Backlog at California's Ports and Its Impact

Dec 16, 2021


Backlog at California's Ports and Its Impact

The shipping industry is going through one of its most uncertain slowdowns in 30 years due to economic disruptions such as labor shortages. U.S. ports face extensive backlogs of cargo ships, particularly in Southern California. The backlog is so intense that many ships must float 20 miles away from the shore to avoid other shipping traffic.

The Port of Los Angeles has dealt with nearly 500,000 shipping containers, many of which are larger than the average containers from 20 years ago. These 20-foot containers store an estimated 12 million metric tons of goods.

By late 2021 the nation's largest ports have been operating at 60-70 percent capacity. Shipping firms are finding it difficult to meet the increasing demands of delivery schedules with a reduced workforce.

Addressing Labor Shortages

Giving existing logistics employees longer working hours may help mitigate the strain on supply chains, but it won't be sufficient to resolve the immediate problems. Extending hours means pushing work into the evening, which is not convenient for truck drivers or warehouse workers.

Labor shortages are based on a mix of issues, many of which stem from the pandemic. A record number of employees have quit their jobs after nearly two years of rethinking their careers. Suppliers and logistics firms have not been able to fill positions fast enough to meet delivery demands. The pandemic itself has triggered higher demand for shipping due to lockdown situations.

The combination of equipment and operator shortages is making shipping delays worse. The strain can be felt throughout the supply chain up to the end consumers, who have to pay higher prices for slower deliveries.

Resolving Storage Issues

Many West Coast warehouses have limited space available for storage and often operate at full capacity. An affordable solution when extra space is needed is to rent a 20-foot shipping container. According to the Wall Street Journal, the overall Western U.S. shipping industry is near full capacity with a 3.6 percent vacancy rate.

About a third of containers stay at ports for up to five days, which is three times longer than normal. President Biden has ordered ports to stay open 24 hours, but it has had limited effects on reducing the bottlenecks.

Rising Prices and Growing Issues

In November 2021, the U.S. government reported consumer prices had skyrocketed 6 percent over a year. It marked the fastest price surge in three decades. Many logistics experts believe that supply chain bottlenecks will continue through 2022. Some experts warn this crisis could last through 2023 as well.

Supply chains are going through a very challenging period that may take time to resolve. In the meantime, if you need a reliable delivery service in Southern California, turn to the leaders in your region. MDS is your custom courier and mail delivery service expert for all of your mail and delivery needs in Orange County. Contact us for more information today.