Labor and equipment shortgages along with strong consumer purchasing demand is creating a perfect storm and overwhelming one of the busiest gateways to the U.S. economy. Cargo vessels sit idle offshore from Los Angeles, waiting for a berth opening, while shipping containers stacked five and six-high crowd the the ports of L.A. and Long Beach.
“Anywhere you go, there are just containers everywhere,” stated Weston LaBar, CEO of the Harbor Trucking Association, an industry group in Long Beach representing cargo carriers who haul containers to and from the ports.
Southern California’s infrastructure, which includes terminal operators, shipping liners, longshoremen, and intermodal trucking is used to handling seasonal peaks. This surge, however, is exposing long-neglected issues with delivery delays and impacts across the entire supply chain and has prompted federal regulators to begin investigating the source of problems around major port areas like Los Angeles and New York.
The cost of this gridlock can be significant. A study by the National Bureau of Economic Research in 2012 estimated the cost of just one day of delay in transit to add up to 2.3% in cost. The deficiencies of distribution systems are not isolated to the U.S. Ports in Europe, Asia, and the Panama Canal are experiencing trade slow downs while South Africa's recent upgrades have relieved congestion.