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This is how explosive US demand for goods disrupted supply chains

President Biden has pushed the nation’s major ports to work around the clock, shipping companies are receiving fined for containers left at ports, trucking is desperate recruitment foreign drivers, and pop-up container yard are in a hurry to get funding to prepare for the holiday. But beneath the shrinking workforce and rusting infrastructure, there is an indisputable truth: the chaos in the current supply chain is driven by demand. Americans are buying more goods than ever before, and the current resources along the supply chain cannot keep up with those who shop in the US.

MarketWatch has collected data from the nation’s nine largest ports showing that, as of September, total container volume in and out of the country was up nearly 22% from a year ago and more than 16% from 2019. This container throughput, as measured in twenty-foot equivalent units, or TEUs, is unprecedented. It is being driven by container imports into the United States, which are up 25% from 2020 and almost 20% from two years ago. Many containers are being sent back empty.

To understand the burden placed on the supply chain, the nation’s nine largest ports handled 37.9 million TEUs of container volumes from January this year to September, compared with 28.3 million total TEUs in same period 2016. In other words, the country’s largest ports are handling 34% more container volumes than they were just five years ago.

The nine ports analyzed by MarketWatch are Los Angeles, Long Beach, New York and New Jersey, Georgia, Houston, Seattle and Tacoma, South Carolina, Oakland and Virginia. NS The Department of Transportation determines the are the container ports handling the most TEUs between January 2019 and September 2021.

“The technical explanation of what’s really going on doesn’t necessarily make for a very good headline. David Shillingford, chief strategy officer of Everstream Analytics, a supply chain risk analysis firm. “But what actually happens is that Americans have more cash than they’ve had for a very long time, causing pent-up demand, and more demand than the supply chain was designed for — that’s the problem. about demand more than anything else.”

At the Port of Los Angeles and the Port of Long Beach on Wednesday, the historic bottleneck had 84 container ships moored, mostly waiting for trucks to load enough containers to make room for the cargo to idling offshore. According to the International Longshore & Warehouse Union, the total number of shipbuilders at Southern California ports has decreased slightly to 14,092 from 14,930 in April 2020. So while imports have increased, so has the number of people present at the ports. port to handle approximately the same container volume.

Gene Seroka, chief executive officer of the Port of Los Angeles, said in a press conference this week that the average seafarer at his port has been working six days a week since the pandemic began. At the same time, the American Cargo Association recently estimated that The nation’s persistent truck driver shortage, the difference between the current number of drivers and the optimal number needed based on freight demand, will reach a historic high of just over 80,000 drivers this year. There is also evidence that long-distance truck drivers are not used due to the fragmented nature of the trucking industry and inefficient procedures at warehouses and distribution centers.

“We continue to increase the number of vessels and their container-carrying capacity across the pond, but we still have the same footprint,” said Frank Ponce De Leon, a coast officer at ILWU in Los Angeles. on the other end when receiving this cargo,” said Frank Ponce De Leon, a coast guard officer for ILWU in Los Angeles. “Lack of trucks, lack of warehouse capacity and rail infrastructure.”

The White House is shuffling, rolling out several initiatives in conjunction with a $1 trillion infrastructure bill to address some supply chain constraints. But it’s not clear how quickly these fixes can help absorb the onslaught of imports into the US.

“It was a combination of unprecedented volumes. . . What none of us expected is going away and different purchasing patterns have really upset the global supply chain,” White House Ports Special Envoy John Porcari said at a news conference on Thursday. October. “Each part of the supply chain is strained.”

https://www.marketwatch.com/story/this-is-how-americas-booming-demand-for-goods-shattered-the-supply-chain-11637242353?rss=1&siteid=rss This is how explosive US demand for goods disrupted supply chains

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