Cargo Ships Stranded, Supply Chain Impediment Stonewalls Businesses
The COVID-19 pandemic has created severe congestion in the shipping industry, with dozens of cargo ships anchored just off the coast of California unable to offload their cargo.
The pandemic disrupted the global supply chain at the start of 2020. As a result, factories were closed across China, meaning they weren’t able to deliver goods to the American market. At the same time, strict lockdowns changed shopping habits drastically. Demand for home fitness equipment, consumer electronics, and home improvement gear increased orders from US companies to Asian factories, creating congestion in ports and freight transport centers.
More than 40 freighters were forced to wait their turn to dock into the LA and Long Beach ports in January. The problem has continued to this day and shows no signs of subsiding. Because of these delays, businesses have had to wait months to receive goods from China instead of weeks, as was the case before the pandemic.
“With this type of backlog, it will take several weeks to work through that. It doesn’t go away. And new ships are sailing to the US even as we speak,” Shanton Wilcox from PA Consulting said.
According to Kip Louttit, executive director of the Marine Exchange of Southern California, the problem extends to dry land. That’s because more than 8,000 trucks are required to unload a single freight ship. “When you have more cargo, you have a less efficient cargo moving system. The pandemic itself is also slowing down the flow of goods, sidelining workers in warehouses at the ports,” Louttit said.
This supply distribution bottleneck is more disruptive for smaller businesses that can’t afford air freight. Larger companies that can move their production away from China have been less likely to feel the effects.
Supply chain impediments also have an effect on exports, as unloaded containers are sent without being filled with US goods. Delays in container scheduling result in manufacturers having to wait between four and six weeks before loading their goods onto the ship.
Julia A. is a writer at SmallBizGenius.net. With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.
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