Trade bottleneck tied to virus wreaks havoc on supply chain
NEW YORK — A trade bottleneck born of the COVID-19 outbreak has U.S. businesses anxiously awaiting goods from Asia — while off the coast of California, dozens of container ships sit anchored, unable to unload their cargo.
The pandemic has wreaked havoc with the supply chain since early 2020, when it forced the closure of factories throughout China. The seeds of the current problems were sown last March, when Americans stayed home and dramatically changed their buying habits — instead of clothes, they bought electronics, fitness equipment and home improvement products. U.S. companies responded by flooding reopened Asian factories with orders, leading to a chain reaction of congestion and snags at ports and freight hubs across the country as the goods began arriving.
Main Street businesses are now forced to wait months instead of the usual weeks for a delivery from China, and no one knows when the situation will be resolved. Owners do a lot of explaining to customers, order more inventory than usual and lower their expectations for when their shipments will arrive.
Alejandro Bras used to be able to place an order to factories in China and expect to receive his products in 30 days. Now, with problems throughout the supply chain, “we’re adding an additional two months,” he says. And that two months is “iffy” — it can take even longer.
Bras’ company, Womple Studios of California, sells monthly subscription boxes with educational crafts and activities for children; many of the products are custommade, so he can’t easily find
substitutes.
The cluster of ships offshore are perhaps the most dramatic symptom of an overwhelmed supply chain. As production surged in Asia, more ships began arriving in the fall at ports in Los Angeles, Long Beach and other West Coast cities than the gateways could handle. Ships holding as many as 14,000 containers have sat offshore, some of them for over a week. At times there have been as many as 40 ships waiting; normally, there’s no more than a handful, according to the Marine Exchange of Southern California, a service that monitors port traffic and operations.
“With this type of backlog, it will take several weeks to work through that,” says Shanton Wilcox, a manufacturing adviser with PA Consulting.
But there are choke points on land as well. It can take 8,000 trucks to haul the cargo away from a ship, says Kip Louttit, executive director of the Marine Exchange of Southern California. But when all those trucks hit the road, there aren’t enough
available when dockworkers are trying to unload the next ships in port. Freight rail traffic has also been affected.
“When you have more cargo, you have a less efficient cargo moving system,” Louttit says.
Put all the problems together, and when a ship gets into port, it takes five to seven days to unload instead of two to three, says Shruti Gupta, an industrial analyst with the consulting firm RSM. “That again has consequences on truckers and rail service because they have to wait until the port clears,” she says.
Exporters are also feeling the impact of the bottlenecks. When containers are unloaded at the ports, many are being sent empty back to Asia instead of being held and filled with U.S. goods.
Isaiah Industries sells its metal roofs to Japan, “but we’re having huge delays getting containers scheduled to ship to them. So, we’re sitting here with orders and product to fill those orders but no way to get them shipped,” says Todd Miller, president of the Piqua, Ohio, company.