California’s Container Ship Traffic Jam: The Tip of the Iceberg for Troubled Shippers

Global supply chains must constantly react to a world in motion. From natural disasters to security threats, unprecedented disruptions in the supply chain are inevitable—and a global pandemic is as firm a reminder as any that we can’t always foresee risks until they’re right at our door.

As many companies seek to recover, rebuild, and mitigate risk after a tumultuous year, the effects of the pandemic continue to ripple across the supply chain. As demand increases and manufacturing slows again in the wake of a new variant—not to mention labor shortages worsening and fuel prices continuing to rise—the ongoing container ship traffic jam at West Coast ports like Los Angeles and Long Beach is causing issues across the supply chain.

With the retail season on the horizon, this gridlock presents challenges for shippers who were only just finding their footing again. Here’s how existing problems in the supply chain have been exacerbated by the pandemic—and what companies can do to find a solution in the lead-up to the busiest retail period of the year.

The perfect storm

With pandemic restrictions waning at the beginning of the summer as vaccination rates increased, logistics teams across industries saw resurgent demand. While this was welcome after the economic devastation of the pandemic, the sudden and dramatic increase of inbound cargo quickly created a logjam of container ships, particularly at the California ports. In April, the wait time to load containers onto trains out of Los Angeles reached eleven days, compared to a normal yearly average of around two days, according to port officials. Months later, congestion is beginning to ease, but ships remain lined up as far as the eye can see.

Making matters even worse, the cost of transporting products from the West Coast is prohibitively high right now. Moving goods from Los Angeles to New York City costs around $7,000 on the low end, but many shippers pay as much as $9,000. In comparison, moving goods along the same lanes but in the opposite direction will cost companies around half of that. So, even when their cargo does reach solid ground, shippers can expect to pay through the nose to get it where it needs to be.

More problems on the horizon

As logistics teams brace for the holiday season, a long list of questions abound. How much worse will the logjam get as demand inevitably rises? Will we get our products on shelves before Black Friday? How will we manage rising costs?

Anticipating these problems is the first step, but finding an effective solution could be the difference between staying afloat and sinking. It doesn’t help that, as shippers struggle to get their supply chains moving again, many are also grappling with significant labor shortages across their teams. Even without a global pandemic, recruiting, securing, and retaining logistics talent is a challenging, costly, and time-consuming endeavor. The pandemic only solidified this problem, with a record 4 million people in the U.S. quitting their jobs in April 2021. Without the talent, resources, and capacity to prepare effectively, this holiday season may not be the life preserver many struggling companies have been hoping for.

Navigating the container ship logjam—and a future in flux

If 2020 taught us anything, it’s that change is inevitable, and the supply chain will always be susceptible to new challenges and risks. Unforeseen disruptions like the container ship traffic jam are the name of the game, but they don’t have to sink your operations.

Outsourced logistics management services can provide shippers with the people, knowledge, and support they need to navigate challenging periods—like preparing for the holiday shopping season in the midst of a pandemic. Our staff can augment your existing team, addressing your capacity needs and filling any skills gaps you might have. Leveraging our industry-leading technology, deep industry expertise, and global footprint, we can work at a high level to keep your supply chain moving in the most cost-effective, efficient way possible—so you can focus on recovering and rebuilding.

Find the support you need to navigate the container ship logjam and any other disruptions this year has in store. Contact us to get started.

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