Why are ships jammed to enter America?

Posted on 18th Oct 2021 by rohit kumar

Global supply chains are facing a lot of difficulties. Cargo ships, also known as containers or cargo ships, are lined up on the shores of major ports in California.

"We are facing an unprecedented influx of cargo at the ports of Long Beach and Los Angeles due to changes in production caused by the global pandemic and challenges to a decades-long supply chain," says the mayor of Long Beach, Calif.

What causes the jam and how bad is it?
If you look at satellite photos of the ports of Long Beach and Los Angeles, there is a crowd of cargo ships from which goods are to be unloaded.

These are cargo ships that carry everything from toys to tennis rackets to America's west coast across the Pacific Ocean from Asia.

Marine Traffic, a ship-tracking website, says more than 50 container ships were parked at the ports of Long Beach and Los Angeles on October 13.

At the same time, in September, the ships were standing here for a record.

Janet Porter, chair of the Lloyd's List Editorial Board, says that these two ports are crowded with ships coming from China and if the jam starts here once, it can take a very dangerous form in a few days.

"The whole cycle of arrivals has slowed down. At this time ships have to wait for a few days or even a few weeks to unload their luggage."

According to Container Trades Statistics, in the pre-pandemic period in 2019 and the first eight months of 2021, 25 percent more cargo ships from Asia came to the Americas. At the same time, the number of ships between Asia and Europe remained the same.

There is also a line of ships on the east coastline at Savannah Port in Georgia. August was the second busiest month.

Containers are full in shipyards and the process of transporting them has been affected due to the corona epidemic. At the same time, there has also been a significant reduction in supply because many ports are closed in China and other places.

Are Americans Buying More Stuff?

The answer is yes, Americans are doing this instead of going on vacation or going to dinner.

If we compare the condition before the epidemic, then there has been an increase of 22 percent in the demand for consumer goods. The figures for this increase have been compared between February 2020 and August 2021.

Toys, games, and sporting goods grew by 74% and household goods by 49%, according to estimates from Capital Economics Group.

At the same time, Professor Christopher Tang of the University of California Los Angeles counts some other reasons for this import.

"Currently several cargo ships are carrying festive goods, including Halloween decorations, billions of dollars in Christmas decorations, and artificial Christmas trees and lights," he says.

Are there reasons other than the pandemic?
Professor Tang says that America is bringing the economy back on track, due to which there has been an increase in demand.

Private companies are calling their employees back to the office, after which there has been an increase in the demand for office goods, these include computers, printers, servers. Most of the containers coming from Asia contain the same goods that are stuck at ports.

Along with this, the demand for those goods has also increased in the offices so that the possibility of spreading the coronavirus can be reduced.

Professor Tang says, "Ventilation equipment, including several air filters, are in these containers, waiting to be unloaded."

Gary Hafbauer, the senior fellow at the Peterson Institute for International Economics, says there has also been a problem of skilled people here because there is a shortage of workers, truck drivers, and rail crew at the port, who can move the goods.

"On a large scale, this reflects the impact of the delta variant, but retirement is also a big factor in this. Truckers have also taken retirement in large numbers."

Could this have been avoided?
"I don't think anyone had foreseen such a huge increase in demand, especially when the ships were almost closed during the pandemic," says Porter.

The huge shipwreck off the coast of California has sparked a heated debate over the supply chain in the US, as there were calls to improve infrastructure for a long time.

The White House chief of staff has said the Biden administration is dealing with a "supply chain problem" inherited from the previous government.

However, experts have been pointing out problems in logistics capacity at US ports long before the pandemic.

"It shows that there has been an insufficient investment. The port's capacity doesn't deplete very quickly," Hafbauer says.

The White House Task Force has been formed which will try to reduce the jamming of the ship and the port of Los Angeles will be opened for a long time so that this problem can be fixed.

However, industry experts do not expect this jam to end anytime soon.