NEW YORK – Trade bottles born from the COVID-19 revolution have seen U.S. businesses eagerly await Asian goods – while off the coast of California, dozens of vessels are anchored, inability to load the cargo.
The pandemic has damaged the supply chain since early 2020, when it forced the closure of factories across China. The seeds of the current problems were sown in March last year, when Americans stayed home and their purchasing habits changed dramatically – instead of clothing, they bought electronics, fitness equipment and products. home improvement. U.S. companies responded by flooding Asian factories to reopen with orders, leading to a chain reaction of congestion and snags at ports and hubs across the country as goods began to arrive.
Main Street businesses now have to wait months instead of the usual weeks for deliveries from China, and no one knows when the situation will be resolved. Owners do a lot of explaining to customers, ordering more inventory than usual and lowering their expectations of when the shipment will arrive.
Alejandro Bras used to place an order to factories in China and expects to receive its products in 30 days. Now, with problems across the supply chain, “we’re adding an extra two months,” he says. And those two months are “iffy” – it can take even longer.
Bras ’company, Womple Studios, sells monthly membership boxes with educational and activity crafts for kids; many of the products are custom-made, so substitutes cannot be easily found.
Bras has found that he spends more time on logistics than product development, and more time apologizes to Oakland, California, the company ‘s customers are expected to ship monthly. Consumers have come to understand – they understand that the pandemic has disrupted shipping and trade around the world.
The collection of offshore vessels is perhaps the most impressive sign of an oversupply supply chain. As production increased in Asia, more ships began to fall at ports in Los Angeles, Long Beach and other West Coast cities than the gates could handle. Vessels with as many as 14,000 boxes have sat off the shore, some for more than a week. At times as many as 40 boats have been waiting; usually no more than a few, according to Southern California Maritime Trade, a service that monitors port traffic and operations.
“With this type of backup, it will take several weeks to work through. He is not leaving. And new ships are sailing to the US even as we speak, ”said Shanton Wilcox, a manufacturing consultant with PA Consulting.
But there are also choking points on land. It can take 8,000 trucks to remove the cargo from a boat, said Kip Louttit, executive director of Southern California Maritime Trade. But when these trucks hit the road, there is not enough available when dock workers try to unload the next vessels in port. Goods traffic was also affected.
“When you have more goods, you have a less efficient freight movement system,” Louttit says. The pandemic itself is also slowing down the flow of goods, moving workers in warehouses at the ports, he says.
Put all the problems together, and when a ship enters the port, it will take five to seven days to load instead of two or three, says Shruti Gupta, a business analyst with the consulting firm RSM. “This again affects lorries and rail services, as they have to wait for the port to leave,” she says.
Businesses are also waiting because of the high demand for space on ships, and within shipping vessels that are between 20 and 45 feet long.
“A call can usually be sent by day or two and now you have to book vessels 30 days in advance,” says Peter Mann, CEO of Oransi, a manufacturer of air purifiers and filters based there. the Raleigh, North Carolina. It must report load times twice as long as usual in its operational plans.
When Mann started having trouble getting loads in the fall, he decided to place larger orders – there was no problem getting the goods and less delivery meant less waiting time. It has meant investing more money in an inventory.
Supply disruption can be a worse problem for smaller companies because, unlike larger players, they may not be able to shift production to other countries – for example, Western Hemisphere countries whose products can be sent to east coast ports. And it is better for large companies to use air freight, which is more expensive than shipping.
With so much competition for ships, the cost of imports is climbing.
“The price can be as high as five times the average,” said Craig Wolfe, who has had trouble getting his company CelebriDucks to get rubber ducks from China since the outbreak began. .
One of Wolfe’s sails sat on the dock for three weeks because rails were not available. Another who was expected to be deported before mid-February has yet to leave China.
“It would have arrived by now,” says Wolfe, who owns the company in Kelseyville, California. He is concerned that most of his products are not like ordinary rubber ducks – they are based on presidents and other celebrities and pop culture trends such as Harry Potter books and movies. Like Mann, he has placed larger-than-usual orders to make sure he has enough stock.
Exporters are also feeling the effects of the bottles. When ships are loaded at the ports, many are sent back to Asia instead of being stored and packed with U.S. goods.
Isaiah Industries sells its metal roofs to Japan, “but there is a long delay in getting ships to ship them. So we sit here with orders and product to fill those orders but with no way to remove them, ”said Todd Miller, president of Piqua, Ohio.
Miller is also awaiting shipments of raw materials from abroad, including sheets commonly known as tar paper placed under roof tiles. Its problem is that it competes with all other imports for space on shipping vessels.
“We can produce it, but it will take four to six weeks before they can be loaded onto a boat,” he says.