Nearly half a million shipping containers are stuck off the coast of Southern California as the ports operate below capacity

Ships sit off the coast of Seal Beach, CA, on Tuesday, January 26, 2021. Cargo ships enduring one of the worst U.S. port bottlenecks in more than a decade faced down another obstacle as they waited to offload near the ports of Los Angeles and Long Beach

Brittany Murray/MediaNews Group/Long Beach Press-Telegram via Getty Images

• Key US ports in Southern California are facing near-record backlogs of cargo ships.
• The Port of Long Beach has moved to increase operating hours, which may not be enough to fix the issue.
• Shortages of workers, equipment, and a lack of coordination across the transportation industry created a ripple effect.
• See more stories on Insider's business page.

The largest port in the US faces a near-record backlog of cargo ships, and there's no end in sight.

On Tuesday, Los Angeles had nearly half a million 20-foot shipping containers - or about 12 million metric tons of goods - waiting in drift areas and at anchor for spots to open up along the port to dock and unload, according to data pulled from the Marine Exchange of Southern California's master queuing list. The port has 19 mega-container ships waiting to dock, the largest of which is carrying 16,022 20-foot shipping containers.

"Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago," Kip Louttit, the executive director of the Marine Exchange of Southern California, told Insider earlier this year. "They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo."

The ports had 90 container ships in the port, 63 of which were waiting off the shore on Tuesday - a number far above the ports pre-pandemic average of zero to one ships at anchor. Due to the volume of ships waiting along the shore, some ships are floating further than 20 miles off the shore in order to keep shipping lanes clear, according to Louttit.

Today, ships at the port can wait in these positions for as long as a month, Marine Exchange data shows. As of Tuesday, a vessel from Asia has been waiting off the coast since September 5 - an issue that experts warn will cause goods to miss the holiday shopping season.

Despite the backlog, ports are operating at lower capacities

The ports are only operating at 60% to 70% capacity, Uffe Ostergaard, president of the North America region for German ship operator Hapag Lloyd told The Wall Street Journal.

"That's a huge operational disadvantage," Ostergaard said, pointing to the fact that the two ports are closed for several hours most days, as well as on Sundays - making it more difficult to keep pace with the ports in Asia and Europe that are sending the goods on a 24/7 schedule.

A container ship docked next to cranes at the port of Mombasa, Kenya, in October 2019.

Baz Ratner/Reuters

In September, the Port of Long Beach moved to increase their hours of operation to 24-hours on Monday through Thursday. The Port of Los Angeles did not follow suit, choosing instead to maintain its existing hours.

The traditional routine at the ports includes two shifts for longshore workers: 8 a. to 4 pm and 6 pm to 3 am. The ports are closed on Sundays. Overnight shifts and Saturdays are more expensive and rarely used, The Journal reported.

Longer hours may not be enough.

Gene Seroka, executive director of Port Los Angeles, said longer hours do little to address the backlog when truckers and warehouse operators have not similarly extended their hours. It's not optimal for truckers to pick up loads at night, especially when they'd have to find alternative places to store the goods when the warehouses are not open at night.

What's more, many warehouses near the West Coast don't have space for the goods. About 98% of warehouses in Southern California's logistics-heavy Inland Empire region are fully occupied, while the entire Western U.S. has a 3.6% vacancy rate, according to The Journal.

"It has been nearly impossible to get everyone on the same page towards 24/7 operations," Seroka said.

Shortages of workers and equipment exacerbate delays

A struggle to hire enough workers has had a tremendous impact on the transportation industry nationwide, causing headaches at ports, warehouses, railways, and trucking. Many companies have fewer workers than before the pandemic but face significantly more work due to the boom in demand for goods since the pandemic started.

The shipping delays have made it more difficult for truckers to meet their deadlines and stay on schedule when it comes to picking up goods at ports.

The backlog has also caused a shortage of containers and the chassis needed to haul them. Containers wait for extended periods in ports, and it takes about twice as much time for operators to return the chassis, the Journal said.

Associated Press

Some cargo companies have even taken to storing their goods in the containers due to the lack of space at warehouses - as shipping containers represent a cheaper option than renting storage space. Last week, Flexport said shipments between Asia and North America were facing "critical undercapacity" when it came to available equipment.

The U.S. is not the only country struggling to keep up with a build-up of cargo ships. On Sunday, Bloomberg reported that COVID-19 shutdowns had created a ripple effect, pushing the prices of goods across the globe higher.

The supply chain snarls are expected to create major issues for holiday shoppers. Executives have warned the shipping crisis will continue into 2023.

Do you work at the ports in Los Angeles and Long Beach? Reach out to the reporter from a non-work email at gkay@insider.com

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Contributer : Business Insider https://ift.tt/39Gf5Rs

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