast cities in the fall than the gates could handle. Ships with up to 14,000 containers stopped at sea, some of them for more than a week. Sometimes, there were up to 40 ships waiting; typically, there are no more than a handful, according to the Marine Exchange of Southern California, a service that monitors traffic and port operations.
“With this type of accumulation, it will take several weeks to resolve this. Does not go away. And new ships are sailing to the US right now, ”says Shanton Wilcox, manufacturing consultant at PA Consulting.
But there are also bottlenecks on land. 8,000 trucks are needed to transport a ship’s cargo, says Kip Louttit, executive director of the Marine Exchange of Southern California. But when all those trucks hit the road, there is not enough availability when dockers try to unload the next ships in the port. Rail freight traffic was also affected.
“When you have more cargo, you have a less efficient cargo handling system,” says Louttit. The pandemic itself is also reducing the flow of goods, leaving workers in port warehouses aside, he says.
Put all the problems together and, when a ship arrives at the port, it takes five to seven days to unload, instead of two to three, says Shruti Gupta, an industrial analyst at consultancy RSM. “This again has consequences for truck drivers and the rail service, because they have to wait until the port is free,” she says.
The companies also wait because of the high demand for space on ships and inside containers that range from 6 to 14 meters in length.
“Typically, a shipment can be booked a few days in advance, and today, you need to reserve containers 30 days in advance,” says Peter Mann, CEO of Oransi, a Raleigh, Carolina-based manufacturer of air purifiers and filters. From north. He must account for shipping times twice as long as normal in his operational plans.
When Mann started having trouble getting shipments in the fall, he decided to place larger orders – product manufacturing was not an issue and fewer deliveries meant less waiting time. It meant investing more money in stock.
Supply disruptions may be a more serious problem for smaller companies because, unlike large companies, they may not be able to transfer production to other countries – for example, nations in the western hemisphere whose products can be shipped to Europe’s ports. East Coast. And large companies can afford to use airfreight, which is more expensive than freight.
As there is so much competition for containers, the cost of imports is rising.
“The price can go up to five times the normal,” says Craig Wolfe, whose company, CelebriDucks, has been having trouble getting rubber ducks from China since the start of the pandemic.
One of Wolfe’s shipments stayed on the pier for three weeks because there were no cars available. Another that he expected to be shipped in mid-February has not yet left China.
“It should have arrived by now,” says Wolfe, whose company is based in Kelseyville, California. He is anxious because most of his products are not typical rubber ducks – they are based on presidents and other celebrities and pop culture trends like the Harry Potter books and films. Like Mann, he placed some orders larger than normal to make sure he has enough inventory.
Exporters are also feeling the impact of bottlenecks. When containers are unloaded at ports, many are shipped empty back to Asia, rather than being held up and loaded with American goods.
Isaiah Industries sells its metal roofs to Japan, “but we are experiencing major delays in scheduling shipping containers. So we are sitting here with orders and products to fulfill those orders, but no way to ship them, ”said Todd Miller, president of Piqua, Ohio.
Miller is also waiting for shipments of raw materials from abroad, including sheets commonly known as tar paper that are placed under the tiles. His problem is that he is competing with all other importers for space on container ships.
“We can produce it, but it will take four to six weeks before they can load it on a ship,” he says.