Cargo ships carrying hundreds of thousands of shipping containers full of holiday gifts, electronics, decorations, etc., are disappearing off the coast outside America’s largest ports, threatening to disrupt this year’s Black Friday and holiday market season – and there may be more Worst in the store in the coming years.
The fact that the new coronavirus will disrupt global supply chains in 2020 is well known and clearly understood, but even supply chain professionals, millions of businesses large and small, and the managers of our vital retail infrastructure I didn’t expect things to take that long.
Worse, there are fears that the world’s mixed supply chains will not be cleared soon, if at all.
“We’ve never had a yard so full before, “Georgia Ports Director Griff Lynch told NY Times this week. The port of Savannah, the third largest container port in the United States, is clogged with at least 80,000 shipping containers, an increase of 50% from the typical port volume at this time of year.
Part of the problem is that importers who own these containers do not come to pick up their goods. Either they don’t have a warehouse to keep the products themselves, or they can’t find truck drivers to haul the containers.
And while these containers sit on docks in Savannah, more than 20 massive cargo ships are anchored up to 17 miles offshore, waiting to make room in port so they can unload even more shipping containers shipped from factories across Asia.
In California, meanwhile, about half a million shipping containers crammed into and on more than 60 ships anchored at sea, some of which are almost half a kilometer with a length and ability to carry more than 20,000, 20-foot shipping containers simultaneously.
“Part of the problem is that the ships are twice or three times bigger than the ships we saw 10 or 15 years ago,” said Kip Lutitt, chief executive of the Southern California Maritime Exchange. Inside information in September. “They take more time to unload. You need more trucks, more trains, more warehouses to load.”
To complicate matters further, there are a critical shortage of truck drivers in the United States, so even as cargo volumes increase rapidly, the number of drivers that ports rely on to clear docks remains roughly the same as it was before Covid — or perhaps even less.
On top of that, there is the actual work of managing all these containers.
The more congested the port becomes – both in terms of the number of containers to be moved and the number of trucks and trains needed to take them out – the more difficult it becomes to actually find a particular shipping container and move it from a container pile to the vehicle or locomotive whose task is to bring it to the retailer’s warehouse.
The transport containers are stacked five deep in the port of Savannah. If you need to get to the second container from the bottom of the pile, you need to move the containers above it to take it out and put it on a truck. In other ports, stacks can rise even higher, making work much more challenging.
And all the while, the number of new containers arriving is growing, so that even the port of Savannah recently broke a record for activity in one day, with more than 15,000 trucks hauling cargo from the port, a single ship – MSC Agadir from Hong Kong, with a capacity of 8,886 equivalent units (TEU) – unloaded their cargo in Savannah, making Lynch’s efforts play two steps forward-one step back.
“The supply chain is congested and flooded,” he told the NY Times. “At this stage, it is not sustainable. Everything is imperfect. “
The port crisis could disrupt holiday shopping plans, and this is just the beginning
The port crisis is not just a problem for logistics professionals or even just for Americans, but such port congestion affects Chinese ports, too.
And if ships can’t load up and leave Chinese ports on time, they can’t make the week-long trip to the ports of destination to unload all those holiday items everyone expects to start ordering online in the next month and a half.
Reuel Joyner, owner of a boutique furniture company in Savannah called 24E Design Co., told the Times that the delay in delivery could not fulfill customers’ orders for products made in China and India.
“Where we received things in 30 days,” he said, “we are now told six months.”