WORLD TRADE: Panic At Sea: Nearly 2,000 Ships Stuck Outside Ports As Container Shortage Intensify – video

Panic At Sea: Nearly 2,000 Ships Stuck Outside Ports As Container Shortage Intensify

Epic Economist – April 21. 2022

The already stressed global supply chain is all set to face a fresh wave of backlogs, congestion, and shortages as new shockwaves emerge in almost every link of the system. Conditions continue to worsen by the day as Chinese ports operate at bare minimum capacity due to virus-related restrictions imposed by the government.

The disruption in the flow of goods in and out of the country is expected to reach alarming proportions and cause serious distortions in the market in the weeks ahead. The problem is particularly worrying between the US and China — the world’s busiest shipping route — but the restrictions will have a cascading impact all across the globe.       

Experts say that the disruption faced last year will be insignificant compared to what is coming. On top of all that, the US is facing a critical shortage of workers that is threatening to result in more delivery delays, empty shelves, and widespread chaos at key container ports.

Authorities have effectively neutered Shanghai, not only a city of 25 million people but also the world’s largest seaport for container traffic. They have also enforced full or partial lockdowns in 23 cities, impacting more than a fifth of the Chinese economy.

According to Reuters estimates, at least 373 million people —in cities that represent roughly 40% of China’s gross domestic product — have been affected by the most recent round of lockdowns across the country. The American consumer is going to be particularly affected given the fact that the U.S. imported more goods from China than anywhere else in the world over the past decade.

Last year alone, we imported over $435 billion worth of goods from Chinese cities and sent another $125 billion to the country in exports, according to the Office of the United States Trade Representative. And when stay-at-home mandates end, the shipping nightmare begins.

Jon Monroe, an ocean shipping and supply-chain expert said that an overwhelming movement of goods will drown shipping lines and ports once the lockdowns are lifted. “It’s probably worse than Wuhan. You’re going to have a lot of pent-up orders,” he explained.  Right now, 477 bulk cargo ships are stranded at sea off Chinese ports waiting for a berth to dock and deliver resources from metal ore to grain into the country. All in all, the number of container vessels waiting outside of Chinese ports today is 195% of what it was in February.

In America, after signs of progress that the backlogs of containerships stacked up outside ports were easing, it now appears that the trend is reversing itself. The ports of Los Angeles and Long Beach are facing another cargo surge as earlier-than-usual back-to-school and peak season imports collide with the massive backlog of freight from mainland China.

“Higher gasoline prices are affecting labor availability in the warehouse sector. Some workers in the hourly wage category feel they cannot afford current gasoline prices, so they are simply not showing up to work. For anyone who’s earning about $15 an hour, the price of gas is a big hit,” Weiss highlighted.

Conditions have been pretty dire for dockworkers, too. Now, a confrontation between workers and employers at some of the most critical ports on Earth is looming and it threatens to halt operations along the West Coast. Dockworkers have been handling massive amounts of cargo for exceedingly long hours every day. They’re asking for better pay and more regulation to prevent companies from forcing workers to do overtime after already long shifts.

A labor impasse could worsen the traffic jams that are already keeping dozens of ships waiting in the Pacific. It also can aggravate shortages and send already high prices for consumer goods soaring. All of these factors are making disruption a permanent part of the commercial landscape of the United States.

Our economic growth is being dampened by prolonged inflation, supply chain bottlenecks, volatility in energy markets, and investor uncertainty – and the convergence of all of these problems going to create catastrophic consequences for everyone in this country.

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Comments

  • Brother Man  On 04/26/2022 at 6:02 am

    “Conditions continue to worsen by the day as Chinese ports operate at bare minimum capacity due to virus-related restrictions imposed by the government.”

    Why are the communists in China so afraid of the virus? How much longer are they gonna continue to chase their shadows?

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