NEW YORK (AP) – A commercial bottleneck born of the COVID-19 outbreak makes U.S. companies eagerly await goods from Asia; while off the coast of California, dozens of container vessels are anchored without being able to unload their cargo.
The pandemic has wreaked havoc on the supply chain since early 2020, when it forced the closure of factories across China. The seeds of the current problems were sown last March, when Americans stayed home and drastically changed their shopping habits: instead of clothes, they bought electronics, fitness equipment and improvement products. of the home. U.S. companies responded to floods that opened Asian factories with orders, prompting a chain reaction of congestion and problems in ports and freight centers across the country as goods began to arrive.
Now, main street companies are forced to wait months instead of the usual weeks for a delivery from China, and no one knows when the situation will be resolved. Owners tell customers a lot, ask for more inventory than usual, and lower expectations of when shipments will arrive.
Alejandro Bras used to be able to place an order in factories in China and expects to receive their products in 30 days. Now, with problems throughout the supply chain, “we’re adding two more months,” he says. And the two months are “doubtful”: it may take even longer.
The Bras company, Womple Studios, sells monthly subscription boxes with educational crafts and activities for children; many of the products are custom made so you can’t find substitutes easily.
Bras has been devoting more time to logistics and not product development, and more time apologizing to customers of the company in Oakland, California, who expect a shipment each month. Customers have been understanding: they realize that the pandemic has disrupted trade and shipping around the world.
The group of ships on the high seas is perhaps the most dramatic symptom of an overflowing supply chain. As production grew in Asia, in the fall more ships began arriving in ports in Los Angeles, Long Beach, and other West Coast cities that the gateways could support. Ships containing up to 14,000 containers have been sitting at sea, some of them for more than a week. Sometimes there were up to 40 ships waiting; typically, there are only a handful, according to the Southern California Marine Exchange, a service that controls traffic and port operations.
“With this type of delay, it will take several weeks to work. It does not disappear. And the new ships are sailing in the United States even as we talk, ”says Shanton Wilcox, PA Consulting’s manufacturing consultant.
But there are also choking points on the ground. It can carry 8,000 trucks to carry the cargo of a ship, says Kip Louttit, executive director of the Southern California Marine Exchange. But when all these trucks hit the road, there is not enough available when port workers try to unload the next ships at the port. Rail freight traffic has also been affected.
“When you have more load, you have a less efficient load movement system,” Louttit says. The pandemic itself is also slowing the flow of goods, leaving out port warehouse workers, he said.
It unites all the problems and, when a ship arrives in port, it takes five to seven days to unload instead of two to three, says Shruti Gupta, an industrial analyst at consulting firm RSM. “This again has consequences for truckers and rail service, because they have to wait until the port clears,” he says.
Companies are also waiting due to the high demand for space on ships and inside shipping containers ranging from 20 to 45 feet in length.
“You can usually book a shipment a couple of days in advance and you currently have to book containers 30 days in advance,” says Peter Mann, CEO of Oransi, a Raleigh-based manufacturer of air purifiers and filters. North Carolina. You should consider shipping times twice as long as normal in your operating plans.
When Mann began to have trouble getting shipments in the fall, he decided to place larger orders: manufacturing the products was not a problem and fewer deliveries meant less waiting time. It has meant investing more money in inventory.
Supply disruptions can be a more serious problem for smaller companies, as, unlike larger players, they may not be able to move production to other countries, such as Western Hemisphere nations. whose products can be shipped to East Coast ports. And large companies can afford to use air travel, which is more expensive than shipping.
Because there is so much competition for containers, the cost of importing increases.
“The price can be five times higher than usual,” says Craig Wolfe, whose company, CelebriDucks, has had trouble getting rubber ducks from China since the start of the pandemic.
One of Wolfe’s shipments was at the dock for three weeks because no wagon was available. Another I was hoping to send in mid-February has yet to leave China.
“He would have arrived by now,” says Wolfe, whose company is headquartered in Kelseyville, California. He is anxious because most of his products are not typical rubber ducks: they are based on presidents and other celebrities and on pop culture trends, such as Harry Potter books and movies. Like Mann, he has placed larger orders than usual to make sure he has enough stock.
Exporters also feel the impact of bottlenecks. When containers are unloaded at ports, many are shipped empty to Asia instead of being detained and filled with American goods.
Isaiah Industries sells its metal roofs in Japan, “but we are having huge delays for containers to be scheduled to ship. So we’re sitting here with orders and products to fill those orders, but there’s no way to ship them, ”says Todd Miller, president of the Piqua, Ohio company.
Miller also expects shipments of overseas raw materials, including sheets known as tar paper that are placed under the tiles. Its problem is that it competes with all other importers to get space on container ships.
“We can get it to happen, but it will take four to six weeks before they can load it onto a ship,” he says.