This is a mountain of containers photographed at the Port of Los Angeles, California, USA, on Oct. 22. (Xinhua News Agency/Photo)
On October 20, 2021, in the Port of Los Angeles, nearly 200,000 containers were piled up on 65 container ships not far from San Pero Bay like colorful building blocks falling from the sky.
Most of these cargo ships departed from Asia, carrying toys, clothing, electronics and furniture, to the ports of Los Angeles and Long Beach on the west coast of the United States, which accounted for 40 percent of total U.S. maritime imports. According to the Southern California Ocean Exchange, after entering September, more than 40 container ships were stranded in the waters near the port almost every day.
"The cargo is waiting, and it looks like a disaster." Hapag-Lloyd container captain Markus Grote complained.
<h3>"Everything is blocked"</h3>
In mid-October, the sun was shining heavily in Southern California, and the port of Los Angeles echoed with the sound of truck horns, brakes and the beep of mobile cranes. The port's largest APM terminal is packed with container ships waiting to berths to unload, some of which have been stranded for three weeks.
"It's a headache, and the cargo stays at the dock longer than planned." Steven Trombley, general manager of APM Terminals, said. Due to the shortage of manpower, he began to personally find berths for the cargo ships.
Once the docks are vacant, dockers operate large blue cranes to carry containers onto the truck's chassis. Truck drivers then pull containers and take them to customer warehouses 12 miles east of the terminal, waiting for larger companies like Walmart, Nike and IKEA to pick them up.
Large U.S. retailers are eager to fill inventories depleted by the COVID-19 pandemic and ramp up import orders from Asia, which has also exacerbated the "mountain of containers" in West Coast ports.
"There are too many containers over the terminal, the shipping company did not remove it in time, and we were unable to return the empty container." Matt Schrap, CEO of the Los Angeles and Long Beach Port Trucking Association, said.
Due to the long delay in shipping, some shippers no longer arrange for pickup. Jean Seroka, director of the Port of Los Angeles, said cargo owners simply use containers as mobile storage units, which is cheaper than renting warehouses at the port.
According to the Wall Street Journal, as of September 2021, the total container volume at the Port of Los Angeles is 30% higher than in 2020, but the trucking capacity has increased by only 8%. The port also has 25% less storage space than is required.
Trobly was puzzled that the APM dock was piled with truck chassis for a week's use, but not enough truck drivers had been found. According to the American Trucking Association, there is a shortage of 80,000 truck drivers in the United States. If no action is taken, the number is expected to grow to 160,000 by 2030.
"Labor is the biggest problem." Tom Boyle, a California truck warehousing service provider, said his company, like other fleets, has been looking for the right driver.
Container truck drivers have long worked long hours, paid low salaries in the industry, and closed truck driving schools during the COVID-19 pandemic, resulting in 30 percent of trucks in the Port of Los Angeles being idle due to insufficient drivers.
Shipping lines, port workers, truck drivers, warehouse operators and even retailers, players at every step of the supply chain struggle.
"When the cargo arrives at the port, it's like 10 highway lanes are reduced to five, and it's hard for us to absorb all of that cargo into the U.S. supply chain." Gene Seroka, executive director of the Port of Los Angeles, described it to CNN.
<h3>The embarrassment of "summer goods and winter sales"</h3>
Congestion also occurs at rail freight points in the central U.S., an inland replica of the Port of Los Angeles terminal. Freight trains stopped 25 kilometers from the booth and frustrated truck drivers discarded containers haphazardly, making it more difficult to navigate the road and slower to transport.
A large cargo truck with a chassis and containers goes back and forth, and each cycle has been extended from the normal 3.5 days to 17 days. Thomas Moses, a 49-year-old veteran locomotive engineer, complained, "When the train can't load, we're wasting our time." ”
According to Union Pacific, a U.S. rail company, in the summer of 2021, freight space began to compress, with nearly 8,000 containers blocking the paving ramp, and 5,500 parking spaces along the way occupied by truck pickup chassis or containers.
Alvaro Ramirez, a 44-year-old truck driver who has learned to be patient, has been a contractor for Highway One for 13 years.
He sat in a green-and-white Freightliner truck and lined up at the freight station for hours while listening to comedy routines, self-help audiobooks and tai chi lessons that "helped me breathe and calm down."
Ramirez said he had been "mad" by the queues. Before the covid-19 pandemic, Ramirez was able to commute between rail and freight points 7 times in an 11-hour working day. Today, he can only run once or twice a day. He was also forced to work night shifts to avoid peak traffic, but his income fell by 20 percent.
In order for goods from overseas factories to be seamlessly transported to U.S. addresses, ocean-going ships, containers, freight terminals, truck drivers, chassis suppliers and rail departments must all work together like relay runners. At any point of stuttering, there will be delays throughout the supply chain.
The supply chain ends at the doorstep of Tinley Park, Illinois, where the U.S. chain owner Bob Jones, who owns eight stores in the Chicago area, imports 150 containers a year, most of them from daily necessities at the Port of Ningbo, China, 7,700 miles away.
Freight prices are also rising. Jones revealed, "Before the coronavirus, a container from China to the central United States cost less than $5,000, and by the end of August 2021, the price had risen to $26,000." ”
From western ports to rail yards in the middle of the United States, some of Jones' containers are forced to park for two to three weeks, and detention fees are another expense. By raising the price of goods, Jones shifted some of the freight costs to consumers.
But he's more concerned about the uncertainty from supply chains, "by the time summer goods arrive in the Midwest, it's snowing in Chicago."
<h3>"Buy Christmas presents in advance!" </h3>
In Conshohocken, Pennsylvania, a middle-aged man, Romano, is anxiously waiting for his cargo ship to enter port.
Romano is Vice President of Sales at Van Horn, Metz & Company, which supplies raw materials to factories for industrial products such as paints and inks. In the past, only 1% of customer orders of Romano's company could not be fulfilled. In recent months, the company has missed out on 10 percent of its orders, one of which is imported from Sinopec.
"Everything is interlocking, it's a mess." Romano could only postpone the shipment to his customers.
The port crisis has exposed the shortcomings of the globalized division of labour. For a long time, european and American companies have followed Japan's Toyota Motor's "just in time manufacturing" model (just in time manufacturing), on-demand delivery of parts to factories in Asia and other countries, minimizing inventory demand, and then on time when needed.
With the outbreak of the new crown epidemic in early 2020, factories in China and Southeast Asia have been shut down, global freight has been shut down, and large manufacturing companies in Europe and the United States have lacked parts, resulting in production being blocked. When global freight returned, large european and American companies began to "panic" increase orders, resulting in rising pressure on global shipping.
However, it is difficult for containers to be sent from manufacturing countries to European and American countries in a short period of time. To make matters worse, the COVID-19 pandemic has also dramatically changed the way U.S. consumers shop, with online orders doubling.
"Before COVID-19, could we imagine parents clicking the mouse to buy a piece of furniture?" Ruel Joyner, CEO of 24E Design, said his online sales have doubled in the past year.
Due to the small storage space, the lack of labor on the west coast and the aging of the domestic transportation system, most containers are directly forced to stay in port.
"It's a bit like the supply chain is out of control, and [the big companies] are concentrating all the risks in the race for the lowest cost." Schwilly, an international trade expert at Harvard Business School, thinks.
Among U.S. retailers, companies large and small are affected by supply chains. During the Black Friday shopping festival, Nike often doesn't have enough sneakers on its display cases; Costco, a large supermarket, is re-restricting the purchase of toilet paper and raising the price of artificial Christmas trees by 25 percent; FMCG companies such as Procter & Gamble and Nestlé plan to raise the price of goods or recommend more expensive products to buy to offset freight costs.
The imbalance in the U.S. supply chain quickly rippled through consumers. Recently, the consumer price index rose 5.4 percent year-over-year, the highest level in more than a decade, according to the U.S. Department of Labor.
<h3>"7×24 hours" a drop in the bucket? </h3>
"Port congestion has permeated the entire industrial chain from ships to shelves." U.S. Secretary of Transportation Pete Buttigieg believes that "we have to work not only with ports, but also with the other end of the supply chain, especially truck drivers, railroad companies, operators, etc." ”
On October 13, 2021, the Biden administration announced that it would change the Port of Los Angeles to "7×24" operations 24 hours a day to alleviate the backlog of goods, and major companies such as Walmart, FedEx and UPS will strengthen operations to ship goods to all parts of the United States faster.
Jean Seroka, executive director of the Port of Los Angeles, has publicly expressed his concerns, "Without the cooperation of numerous private sector operators, 7×24-hour operations are difficult to implement." ”
To address shortages for truckers and container storage, on October 20, 2021, California Governor Gavin Newsom issued an executive order allowing state-owned and "private, locally owned, and federally owned land" to be used for short-term storage needs; temporarily lifting truck load limits to increase the capacity of 18-foot-long five-axle trailers to 34,000 pounds; and adding training programs for port workers and others in the supply chain.
Railway yards remain a pain point in the supply chain. In recent months, trains loaded with clothes, computers, furniture and appliances have been driving to the Transportation Hub in the Midwest. In the summer of 2021, the railroad companies Union Pacific and BNSF Railway briefly suspended cargo traffic from ports such as Los Angeles and Long Beach for a week.
However, this has had little effect. According to Lawrence Gross, a transportation consultant at Durango, Colorado, at present, containers are not a one-time movement from train to truck, but are frequently lifted and placed in different warehouses, during which they will pass two or even three times before finally leaving the yard.
"Once you're behind, it's hard to find a way out. The whole system has failed. Gross said.
At present, large retail companies have changed their transportation strategies to reduce losses. Walmart, among them, replaced 40-foot containers in global shipping by switching to large 53-foot containers; home improvement retailer Home Depot is also playing a "transportation game," which transports cargo ships to the port of San Diego, 125 miles away.
Burt Flickinger, general manager of strategic resource group at retail consultancy, pessimistically speculates that even so, at least 20 to 25 percent of the cargo will remain on board by Black Friday, Nov. 26.
However, most small businesses do not have the financial means to rent more containers or change ports of arrival. Small toy maker Learning Recources sells products in the central United States that are manufactured in Chinese factories. In the past, it would receive 20-30 containers from China regularly every week. Today, everything from Chinese ports to ocean carriers and U.S. ports, truck drivers and railroads is influencing the company's business plans.
"This huge container is like old wine, and when we get it, it will become an antique." Waldenberg, head of Small Toys Maker Learning Recources in Chicago, teased, "A freight forwarder told me to prepare for supply chain delays, which is devastating for companies like ours that rely on overseas manufacturing." ”
More recently, Waldenberg has raised the retail price of goods by 30 percent to compensate for lost freight.
<h3>Rehash</h3>
"It's not just a local issue, not Los Angeles, Long Beach or California, it's an international issue." Deiddy Myers, director of the California Governor's Office of Commerce and Economic Development, thinks.
Felixstowe, Britain's largest container port, is being forced to turn away ships from Asia due to insufficient capacity. Moody's, a global analytics firm, reports that supply chain disruptions are in "every corner" of the world.
According to the real-time supply chain platform Project44 container tracking data, the average length of container delays on the China-Europe route is 30 days, and the delay time of the China-West route with the most serious container accumulation is close to 22 days.
Affected by the new crown epidemic, major manufacturing bases in the world such as China and Southeast Asia have stopped production, and the global logistics industry has also been chaotic. In Europe, Germany has suspended production due to the shortage of metal parts such as computer chips and electric vehicle batteries, while the United Kingdom has led to a long queue of major gas stations due to fuel shortages.
In the era of globalization, the risk of disruptions in global supply chains has always existed. The 1999 Taiwan earthquake brought computer chip manufacturing to a halt. In 2011, The 3.11 earthquake in Japan led to factory closures and hampered shipping, shortages of auto parts and computer chips. That year, flooding in Thailand also affected the production of computer hard drives worldwide.
Josie Sheffield, director of the Transportation and Logistics Center at the Massachusetts Institute of Technology in the United States, believes that the widespread financial stimulus measures introduced by the US government after the outbreak of the new crown epidemic, the damage to the global supply chain by the epidemic and the aging of the US infrastructure are the three major causes of the current supply chain crisis in the United States.
Therefore, it is inevitable to solve the problem of industrial chain rupture only from the transportation industry. But some U.S. politicians have once again repeated the same cliché, arguing that the port crisis highlights the dependence of U.S. manufacturing on Chinese and Asian markets.
Senator Cotton of Arkansas claimed, "In the past 30 years, we have moved a large number of manufacturing jobs to China. Nowadays, it is not easy to buy a piece of furniture, clothes, shoes or toys for your child, or Christmas decorations that are not from China. ”
Jonathan Ward, founder of the Atlas Organization, a strategic consulting firm, also called for the United States to build a supply chain in China followed by a massive import, a 20-year trade pattern that must change, and "we must rebuild America's industrial base."
"The great congestion in the transportation industry has also accelerated the adjustment of the import trade chain in the United States." Mario Cordero, executive director of the port of Long Beach, Calif., expects that this wave of shipping congestion may not ease much until the spring of 2022, and the situation in the port of Cyprus will continue into the summer of 2022.
Sheffield made a similar judgment. He expects U.S. supply chain tensions to ease in the third quarter of 2022, with even oversupply.
Southern Weekend contributing writer Gu Yuebing