Just when you thought we were out of the woods with the global issues associated with COVID-19, new problems are occurring in the shipping industry. Over the last weekend of August, 44 cargo ships found themselves floating in the Pacific Ocean off the coast of California without a home. They couldn’t land due to port backups, which of course, led to additional delays across the industry. What does this mean for you and for the global shipping world? Read on for the full report in this month’s shipping update.
Industry Update: Port Backups Delayed 44 Ships Off California Coast
An unfortunate new record was broken when 44 cargo ships were left to sit in the water off the coast of Los Angeles recently. That tops the previous record of 40 delayed ships set in February 2021 and is the highest number since the start of the pandemic.
According to the port of Los Angeles, the average ship’s waiting time is now at 7.6 days. And shipments that enter the US in Los Angeles and Long Beach account for nearly one-third of US imports. When there’s an issue in California, it makes national news.
Of course, it’s not just the ports that are backed up. The port backups lead to congestion and delays on railways and truck routes as well. Essentially, it’s a big domino tower with one thing building upon the other until the whole shipping industry is affected.
Such delays are resulting in a dilemma. No longer are delivery times measured in days or weeks; now, they can stretch into months. Some freight forwarders are estimating delays of 30 days or more, which, in many cases, double timelines.
The Situation: COVID-19, Labor Shortages, and Holiday Spending Causing Issues
As is the case across the US, the shipping industry has also experienced a lack of workers. And that is contributing to delays. No one knows for sure when the tide will change, as the Great Resignation continues, but it’s causing challenges everywhere.
Add that to the fact that when a ship has even one worker who tests positive for COVID-19, it can be turned around with the requirement that the entire crew be replaced. That can lead to significant delays.
Then there’s the back-to-school shopping spree that just ended, as well as upcoming holiday shopping.
All of these are components are compounded, leading to additional port backups in the US and around the globe.
Projection: Port Backups Could Continue into Next Year
With life returning to some semblance of normal, shoppers are looking to spend the money they saved during the shutdowns to buy more products. And with the holiday shopping season right around the corner, some industry experts are predicting an uptick in purchases—which means an increase in port backups and shipping delays.
Some are suggesting these challenges will continue for another 12 to 18 months, putting us into 2023 before we’ll see relief. And of course, with demand far outpacing supply, expect prices to experience a jump as well.
Recommendations
While no one can make these port backups disappear with the snap of a finger, having a freight forwarder in your corner can make your organization better equipped to handle them. At Cyclone Shipping, we stay informed about delays, congestion issues, and everything else related to shipping. That way, we can share that knowledge with you and help you make better choices moving forward.
Contact us to develop your strategy and keep your shipments moving in the right direction.
