Port congestion causes severe problems and failures across the US supply chain as the global shipping crisis escalates. Industry executives warn that the unprecedented backlog of containers won’t vanish, but it will worsen in 2022.
Goldman Sachs stated, “Backlogs and elevated shipping costs are likely to persist at least through the middle of next year.”
“No immediate solution for the underlying supply-demand imbalances at US ports is available,”
It means that the worst part is about to come for the American economy because supply chain bottlenecks cause the prices to rise. The inflation increased by 6%, but non-official figures point to a spike of roughly 14%.
The out-of-stock product in online platforms increased 172% compared to the previous year.
The most evident proof is that the most shortages are here the prices will continue increasing. Estimates tell that more than one million containers are stuck in one hundred cargo ships waiting to be offloaded outside two ports.
Nationwide, including the ports of Savannah, New York, and New Jersey, at least 1.5 million containers that are sitting in 171 cargo ships are still waiting to dock, and these figures continue to escalate as more and more ships arrive with holiday goods.
In CA, the stuck goods are worth $24 billion. The US faces the worst phase of the shipping crisis, and the WH shared that the ports will work 24/7. But we also faced a shortage in labor, so it will worsen the problem.
Goldman stated that we need three times than normal workers to move these goods around.
On Wednesday, several industry leaders attended the National Shippers Advisory Council inaugural meeting.
Early this week, the ports of Los Angeles and Long Beach announced that from November 1 on, there would be a $100 charge for containers dwelling nine or more days that move by truck and those dwelling six days or more that move by rail.
The fee will get bigger by $100 on a daily basis, and it will be charged to carries, which will pass the flee to shippers and pass those increased costs to customers.
Daniel Miller, global container lead at Cargill, stated that CA emergency charges are crazy fees that make everything more expensive.
“We know this is all going to come back to us. I had a couple of calls with carriers yesterday, and they’ve already admitted that yes, they are going to come back to us.” According to Miller, “I don’t think anybody on this committee would admit to using the port to let containers sit there because they want to. Everybody has the full intention to get these containers out, but they physically can’t.”
The issue starts to feed itself, and people who pay the fees will be the end consumers. But, there is another example of ineffective government policies aggravating a crisis, pushing the prices up.
In 2022 we may be in a worse situation., and the Americans don’t know anything about this situation.
One remaining thing is to pray and hope that we won’t face any other additional challenges.
Americans, prepare yourself for a terrible and turbulent period.