California ports see record backlog as holidays approach

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The backlog of ships waiting to enter California’s two largest ports has hit a fresh record as labor shortages continue to roil the global supply chain and threaten holiday gift giving.

As of Monday, 100 vessels of all kinds were at anchor or in a holding area waiting to enter the ports of Los Angeles and Long Beach, topping the previous record of 97 vessels set on September 19, according to the Marine Exchange of Southern California, which operates the Vessel Traffic Service for those two ports.

“For comparison, ‘normal’ total vessels at anchor, pre-COVID backup, was 17 vessels at anchor with zero in holding areas since 2004, when there were half a dozen,” Kip Louttit, executive director of the Marine Exchange of Southern California, said in a note.

The two ports — which account for about one-third of all US imports — have not had to keep ships in holding areas since 2004 when a railroad issue caused a backlog, Louttit noted, adding that 44 ships were in such zones as of Monday.

Of the total 100 ships waiting to enter the ports, 70 are massive container ships carrying hundreds of thousands of units of goods that are in increasingly scarce supply as American shoppers continue to scour stores, according to the MXSO.

Containers are seen on a container ship docked at Long Beach Ports in Los Angeles, California
The snarled supply chain has helped send prices of goods up across the board.
Sefa Degirmenci/Anadolu Agency via Getty Images

The backlog is likely to only get worse this week, with an above-normal 45 vessels scheduled to arrive over the next three days, the MXSO noted.

At least four container ships arrived more than a month ago, but have been held at anchor waiting to enter the ports and offload their cargo, the group added.

“We have about two weeks’ worth of work sitting at anchor right now,” Gene Seroka, the executive director of the Port of Los Angeles, told CNN on Monday. “The question right now is how do we segment this cargo.”

Cargo shipping containers seen at the Port of Los Angeles in San Pedro, California on Oct. 15, 2021.
Cargo shipping containers seen at the Port of Los Angeles in San Pedro, California on Oct. 15, 2021.
AFP via Getty Images
A shipping port awaiting vessels in California.
A shipping port awaiting vessels in California.

Easing the backlog is crucial for American retailers ahead of the busy holiday season. If companies such as Macy’s aren’t able to stock up on goods that shoppers want, it could be devastating for their historically crucial fourth-quarter performance this year.

The Port of LA is also prioritizing auto parts so that carmakers can boost the supply of new cars, Seroka said. A nationwide car shortage caused largely by a shortage of microchips has driven up the price of new and used cars alike.

Last week, President Joe Biden announced the Port of LA would move to a 24/7 operating schedule in an effort to ease the backlog, but White House officials acknowledged that the effort might not ease the shipping crunch by Christmas.

The snarled supply chain has helped send prices of goods up across the board, putting a burden on American consumers.

The White House, though, has sought to minimize the issue, saying that Americans will still be able to purchase the goods they want — even if they have to be flexible.

“You won’t be able to get the jacket in 15 colors, but you will be able to get the jacket,” Liz Reynolds, special assistant to the president for manufacturing and economic development, said on a call with governors’ representatives, according to a source.

At the same time, two noted economists, including David Blanchflower, warned this week that the US economy is careening into another recession as worries about the labor market and the state of the pandemic have worsened dramatically among consumers over the past two months.

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