The US shipping crisis is not going away as 33 cargo ships float off the coast of LA waiting to dock

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Insider

July 26, 2021

A supply-chain crisis has been brewing off the coast of Southern California for many months as massive freighters wait for dock space to open up.

Current port delays are near a record high. On Friday, 33 ships were anchored off the coast waiting for a spot to open up to unload at Los Angeles and Long Beach ports, according to data from the Marine Exchange of Southern California.

California ports in Los Angeles and Long Beach account for about one-third of US imports. These ports operate as a primary source of imports from China and have been heavily congested for months.

The Southern California ports are facing more congestion than ever, Kip Louttit, executive director of the Marine Exchange of Southern California, told Insider.

“The normal number of container ships at anchor is between zero and one,” Louttit said.

Some of the container ships have been waiting off the shore for weeks, pushing back delivery dates and driving up the cost of transportation. Of the ships waiting to dock, half of them are what Marine Exchange calls “mega-container ships” or ships with the carrying capacity of 10,000 TEUs.

“Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago,” Louttit told Insider. “They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo.”

The ships carry millions of dollars worth of popular imports, including furniture, auto parts, clothes, electronics, and plastics, according to data from the Port of Los Angeles. Supplies of these materials could be heavily depleted in the US due to the backlog of ships.

Louttit said increases in consumer spending and, as a result, a spike in imports, have overwhelmed the ports.

“The ports are setting records moving cargo,” Louttit said.

California port backlogs are already helping drive shortages and delivery delays in the US

California’s port delays peaked in early February, but are nearing the record high once more.

On January 30, Southern California port congestion hit a record high when 38 container ships were waiting along the coast for room to open up to dock and unload, but current capacity is nearly at record levels.

It’s hard to imagine the enormity of the situation without seeing the dozens of boats lining the shores of Southern California. A video from the US Coast Guard captures the sight.

California port delays are just one of many factors piling onto a global supply-chain crisis

The boats waiting outside of the port, which can carry tens of thousands of shipping containers, are adding to a global container shortage, and, as a result, shipping delays.

Customers are already seeing the impact of the delays.  They are facing rising prices and limited options as commodities become increasingly difficult to obtain and produce due to the port delays. Companies are being increasingly forced to compete for containers and delivery dates.

Several major restaurants have issued warnings that they are running short on ingredients and hike prices. Earlier this week, Taco Bell, Chipotle, and Starbucks customers reported multiple locations were running low on key menu items.

In June, Insider’s Anna Cooban reported that local businesses and chains alike were hiking prices to combat escalating transportation costs.