On the shores of Los Angeles, more than two dozen container vessels loaded with exercise bikes, electronics and other high-demand imports have been idle for more than two weeks.
In Kansas City, farmers in Asia are struggling to send soybeans. In China, glow up on the structure of a furniture factory designated for North America.
Around the planet, epidemics have disrupted trade to an extraordinary degree, increasing the cost of transporting goods and adding new challenges to global economic recovery. The virus has thrown the choreography of cargo moving from one room to another.
At the center of the storm is the shipping container, the workhorse of globalization.
Americans stranded in their homes have increased orders through Chinese factories, most of which are transported in containers in the Pacific – metal batches that carry the atmosphere to the tops of huge ships. With homes in the United States full of office fee furniture and basement-filled bedrooms with treadmills, shipping demand has surpassed the availability of containers in Asia, creating a shortage of boxes at American ports.
Containers carrying millions of masks to countries in Africa and South America at the onset of the epidemic remain there, empty and cluttered, as shipping carriers focus their ships on their most popular routes – connecting North America and Europe with Asia.
And at ports where ships call, land to unload goods, they are stuck for days in a constant floating traffic jam. The epidemic and its restrictions have limited the availability of dock workers and truck drivers, causing delays in handling cargo from Southern California to Singapore. Every container that cannot be unloaded in one place is a container that cannot be loaded elsewhere.
“I’ve never seen anything like this,” said Lars Mikael Jensen, head of the Global Ocean Network at AP Mલરller-Mursk, the world’s largest shipping company. “All the links in the supply chain have been pulled. Ships, trucks, warehouses. “
Economies around the world are absorbing the ripple effects of disruption at sea. Higher costs for transporting American grain and soybeans threaten to push up food prices in Asia.
The containers have been emptied at the ports of Australia and New Zealand; There is a shortage of containers at the Indian port of Kolkata, forcing electronics manufacturers to move trucks of vehicles more than 1,000 miles west to the port of Mumbai, where supplies are better.
Rice exporters in Thailand, Vietnam and Cambodia are going to some ships in North America due to the impossibility of keeping containers safe.
The coastal turmoil has been a major boon for shipping companies like Mersk, which reported record-high freight prices in the last three months of 2020, with Pretex earning more than 7 2.7 billion in the report.
No one knows how long this recession will last, although some experts believe the container will be scarce by the end of the year, as the factories it makes – in almost all of China – are kept to meet demand.
Since their first deployment in 1956, containers have loaded goods into standard-sized receptacles and hoisted cranes over rail cars and trucks – effectively revolutionizing the world’s shrinking trade.
The container is about how a flat panel display made in South Korea is moved to a plant in China that combines smartphones and laptops, and how those finished devices are shipped to the United States in the Pacific.
Any hitch means delay and extra cost for someone. The epidemic has disrupted every part of the journey.
“Everyone wants everything,” said Akhil Nair, vice president of global career management at Seco Logistics in Hong Kong. “Infrastructure can’t continue.”
Havoc starts like this
More than a decade ago, during the global financial crisis, shipping companies were seen tormenting their businesses.
When a mysterious virus emerged in China early last year – the government was asked to shut down factories to end its spread – the shipping industry was preparing to resume operations. Carriers cut off their services, disabling many of their vessels.
Yet even in the midst of the recession, orders for protective gear used by frontline medical personnel, such as surgical masks, increased, much of it made in China. Chinese factories collapsed, and container ships carried their products to places around the planet.
Unlike the financial crisis, when it took years for economic recovery to gain momentum, Chinese factories were back in the second half of 2020, with strong demand to carry.
As shipping companies deployed every ship that could float, they focused on the most sought-after routes – especially from China to North America.
The pressure mounted as Americans renewed their spending. Deprived of holidays and restaurant meals, they bought video game consoles and pastry mixers. They furnished their homes for distance work and distance education.
According to an analysis by C-Intelligence, a Copenhagen-based research firm, exercise equipment shipped by container from Asia to North America between September and November more than doubled over the same period a year earlier. Shipments of stoves, ranges and cooking equipment nearly doubled during that period. Disinfectants increased by 6,800 percent.
Alan Murphy, the founder of the research group, said: “
Broadly speaking, the volume of global trade in 2020 is only 1 percent lower than last year. But that doesn’t reflect how the year evolved – with a plunge of more than 12 percent in April and May, followed by a similar dramatic reversal. Placing the container in the wrong place, and pushing the shipping price to an extraordinary height, the system could not be configured.
In New York, Baum-Essex’s Peter Bam’s company uses factories in China and Southeast Asia to make umbrellas for Costco, cotton bags for Walmart and ceramics for bed baths and beyond. Six months ago, he was paying about 25 500,500 to send a 40-foot container to California.
“We just paid 67,000, 000,” he said. “This is the highest freight rate I’ve seen in 45 years in this business.”
In early September, he waited 90 days to secure space on the ship for wicker chairs and table containers.
Another US importer, Highline United, which imports women’s shoes from China and Hong Kong for brands such as Ash, Isaac Mizrahi, pays five times more than its normal price for shipping.
“It’s a classic supply and demand issue,” said Kim Bradley, chief operating officer at Mass’s Dedham-based company.
Traffic back-up at California’s jammed ports
At the twin ports of Los Angeles and nearby Long Beach, unloading has been slowed by a shortage of dock workers and truck drivers, as the virus has made some sick while others push for quarantine.
“The backlog in volume is expected to last until midsoom,” Los Angeles Port Director Jean Seroka said at a recent board meeting.
Los Angeles ships have made anchor locations available, resorting to so-called drift boxes – where they float freely, like planes flying over a crowded airport.
Sportswear makers from Under Armor to Hasbro, major consumer brands for sport and toy making, deal with shipping hurdles.
The pilot points to the port crowd as a factor behind the delay in delivering his high-distance stationary bicycles. To shorten the waiting time, the pilot outlined plans to invest 100 100 million in air shipping and fast sea freight.
But even in normal times, airfreight is eight times the cost of a sea shipment. Most of the cargo holders of passenger jets carry airfreight. With air travel extremely limited, so are the cargo slots available.
Before some shippers left for Los Angeles, 400 miles north to Oakland, California. But the containers are stacked on ships in the arrangement arranged by their locations. A sudden change in plans means moving the stacks around like a jinga game.
And the port of Ak Cland deals with its epidemic problems. Brian Brands, maritime director of ports, said dockworkers pay home rent to children who do not attend school.
“In normal times, ships come directly to Auckland,” Mr. Brandes said. “Right now, we’re doing seven to 11 ships anywhere at Anchorage.”
Empty containers are being shipped back to Asia
Inactivity on the American West Coast has also caused problems thousands of miles away.
One of America’s largest agricultural exporters, Scholar fills grain and soybeans in containers at terminals such as Chicago and Kansas City, and then sends them to Pacific ports by rail on their way to Asia.
Given the prices received by containers in Asia, shipping carriers are increasingly unloading in California and then immediately shipping empty boxes back to Asia, without waiting to load grain or other American exports. This has vaccinated companies like Scholar to protect the passage.
Delays at ports often cause Scholar’s containers to collide with various ships, forcing the company to redo its custom paperwork – another delay.
“It’s the reliability of the schedule that’s a problem,” said Sion Haley, Sculler’s carrier relations manager. “It’s a global issue.”
No one knows how this ends
In recent weeks, shipping carriers have aggressively moved empty containers to Asia, where availability has increased, according to data from a consultant container exchange in Hamburg, Germany.
Some experts assume that as vaccinations increase and life returns to normal, Americans will again reduce their cost – from goods to experiences – to the need for containers.
But even so, the retailer will start making inventory for the holiday shopping island.
The stimulus spending plan passed by Congress could generate a rental plan that could generate another wave of purchases, as previously employed people could replace aging devices and add to their clothing.
Michael Brown, a container analyst at CBW in New York, said there could be a whole other subset of customers who are not able to consume it. “You’ve probably been seeing a little shortage for a while.”
