Posted on 10/15/2021 5:44:17 AM PDT by blam
As if relentless, fiscally-stimulated global demand for (made in China) products, coupled with soaring input prices, Covid-crippled indutries, production-throttling energy crises and containership parking lots off major ports wasn’t enough to cripple global supply chains, we can throw in one more factor that will make “just in time” deliveries a thing of the pre-Biden past and will ensure that nobody gets their presents this Christmas.
The weather.
A tropical storm that’s lashing southern China is causing a ship backlog from Shenzhen to Singapore, Bloomberg reports as it warn of even emptier store shelves come Christmas.
Shipping data compiled by Bloomberg show there are currently 67 container ships anchored off Hong Kong and Shenzhen, 22% more congested than median daily counts from April through Oct. 14. Another 61 remain anchored off China’s massive Ningbo port in Shanghai.
Container ship positions as of Oct. 14 heatmapped in yellow.
For once there is no “unintended consequence” behind this pile up – it’s the result of Typhoon Kompasu freezing transit lanes, closing schools in Hong Kong and canceling stock market trading in the financial hub on Wednesday. It also sparked the latest containership domino-effect at the worst possible time, with 37 ships now waiting off Singapore, 18% more congested than normal. And with Singapore one of the most efficient ports in the world and a key hub for containers to be moved from one vessel to another while in transit, any disruption in the city-state is bound to have far-reaching ramifications.
The incremental delays will make an already fragile supply chain, that much more unstable: according to the Busan Port Authority in South Korea, vessels are having to wait about three days to berth and that’s causing so-called transshipment cargo to pile up. Meanwhile, almost 40 ships are anchored off Los Angeles, 4.5% more congested than usual, while 11 are cooling their heels off the coast of Malaysia at Tanjung Pelepas, creating a congestion rate about 25% above the median. For Vietnam’s dual hub of Ho Chi Minh City and Vung Tau, things are even worse, with current congestion 38% higher than the median.
Operators are scrambling to find a solution to this chaos which seems to get worse with every passing day: “shipping companies and other stakeholders are trying to resolve the backlog because there are real concerns that many year-end holiday goods will never reach consumers in time,” said Um Kyung-a, an analyst at Shinyoung Securities in Seoul. “This month will be the most challenging period but hopefully things will start to ease from the fourth quarter.”
This is a “hopeful” line we have heard every month since May. It has yet to come true.
Located at the gateway – both literal and metaphorical – of global Transpacific supply chains, accessible port terminals are an indispensable anchor to any hopes of normalizing supply chains. Alas, congestion at container terminals around the world has added pressure to already stretched supply chains. Covid-19 cases at ports, along with shortages of shipping containers and labor have aggravated the problem as exporters try to send goods to the U.S. and Europe before the end of the year.
According to Singapore Logistics Association chairman Dave Ng, vessels are waiting one to three days to berth at most major ports in Southeast Asia, including Singapore, The wait is more than three days at major ports in Northeast Asia and could extend to over a week in other parts of the world. And any incremental delays only cascade exponentially, adding more days to an already broken system.
“Global port congestion has introduced more uncertainty into planning and booking of sea shipments,” Ng told Bloomberg. “Ocean freight costs have increased five to six times from the levels pre-Covid and this has translated into higher operating costs for logistics companies.”
Logistics companies have been working to improve business productivity by sharing resources and leveraging technology, Ng said. But they still face difficulties in filling jobs, particularly driving and warehousing, which could impact operations in the near term, he said.
Meanwhile, Bloomberg reported this week that shipping giant Maersk said earlier this week that it’s diverting some ships from the U.K.’s largest container port because of congestion tied to a trucker shortage. Many logistics companies are finding it difficult to find drivers to pick up and deliver containers, causing a backlog at the Port of Felixstowe.
Port congestion and lack of containers has driven shipping rates to record levels this year. Spot levies to haul a 40-foot container to Los Angeles from Shanghai peaked at $12,424 last month before easing to $11,173 as of Oct. 7, the Drewry World Container Index show. Rates to Rotterdam from Shanghai hit an all-time high of $14,807 last week. Shipping rates dipped modestly in the latest week, but as we explained previously, this was for the worst possible reason namely a sharp drop in China output. Expect a sharp spike in the next few weeks as throttled Chinese production returns.
Exporters and shipping companies have been trying to find alternative routes to avoid the backlog. Some cargo from China is now being shipped to Busan and then reloaded on ships bound for Russia’s east coast before being put on trains and sent through to Europe.
In an act of sheer desperation, the Biden admin announced on Wednesday that the Port of Los Angeles will begin operating 24 hours a day, seven days a week as part of efforts to break the logjam. However, as Rabobank explained earlier this morning, simply getting containers out of the terminal at LA achieves very little if you don’t the solve chassis crisis; if the containers sit there waiting for trucks; or for truckers; or for rail. All you do is move the logjam from sea to shore – and that can potentially make matters worse. The Transportation Secretary running this task force is a vocal opponent of the ‘so build a bigger road’ mentality that ends up with bigger roads and the same traffic logjam.
So how about we make this Christmas about Jesus Christ rather than stuff from China?
I got second hand from a container leasing company that retailers wrote of Christmas weeks ago, and they’re focusing on Easter goods.
In other words, any notion of “If this doesn’t get fixed soon, we’ll miss Christmas”, is delusional. That horse left the barn long ago.
It’s all going to be OK. The Biden administrqtion is now ‘thinking about it’.
The Democrats are fully invested in a globalized world, which I think they can manage using American money when they are not in full power as they are today. But globalization is finished. It was in the decline for several years with China becoming more expensive and more aggressive. Globalization can only exist when America is fully invested in keeping the sea lanes open for all. If the US Navy goes home then every country near a trade route will start declaring fees for passage. This will be like the Barbary Pirates, but on a global scale.
American citizens are wondering why they are paying to make German or (insert nation here) products to China or (insert nation here) reach their destination safely and cheaply
Companies relying on long supply lines will frequently have less or no product or more expensive product to sell. They will re-shore or nearshore or go out of business. This would have happened anyway, but we were “fortunate” that Covid gave us a wakeup call.
Pedo Joe might start building the wall once everyone starts leaving.
The ‘perfect storm’….thanks, “O” and Joe!
I guess Buttigieg has it all in hand...
Instead of sitting off the west coast for weeks on end why doesn’t some of these container ships use the Panama Canal and unload somewhere along the Gulf coast. I’ve read that since the modernization and widening and deepening of the canal most of the container ships are able to pass through the canal.
While it is easy to be snarky and make this all about Christmas or cheap Chinese junk.....the truth is that the majority of what is sitting on those ships are materials and components needed to manufacture things.
Our domestic manufacturing is stalled, waiting on materials or subcomponents manufactured not just in China, but in other nations around the world.
Remember, if you are getting a fuel injection system from Spain, it is stuck at their ports because they cannot unload the ships and put your goods onto them.
It is a total collapse affecting many industries.
Yet another Marxist design to cancel holidays, traditions and our way of life. However, they can’t take Christ from those they’re trying to destroy. Maybe a lesson from “the Grinch” comes to mind.
“why doesn’t some of these container ships use the Panama Canal and unload somewhere along the Gulf coast.”
Some are doing that but it takes twice as long and costs twice as much. Additionally some of those ports can’t handle the larger container ships. Then there are still the labor and ground transportation issues.
L
It's a hard lesson for domestic manufacturers to learn. Maybe Americans should invest in American manufactured subcomponents. If this doesn't wake people up, then nothing will.
Many cargo ports cannot unload the larger ships. Also, diverting to a different port is a crapload of paperwork. Biden may actually be slow-walking any requests because it would take money from California and give it to ports in the Gulf states, Florida, South Carolina, etc.
Yes, political punishment for not voting the "right way"
Too busy with their new twins.
Their thinking about it is something like them suggesting each illegal entering carry some goods with them. They can then send them to where the goods need be delivered.
Did I hear correctly the country’s Transportation Secretary is home on parental leave because the fag adopted a kid? If true, this place is so far from being reclaimed as the distance to the nearest star outside our system. No wonder the universe is heating up, we are approaching Hell.
Those ships in US Waters, anchored for a long time, possession is 90% of the law?
Navy SEALs Inspecting Radioactive Ship Off New Jersey
Really interesting...the ship's next port of call was going to be Norfolk, VA.
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