Big supply chain news from the US overnight, with Joe Biden saying the Port of Los Angeles will run 24/7 in the run-up to the festive period.
The port complex of Los Angeles and Long Beach (which announced a few weeks ago it would operate round the clock) is the US’s busiest, but we doubt opening it up all day and all night will help much with Biden’s aim of speeding up delivery times. Let us tell you why.
For starters, the port has been operating above full capacity for months, with staff working far more hours than they usually would. In theory, staying open at night and over the weekend could add more capacity and be the “game changer” that Biden believes it can be. But that’s only the case if the rest of the supply chain is purring. Which it isn’t. There are snafus all over the place. Seafarers have been stranded for months past the end of their contracts. The truck drivers and railway workers needed to take the cargoes from the shore to further inland are in short supply too. And even if they were not, it’s not clear importers have the space to store any more goods.
Biden seems to think these problems can be addressed by the rest of the US supply chain working at night too. But how can they do that when their staff are already stretched? And when warehouses are full to the brim?
There are global factors, too. Most of those container ships that you see lined up waiting to enter the Port of Los Angeles have travelled across the Pacific from China. And guess what? There are delays getting into ports there too. According to project44, a data firm specialising in supply chain data, as of October 7 there were around 386 ships anchored and moored off Shanghai and Ningbo, of which 228 were cargo and 45 container vessels.
The lead times — that is, the total journey time from China to the US West Coast — are up more than 50 per cent pre-pandemic as a result.
These delays on both sides of the Pacific mean empty containers are still stacked up in ports like Los Angeles, and are not where they need to be. Ie, Asia.
In time, containers can return to the right place. Logistics firms can attract more workers with better terms and conditions, the shipping lines can order more vessels. But workers cannot be trained, nor vessels built and containers shipped across oceans, overnight. They’re not an Amazon delivery.
Ultimately, the convenience of this kind of almost-instant delivery to which we’ve become so accustomed is where the problem lies.
The fact that so many venues have been shuttered during the past 18 months has meant we have spent far less on (mostly local) services and far more of our disposable income on consumer durables. Most of those kettlebells and games consoles we’ve ordered online reach us after travelling from Asia by containership. World trade, naturally, has boomed.
A lot of us — not the longshoremen, or the seafarers, or the truckers, but a lot of us — are still sitting at home waiting for today’s parcel to arrive. Mine came a couple of hours ago. Yet few of us see how our actions contribute to the daily flow of news about not being able to get our hands on goods right here, right now.
When we see empty shelves, we lambast our system as Soviet. In reality, it is — as a family member pointed out to us at the weekend — a lean, just-in-time, hyper-globalised model of capitalism that’s got us here. It’s about time we saw the shortages for what they are, instead of asking those who’ve helped make this export boom happen — despite a global pandemic — to do even more than they’ve done already.
Source: Economy - ft.com
