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    As Dockworkers Near Contract’s End, Many Others Have a Stake

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    LOS ANGELES — David Alvarado barreled south along the highway, staring through the windshield of his semi truck toward the towering cranes along the coastline.He had made the same 30-minute trek to the Port of Los Angeles twice that day; if things went well, he would make it twice more. Averaging four pickups and deliveries a day, Mr. Alvarado has learned, is what it takes to give his wife and three children a comfortable life.“This has been my life — it’s helped me support a family,” said Mr. Alvarado, who for 17 years has hauled cargo between warehouses across Southern California and the twin ports of Los Angeles and Long Beach, a global hub that handles 40 percent of the nation’s seaborne imports.He weathered the blow to his paycheck early in the pandemic when he was idling for six hours a day, waiting for cargo to be loaded off ships and onto his truck. Now the ports are bustling again, but there is a new source of anxiety: the imminent expiration of the union contract for dockworkers along the West Coast.If negotiations fail to head off a slowdown, a strike or a lockout, he said, “it will crush me financially.”The outcome will be crucial not only for the union dockworkers and port operators, but also for the ecosystem of workers surrounding the ports like Mr. Alvarado, and for a global supply chain reeling from coronavirus lockdowns and Russia’s invasion of Ukraine. Inflation’s surge to the highest rate in more than four decades is due, in part, to supply chain complications.The contract between the International Longshore and Warehouse Union, which represents 22,000 workers at 29 ports from San Diego to Seattle, and the Pacific Maritime Association, representing the shipping terminals, is set to expire on Friday. The union members primarily operate machinery like cranes and forklifts that move cargo containers on and off ships.In a statement this month, representatives of the two sides said that they didn’t expect a deal by the deadline but that they were dedicated to working toward an agreement.The negotiations have centered largely on whether to increase wages for the unionized workers, whose average salaries are in the low six figures, and expanding automation, such as using robots to move cargo containers, to speed up production, a priority for shipping companies.“It will crush me financially,” David Alvarado said of any work stoppage.Stella Kalinina for The New York TimesTrucks lined up to enter the Port of Los Angeles. Any slowdown, strike or lockout could further snarl the global supply chain.Stella Kalinina for The New York Times“Automation allows greater densification at existing port terminals, enabling greater cargo throughput and continued cargo growth over time,” Jim McKenna, the chief executive of the Pacific Maritime Association, said in a recent video statement on the negotiations.In an open letter posted on Facebook last month, the union president, Willie Adams, attacked moving toward automation, saying it would translate to lost jobs and prioritizes foreign profits over “what’s best for America.”The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.“Automation,” Mr. Adams wrote, “poses a great national security risk as it places our ports at risk of being hacked as other automated ports have experienced.”As the negotiations, which began in early May, continue, record levels of cargo have arrived here.In May, the Port of Los Angeles had its third-busiest month ever, handling nearly one million shipping container units, largely stocked with imports from Asia. Twenty-one ships were waiting to dock outside the local ports this week, down from 109 in January, according to the Marine Exchange of Southern California.On a recent trip here, President Biden — who authorized a plan last year to keep the Port of Los Angeles open 24 hours a day — met with negotiators to urge a swift agreement. Leaders on both sides say Mr. Biden has worked behind the scenes on the matter, hoping to avoid delays.When a breakdown in talks resulted in an 11-day lockout in 2002, the U.S. economy lost an estimated $11 billion. President George W. Bush eventually intervened, and the lockout was lifted. In 2015, when negotiations went on for nine months, the Obama administration intervened after the standoff led to a work slowdown and congestion at West Coast ports.Mr. Biden’s early intervention could help stave off severe backlogs, said Geraldine Knatz, a professor of the practice of policy and engineering at the University of Southern California.“In the past, the federal government would swoop in at the end when negotiations were at a stalemate,” said Ms. Knatz, who was executive director of the Port of Los Angeles from 2006 to 2014. “The relationship that developed between the ports and the Biden administration as a result of the supply chain crisis is something that did not exist before.”The contract between the International Longshore and Warehouse Union and the Pacific Maritime Association is set to expire this week. Stella Kalinina for The New York TimesEven so, contingency plans are in place, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. Some retailers began pushing up their timetables months ago, ordering supplies long before they needed them, he said, and using ports along the East and Gulf Coasts when feasible.In an interview, Gene Seroka, executive director of the Port of Los Angeles, said he didn’t believe the looming contract deadline would lead to any delays: All the parties involved, he said, know that it’s already an exceptionally busy time for the region.Retail imports account for 75 percent of all cargo coming into the ports, and with back-to-school and holiday shopping seasons nearing, Mr. Seroka said he did not expect cargo volumes to shrink to more typical levels until next year.“Everyone is working as hard as they can,” Mr. Seroka said.But for some retailers, the current limbo brings back painful memories.In early 2015, as delays arose during contract talks, Charlie Woo laid off more than 600 seasonal workers from his company, Megatoys.“It was rough back then,” Mr. Woo said on a recent morning from his 330,000-square-foot warehouse in Commerce, Calif., an industrial city in Los Angeles County not far from the ports.Mr. Woo started Megatoys in 1989 and now imports around 1,000 cargo containers from China every year. The 40-foot containers come filled with small toys like plastic Easter eggs and miniature rubber soccer balls and basketballs, which his employees package into baskets sold at grocery stores and bigger outlets like Walmart and Target.During the pandemic disruptions last fall, some of his shipments were stalled by nearly three months — delays that ultimately translated into a 5 percent drop in sales for his company, which Mr. Woo said brings in tens of millions of dollars annually.He’s bracing for another hard year.“I expect problems; I just don’t know how big the problem will be,” said Mr. Woo, who also owns a manufacturing plant near Shenzhen, China, and said he hoped more U.S. terminals moved toward more automation.“We must find innovative solutions to catch up with the ports in Asia,” Mr. Woo said.Charlie Woo started Megatoys in 1989 and now imports around 1,000 cargo containers from China every year. Stella Kalinina for The New York TimesShipping containers at the Port of Los Angeles. The current limbo brings back painful memories for some retailers.Stella Kalinina for The New York TimesOn a recent afternoon, Mr. Alvarado, the truck driver, reminisced about the early days of the career he’d been born into.During summer vacations as a little boy, he’d ride shotgun with his father, who has driven a semi truck for nearly four decades at the ports, and they’d listen to Dodger baseball games together.“This is all I ever wanted to be,” Mr. Alvarado, 38, said. Over the years, he has seen many childhood friends move away because they could not afford to live here.It hasn’t always been easy for him, either. Last fall, with more than 80 cargo carriers anchored off the coast here, in part because of the lingering pandemic and a surge of imports ahead of the holiday season, he sometimes waited for hours before he finally got a load, said Mr. Alvarado, who is among the roughly 21,000 truck drivers authorized to pick up cargo at the ports.For an independent contractor, time is money: Mr. Alvarado works 16 hours some weekdays and aims to pick up and drop off four loads each day. When he does that consistently, he said, he can make up to $4,000 a week, before expenses.During the worst of the pandemic delays, he was lucky to get two loads a day, and although things have improved in recent months, he now frets about fuel prices.“Inflation has been intense,” he said.Filling up with 220 gallons for the week now typically costs $1,200, double that of several months ago, Mr. Alvarado said.“It all starts to add up,” he said. “You wonder if you should think about doing something else.”As for the prospects in the labor talks, Mr. Alvarado said he was trying to remain optimistic. The union workers, he said, remind him of his own family: men and women from blue-collar upbringings, many of them Latino with deep family ties to the ports. A work stoppage would be painful for many of them, too.“It will hurt all Americans,” he said.As he drove past the ports, Mr. Alvarado turned his truck into a warehouse parking lot, where the multicolored containers lined the asphalt like a row of neatly arranged Lego blocks.It was his third load of the day, and for this round, he didn’t have to wait on the longshoremen to load the carrier onto his truck. Instead, he backed his semi up to a chassis, and the blue container snapped into place.He pulled up Google Maps on his iPhone and looked at the distance to the drop-off in Fontana, Calif.: 67 miles, an hour and half.It might, Mr. Alvarado said, end up being a four-load day after all. More

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    Biden Casts Inflation as a Global Problem During a Visit to the Port of Los Angeles

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    The visit to the nation’s busiest entry point for goods comes as President Biden struggles to show progress on resolving supply chain issues that are fueling inflation.LOS ANGELES — President Biden on Friday defended his administration’s efforts to deal with inflation, just hours after a new report showed a surprise spike in prices that puts new pressure on the White House to ease the burden on consumers.Mr. Biden used the Port of Los Angeles as a backdrop to highlight his fight against inflation, delivering a speech about how his team has tried to speed up the delivery of goods disrupted by the coronavirus pandemic.“The job market is the strongest it’s been since World War II, notwithstanding inflation,” Mr. Biden said, standing on the battleship Iowa, a decommissioned warship that has been turned into a museum.With shipping containers piled up behind him, Mr. Biden emphasized that his administration had taken action last year to reduce congestion at ports, allowing 97 percent of all packages to be delivered on time during the holiday shopping season.But six months later, serious problems remain and persistent inflation has become a major political liability for Mr. Biden.The war in Ukraine has disrupted flows of food, fuel and minerals, adding to pandemic-related shortages and pushing inflation to multidecade highs. Data released on Friday morning showed inflation picking up again, rising 1 percent from the previous month. Compared with one year ago, consumer prices rose 8.6 percent, the largest annual increase since 1981.While some clogs in the supply chain look to be clearing, analysts say that trend may yet stall — or even reverse — in the months to come, as retailers enter a busier fall season and dockworkers on the West Coast renegotiate a labor contract that could lead to work slowdowns or a strike.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Greedflation: Some experts contend that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.For Investors: At last, interest rates for money market funds have started to rise. But inflation means that in real terms, you’re still losing money.Mr. Biden said he understands that Americans are anxious.“They are anxious for good reason,” he said. But he stressed that inflation is largely the result of increases in the price of gasoline and food, and he blamed the price hikes in those goods on Russia’s invasion of Ukraine.Mr. Biden argued that large price increases in the United States were part of a global problem with inflation and that Americans were in better shape than their counterparts elsewhere because of a strong jobs market and a declining budget deficit.He also lashed out at nine shipping companies that he said had used the global economic situation to increase prices by 1,000 percent, artificially adding to the cost of goods around the world. He did not name the companies.But he said they “have raised their prices by as much as 1,000 percent.”He called on Congress to crack down on shipping companies that raise prices.“The rip-off is over,” he said.Mr. Biden is correct that soaring inflation is a global problem. In a note to clients on Friday, Deutsche Bank Research said the United States ranked 48th for its inflation rate on a list of 111 countries, just above the middle of the pack.But that is little comfort to U.S. households struggling with rising costs.Analysts say the U.S. logistics industry is heading into its busier fall season, when retailers bring in products for back-to-school shopping and the holidays. Chinese exports are also on the rise as an extended coronavirus lockdown lifts in Shanghai.And, most crucially, dockworkers on the West Coast are renegotiating a labor contract with port terminal operators that expires at the end of this month. If they fail to reach an agreement, West Coast ports may see slowdowns or shutdowns that would delay deliveries and add to supply chain gridlock.Over the past two decades, labor negotiations led to at least three such slowdowns or stoppages that resulted in delays. In recent weeks, some companies that typically ship into the West Coast have begun routing some goods to the East or Gulf Coasts to try to avoid any logjams.Gene Seroka, the executive director of the Port of Los Angeles, said he expected labor talks to go beyond the July 1 contract expiry date, but downplayed the risks to trade.“It’s important to know, with all this cargo on the way, the rank-and-file dockworkers will be out on the job every day,” he said.“And the employers know they’ve got to get these products to market,” he added. “So we’re going to give these people some room. Let them negotiate in their space, and the rest of us are going to work on keeping the cargo and the economy moving.”Dockworkers on the West Coast, including at the Port of Los Angeles, are renegotiating a labor contract with port terminal operators that expires at the end of this month. Failure to reach an agreement could further delay deliveries.Stella Kalinina for The New York TimesMr. Biden has kept close relationships with labor unions and may hesitate to put pressure on dockworkers to conclude any talks. But a work slowdown or strike would be bad news for the administration, which has frequently come under attack about rising prices.By some metrics, supply chain pressures have been easing in recent weeks. The average global price to ship a 40-foot container of goods fell to $7,370 as of June 3, down from a peak of more than $11,000 in September, though that was still five times higher than before the pandemic began, according to the Freightos Baltic Index.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    The Pandemic’s Nerd Celebrities

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    When old rules of global commerce no longer seem to apply, masters of esoteric data — ocean shipping container times, anyone? — are thrust into the limelight.“Ship Happens: The Miniseries” is a podcast that would not exist if not for the pandemic, which prompted consumers to begin ordering couches and computer screens so voraciously that the world’s factories and ports could not keep up.But as furniture delays and car shortages began to dominate the headlines last year, Eytan Buchman and his colleagues at Freightos, a global shipping platform, saw an opportunity.“You never really pay attention to something until it’s broken,” said Mr. Buchman, chief marketing officer at the company. “Part of it was giddiness that, hey, people care.”Freightos, which started its podcast about supply chains in November, is among a spate of data providers whose wonks and once esoteric offerings have been catapulted into the spotlight by a pandemic that has rewritten the rules of global commerce and economics.Not that Mr. Buchman was happy that everything felt broken. But he saw that Freightos could help. He and his colleagues had a wealth of shipping data and expertise at their disposal, and they began to think of ways to share it with the world, producing an index of ocean container travel times, releasing the audio program and ramping up media appearances.What could have been a short moment of prominence has lasted well into 2022. Nothing — not shipping routes, not consumer spending, not the labor market and definitely not inflation — seems to be behaving the way it did before the coronavirus struck in early 2020.Inflation is running at its fastest rate in 40 years, and data next week is likely to show that prices climbed more than 8 percent over the year through March. Supply chains remain roiled, employers are desperate to fill open jobs, and Americans have surprised economists by spending right through the rapid price increases and rampant uncertainty.Researchers and policymakers are flying blind, and both they and ordinary people are turning to experts like Mr. Buchman as they try to sketch out a new map of a changed economic landscape. “A very select circle of enlightened individuals found supply chains interesting before, but it was not a widely shared passion,” said Phil Levy, chief economist at Flexport, a freight forwarding and customs brokerage company — displaying the sort of supply chain deadpan that bigger audiences, relatively speaking, are now enjoying.According to a profile kept by Bloomberg, Mr. Levy has racked up 26 unique media mentions so far this year, after 26 in all of 2021 and 15 in 2020. Suddenly, every economist and economics writer seems to be a trade analyst, trying to suss out what might happen to supplies and prices.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.“Normally, when one does forecasting, you look at past experiences,” Mr. Levy said. “That changed with the pandemic.”The revolution started in the toilet paper aisle. At the onset of the pandemic, consumers abruptly started to shop differently. Nobody needed coffee to go or manicures; everyone wanted new home-office furniture.As the government sent out repeated stimulus checks and offered more generous unemployment insurance and families spent more time at home, Americans spent the money on goods rather than the services that consumed a big chunk of their budgets before the pandemic. Even as the aid has faded and business has returned to something approaching normal, demand for things has remained unusually strong.The world’s ships, ports and factories fell behind early in the pandemic, and they have been unable to fully catch up. The situation has only been intensified by unanticipated disruptions like a giant cargo ship’s getting stuck in the Suez Canal. The Ever Given spent six immobile days, drawing global attention to the precariousness of supply chains and ocean commerce — and increasing demand for experts who could explain it.“That was a turning point in freight fame,” Mr. Buchman recalled fondly.For Mr. Levy and his colleagues, the situation was not funny, per se — the blockage was poised to cause problems for customers — but it did spark a flurry of memes in Flexport’s internal Slack messaging channels. (One that sticks in his memory was a photo of the stranded ship superimposed with the words “I told you not to listen to the Waze directions.”)Ever Given stands as a symbol of a larger phenomenon in the pandemic economy: Disruptions keep surfacing, throwing an already struggling system even further out of whack. The mismatch between supply and demand has stoked inflation, which has surprised policymakers both because it has been so rapid and because it has proved long-lasting.And the upheaval extends beyond the world of shipping.Companies cannot find enough workers, in part because the pandemic appears to have accelerated a demographic shift. Baby boomers, who were entering retirement age, left the labor market in large numbers — and it is unclear if they will return. Parents coping with unpredictable child care also left the work force. Employers are grappling with the possibility that workers are in the midst of a “Great Resignation,” possibly encouraged by savings amassed during the pandemic. The labor market shortages have given them a chance to ask for higher pay and better workplace conditions.As the coronavirus era enters its third year, the economic mysteries are many: Will those workers come back? Will America’s appetite for new couches ever be sated? Is there any price that consumers will not pay for cars?Fiona Greig doesn’t know all of the answers. But she has data that might allow her — and others — to come closer than they otherwise would.“I’m now receiving inbound requests from asset managers in Germany, from all walks — our own Federal Reserve Bank, the White House, et cetera,” said Ms. Greig, director of consumer research and co-president at the JPMorgan Chase Institute.The economic data amassed by Fiona Greig at the JPMorgan Chase Institute has become closely watched.Melissa Lyttle for The New York TimesEarly in the pandemic, the institute focused on one metric that was of great interest to a lot of people: what people could spend. The now widely cited graphic uses Chase data to show how much cash households in different income bands have in their checking accounts in near real time, and policymakers and Wall Street econometricians alike have been using it to gauge the spending power of different groups of consumers.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    As Inflation Surges, Biden Targets Ocean Shipping

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    The president is targeting shipping companies that have jacked up prices during the pandemic, but critics say bigger economic forces are at work.With inflation surging at its fastest pace in 40 years, President Biden has identified a new culprit that he says is helping fuel America’s skyrocketing prices: The ocean vessels that ferry containers stuffed with foreign products to America’s shores each year.Shipping prices have soared since the pandemic, as rising demand for food, couches, electronics and other goods collided with shutdowns at factories and ports, leading to a shortage of space on ocean vessels as countries competed to get products from foreign shores to their own.The price to transport a container from China to the West Coast of the United States costs 12 times as much as it did two years ago, while the time it takes a container to make that journey has nearly doubled. That has pushed up costs for companies that source products or parts from overseas, seeping into what consumers pay.Mr. Biden has pledged to try to lower costs by increasing competition in the shipping industry, which is dominated by a handful of foreign-owned ocean carriers. He has cited the industry’s record profits and directed his administration to provide more support for investigations into antitrust violations and other unfair practices.Congress is also considering legislation that would hand more power to the Federal Maritime Commission, an independent agency that polices international ocean transportation on behalf American companies and consumers.The bill, which has bipartisan support, would authorize the commission to take action against anticompetitive behavior, require shipping companies to comply with certain service standards and regulate how they impose certain fees on their customers. Mr. Biden is pushing lawmakers to add a provision that would allow the commission and Justice Department to review applications for new alliances between companies for antitrust issues, and reject those that are not in the public interest.The House passed its version of the bill in December; it must be reconciled with a Senate version.But it’s unclear to what extent more government oversight and enforcement will actually bring down shipping costs, which are being driven in large part by soaring consumer demand and persistent bottlenecks. Global supply chains are still plagued by delays and disruptions, including those stemming from the Russian invasion of Ukraine and China’s broad lockdowns in Shenzhen, Shanghai and elsewhere.“As a standard matter of economics, if you have inelastic supply and experience a surge in demand, you will see a rise in prices,” said Phil Levy, the chief economist at Flexport, a logistics company.The effect is expected to worsen in the coming months. Shipping rates typically take 12 to 18 months to fully pass through to consumer prices, said Nicholas Sly, an economist at the Federal Reserve Bank of Kansas City.“The goods that are being affected by shipping costs today are really the goods that consumers and American households are going to be buying many months from now, and that’s why those costs tend to show up later,” he said.Some of the price increases from late last summer have yet to work their way through into consumers, he said, and the conflict in Ukraine is causing further disruptions.Shipping prices have already skyrocketed so high that, for some products, they have erased companies’ profit margins.The cost to ship a container of goods from Asia to the U.S. West Coast surged to $16,353 as of March 11, nearly triple what it was last year, according to data from Freightos, a freight booking platform. While supply chain congestion showed some signs of easing in January and February, the Russian invasion of Ukraine has quickly worsened the situation along with lockdowns in China that have closed factories and warehouses.Analysts at Capital Economics, in a research note on Wednesday, said that it was still possible for China to suppress coronavirus infections without causing widespread disruption to global supply chains. “But the risk that global supply chains links within China get severed is the highest that it has been in two years,” they said.American businesses that use ocean carriers have been pushing for additional oversight of what they say is an opaque, lightly regulated industry.One of the main complaints among importers and exporters is that ocean carriers are charging customers huge and unexpected fees for delays in picking up or returning shipping containers, which are often mired in congestion in the ports or in warehouses. American farmers, who have struggled to get their goods overseas, say that ocean liners have refused to wait in port to load outgoing cargo or skipped some congested ports entirely. As a result, some have periodically been unable to get their products out of the United States.Eric Byer, the chief executive of the National Association of Chemical Distributors, said American companies were having trouble getting chlorine to clean swimming pools, citric acid to make soft drinks and phosphoric acid to add to fertilizer through American ports.“It’s taking weeks upon months, and they’re getting nickelled and dimed on costs. There are a lot of fees that are being imposed on products waiting in the San Pedro Bay,” he said, referring to the body of water outside the busy California ports of Los Angeles and Long Beach.“It’s been a lot of turmoil and challenges, a lot of unreliability,” said Patti Smith, the chief executive of DairyAmerica, which exports milk powder to foreign factories to be made into baby formula. Her company has sometimes been unable to get its products out of West Coast ports, she said, and has racked up extra warehousing costs and unexpected fines because of the delays.While Ms. Smith said she supported the administration’s efforts to enhance oversight of the shipping industries, she wasn’t sure that would do much to bring down overall prices.“I wouldn’t say it would necessarily lower prices. I think it might put prices more on a level playing field,” she said.The White House insists that its efforts can drive down costs, portraying the measures Mr. Biden announced as a way to calm skyrocketing inflation, which has become a huge economic concern among voters. Consumer prices surged 7.9 percent in the year to February, a 40-year high.American demand for foreign products, and for space on container ships, shows little sign of easing.Erin Schaff/The New York TimesThe White House has pointed to rapid consolidation in the industry over the past decade as a driver of higher prices, saying that three global shipping alliances now control 80 percent of global container ship capacity, and increased shipping costs would continue to fuel inflation. “Because of their market power, these alliances are able to cancel or change bookings and impose additional fees without notice,” the administration said in a fact sheet.The Russia-Ukraine War and the Global EconomyCard 1 of 6Rising concerns. More

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    Ukrainian Invasion Adds to Chaos for Global Supply Chains

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    Russia’s military incursion is severing key supply chains and setting off a scramble among global companies to comply with new sanctions.WASHINGTON — The Russian invasion of Ukraine has rattled global supply chains that are still in disarray from the pandemic, adding to surging costs, prolonged deliveries and other challenges for companies trying to move goods around the world.The clash in Ukraine, a large country at the nexus of Europe and Asia, has caused some flights to be canceled or rerouted, putting pressure on cargo capacity and raising concerns about further supply chain disruptions. It is putting at risk global supplies of products like platinum, aluminum, sunflower oil and steel, and shuttering factories in Europe, Ukraine and Russia. And it has sent energy prices soaring, further raising shipping costs.The conflict is also setting off a scramble among global companies as they cut off trade with Russia to comply with the most far-reaching sanctions imposed on a major economic power since the end of the Cold War.The new challenges follow more than two years of disruptions, delays and higher prices for beleaguered companies that use global supply chains to move products around the world. And while the economic implications of the war and sweeping sanctions on Russia are not yet clear, many industries are bracing for a bad situation to get worse.“Global supply chains are already hurting and stressed because of the pandemic,” said Laura Rabinowitz, a trade lawyer at Greenberg Traurig. She said the effects would vary for specific industries and depend on the length of the invasion, but the impacts would be magnified because of an already-vulnerable supply chain.“There’s still tremendous port congestion in the United States. Freight costs are very high. Factory closures in Asia are still an issue,” she said.Companies with complex global supply chains, like automakers, are already feeling the effects. Volkswagen, which had already announced it was suspending production at its main factory for electric cars, said Tuesday that it would also be forced to shut down production at several other factories, including its main factory in Wolfsburg, Germany, in coming weeks because of parts shortages.Automakers could see shortages of other key materials. Ukraine and Russia are both substantial sources for palladium and platinum, used in catalytic converters, as well as aluminum, steel and chrome.Semiconductor manufacturers are warily eyeing global stocks of neon, xenon and palladium, necessary to manufacture their products. Makers of potato chips and cosmetics could face shortages of sunflower oil, the bulk of which is produced in Russia and Ukraine.And if the conflict is prolonged, it could threaten the summer wheat harvest, which flows into bread, pasta and packaged food for vast numbers of people, especially in Europe, North Africa and the Middle East. Food prices have already skyrocketed because of disruptions in the global supply chain, increasing the risk of social unrest in poorer countries.On Tuesday, the global shipping giant Maersk announced that it would temporarily suspend all shipments to and from Russia by ocean, air and rail, with the exception of food and medicine. Ocean Network Express, Hapag-Lloyd and MSC, the world’s other major ocean carriers, have announced similar suspensions.“The war just makes the worldwide situation for commodities more dire,” said Christopher F. Graham, a partner at White and Williams.Jennifer McKeown, the head of global economics service at Capital Economics, said the global economy appeared relatively insulated from the conflict. But she said shortages of materials like palladium and xenon, used in semiconductor and auto production, could add to current difficulties for those industries. Semiconductor shortages have halted production at car plants and other facilities, fueling price increases and weighing on sales.“That could add to the shortages that we’re already seeing, exacerbate those shortages, and end up causing further damage to global growth,” she said.International companies are also trying to comply with sweeping financial sanctions and export controls imposed by Europe, the United States and a number of other countries that have clamped down on flows of goods and money in and out of Russia.In just a few days, Western governments moved to exclude certain Russian banks from using the SWIFT messaging system, limit the Russian central bank’s ability to prop up the ruble, cut off shipments of high-tech goods and freeze the global assets of Russian oligarchs.The Biden administration said the technology restrictions alone would stop about a fifth of Russian imports. But the impact on trade from the financial curbs is likely to be even larger, cutting off Russia’s imports from and exports to nearly all of its major trading partners, said Eswar Prasad, a professor of trade policy at Cornell University.“Even when trade flows may take place directly between Russia and its trading partners, the reality is that payments often have to go through a Western-dominated financial system, and usually have to go through a Western currency,” he said.In a statement on Saturday, the president of the European Commission, Ursula von der Leyen, said that Europe and its allies were “resolved to continue imposing massive costs on Russia” and that disconnecting Russian banks from SWIFT would also halt Russian trade.“Cutting banks off will stop them from conducting most of their financial transactions worldwide and effectively block Russian exports and imports,” she said.The economic consequences of these moves are not yet entirely clear. Russia accounts for less than 2 percent of global domestic product, so the implications for other countries may be somewhat limited.The departures board displayed flight cancellations at Sheremetyevo Airport in Moscow on Monday.Sergey Ponomarev for The New York TimesBut for the Russian government and the economy, both of which are heavily dependent on trade to generate revenue, the impact could be catastrophic. Capitol Economics has estimated Russian gross domestic product could contract by 5 percent this year, a change that in isolation would knock just 0.2 percentage points off global growth.Caroline Bain, chief commodities economist at Capitol Economics, said financial sanctions were halting the trade of metals and agricultural commodities, likely exacerbating strains in global supply chains.Credit Suisse and Société Generale have suspended financing for commodity trading with Russia, as has the Industrial and Commercial Bank of China, she said.Russia’s Attack on Ukraine and the Global EconomyCard 1 of 6A rising concern. More

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    Crunch at Ports May Mean Crisis for Family Farms

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    It’s just 60 miles from El Dorado Dairy in Ontario, Calif., to the nation’s largest container port in Los Angeles. But the farm is having little luck getting its products onto a ship headed for the foreign markets that are crucial to its business.The farm is part of one of the nation’s largest cooperatives, California Dairies Inc., which manufactures milk powder for factories in Southeast Asia and Mexico that use it to make candy, baby formula and other foods. The company typically ships 50 million pounds of its milk powder and butter out of ports each month. But roughly 60 percent of the company’s bookings on outbound vessels have been canceled or deferred in recent months, resulting in about $45 million in missed revenue per month.“This is not just a problem, it’s not just an inconvenience, it’s catastrophic,” said Brad Anderson, the chief executive of California Dairies.A supply chain crisis for imports has grabbed national headlines and attracted the attention of the Biden administration, as shoppers fret about securing gifts in time for the holidays and as strong consumer demand for couches, electronics, toys and clothing pushes inflation to its highest level in three decades.Yet another crisis is also unfolding for American farm exports.The same congestion at U.S. ports and shortage of truck drivers that has brought the flow of some goods to a halt has also left farmers struggling to get their cargo abroad and fulfill contracts before food supplies go bad. Ships now take weeks, rather than days, to unload at the ports, and backed-up shippers are so desperate to return to Asia to pick up more goods that they often leave the United States with empty containers rather than wait for American farmers to fill them up.The National Milk Producers Federation estimates that shipping disruptions have cost the U.S. dairy industry nearly $1 billion in the first half of the year in terms of higher shipping and inventory costs, lost export volume and price deterioration.“Exports are a huge issue for the U.S. right now,” said Jason Parker, the head of global trucking and intermodal at Flexport, a logistics company. “Getting exports out of the country is actually harder than getting imports into the country.”Agriculture accounts for about one-tenth of America’s goods exports, and roughly 20 percent of what U.S. farmers and ranchers produce is sent abroad. The industry depends on an intricate choreography of refrigerated trucks, railcars, cargo ships and warehouses that move fresh products around the globe, often seamlessly and unnoticed.U.S. farm exports have risen strongly this year, as the industry bounces back from the pandemic and benefits from a trade deal with China that required purchases of American agricultural products. Strong global demand for food and soaring commodities prices have lifted the value of U.S. agricultural exports more than 20 percent over last year.Still, exporters say they are leaving significant amounts of money on the table as a result of supply chain problems. And many farmers are now struggling to keep up with soaring costs for materials like fertilizer, air filters, pallets and packaging, as well as find farmhands and drivers to move their goods.A survey by the Agriculture Transportation Coalition, which represents exporters, found that 22 percent of foreign agriculture sales on average were being lost as a result of transportation challenges.Delays at ports have particularly hurt products that move in corrugated metal containers, like cheese, butter, meat, walnuts and cotton.One company, Talmera USA Inc., which exports milk powder, cheese and dairy ingredients like lactose, had a shipment delayed so many times that its load finally wound up on the original vessel it was assigned to after the ship had left the port in Seattle, circumnavigated Asia and returned weeks later.Mr. Anderson said that his company’s customers were beginning to look to suppliers in Europe, New Zealand and other countries for their purchases, even though the U.S. dairy industry has a reputation for high quality. “Frankly none of that matters to the customer if we can’t get it there,” he said.Part of the problem is that shipping companies are able to charge far more to ferry goods from Asia to the United States than vice versa, so they don’t want to waste time waiting for a less lucrative load departing from the West Coast.According to data from Freightos, an online freight marketplace, the cost to ship a 40-foot container from Asia to the U.S. West Coast soared to $18,730 in November — more than 17 times what it cost to make the reverse trip.As a result, more than 80 percent of the 434,000 20-foot containers exported out of the Port of Los Angeles in September were empty — up from about two-thirds in September 2020 and September 2019.Mario Cordero, the executive director of the Port of Long Beach, said that the price differential encouraged shipping companies to get their containers “back to Asia A.S.A.P. so you can load it with import items.”“And unfortunately the American exporter is impacted by this approach,” he said.El Dorado is part of one of the nation’s largest cooperatives, California Dairies, which manufactures milk powder for factories in Southeast Asia and Mexico.Adam Perez for The New York TimesThe company ships more than a thousand 20-foot containers of dairy products out of the country each month.Adam Perez for The New York TimesIn recent months, up to 60 percent of the company’s bookings on outbound vessels have been canceled.Adam Perez for The New York TimesA supply crunch in the trucking industry is also affecting farmers, as truckers find better pay and hours delivering holiday gifts than hauling soybeans and swine.Tony Clayton, the president of Clayton Agri-Marketing Inc., in Jefferson City, Mo, exports live animals around the world for breeding. He said the company is competing at both ports and airports for space for dairy heifers, swine and goats. And many livestock truckers have found that they can earn more hauling dry freight.“It is a challenge,” Mr. Clayton said. “We’re all fighting and competing for those people who will sit behind the steering wheel.”The infrastructure bill that Congress passed on Nov. 5 aims to remedy supply chain backlogs by investing $17 billion in American ports, many of which rank among the least efficient in the world.The bill also includes funding to improve railways, roads and waterways, as well as a provision to fund pop-up container yards outside the Port of Savannah, in Georgia, to ease congestion. It will also lower the minimum age of truckers who can cross state lines to 18, in a bid to attract more workers to a profession that has become a key bottleneck in supply chains.In September, the U.S. Department of Agriculture also announced it would dispense $500 million to help farmers deal with transportation challenges and rising materials costs.John D. Porcari, the Biden administration’s port envoy, said farm exports are a “primary focus” for the administration, and that the White House was trying to encourage private sector companies, including ocean carriers, to get the supply chain moving.The White House held a round table with agricultural exporters on Friday, and Mr. Porcari plans to visit the Port of Oakland, in California, one of the biggest export points for agriculture, this week.“We know that some sectors have had more trouble than others, and we’re working to eliminate those bottlenecks,” Mr. Porcari said in an interview. While agricultural exporters have welcomed long-term infrastructure investments, they remain concerned about more immediate losses. Mr. Anderson — whose company is responsible for nearly 10 percent of America’s milk supply and a fifth of American butter production — said he had been frustrated that much of the public dialogue from the government and in the media had focused more on consumer imports.“Are we going to get toys for Christmas? Are we going to get chips for automobiles? We think those are real concerns and they need to be talked about,” he said. “What’s not being talked about is the long-term damage being done to exporters in the world market and how that’s going to be devastating to our family farms.”El Dorado is a third-generation dairy. Delayed and canceled shipments are having a devastating impact on farmers’ finances.Adam Perez for The New York TimesIncreased costs for gasoline, trucking and warehouse storage are also contributing to food price inflation.Adam Perez for The New York TimesIt has been difficult for farmers, who must negotiate contracts in advance, to pass on higher costs for fuel, fertilizer, pallets and other products.Adam Perez for The New York TimesAgricultural exporters have had to get creative to bypass congested ports and warehouses. Mr. Anderson said his company was considering rerouting some shipments more than a thousand miles to the port in Vancouver.Mike Durkin, the chief executive of Leprino Foods Company, the world’s largest maker of mozzarella cheese, told House lawmakers this month that nearly all of the company’s 2021 ocean shipments had been canceled and rebooked for a later date. More than 100 of the company’s bookings this year had been canceled and rebooked 17 times, Mr. Durkin said, equating to a five-month delay in delivering their cheese.In the interim, Leprino Foods has had to pay to hold its cheese in refrigerated containers in carrier yards, racking up an additional $25 million in fees this year. More

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    Global Shipping Delays Loom Over Retailers for the Holidays

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    The travails of a Chicago fishing company’s advent calendar highlight the supply chain hurdles for businesses trying to deliver items in time for the holidays.WASHINGTON — It was 73 days until Christmas, and the clock was ticking down for Catch Co.The Chicago-based fishing company had secured a spot to sell a new product, an advent calendar for fishing enthusiasts dubbed “12 Days of Fishmas,” in 2,650 Walmart stores nationwide. But like so many products this holiday season, the calendars were mired in a massive traffic jam in the flow of goods from Asian factories to American store shelves.With Black Friday rapidly approaching, many of the calendars were stuck in a 40-foot steel box in the yard at the Port of Long Beach, blocked by other containers stuffed with toys, furniture and car parts. Truckers had come several times to pick up the Catch Co. container but been turned away. Dozens more ships sat in the harbor, waiting their turn to dock. It was just one tiny piece in a vast maze of shipping containers that thousands of American retailers were trying desperately to reach.“There’s delays in every single piece of the supply chain,” said Tim MacGuidwin, the company’s chief operations officer. “You’re very much not in control.”Catch Co. is one of the many companies finding themselves at the mercy of global supply chain disruptions this year. Worker shortages, pandemic shutdowns, strong consumer demand and other factors have come together to fracture the global conveyor belt that shuffles consumer goods from Chinese factories, through American ports and along railways and freeways to households and stores around the United States.American shoppers are growing nervous as they realize certain toys, electronics and bicycles may not arrive in time for the holidays. Shortages of both finished products and components needed to make things like cars are feeding into rising prices, halting work at American factories and dampening economic growth.The disruptions have also become a problem for President Biden, who has been vilified on Fox News as “the Grinch who stole Christmas.”The White House’s supply chain task force has been working with private companies to try to speed the flow of goods, even considering deploying the National Guard to help drive trucks. But the president appears to have limited power to alleviate a supply chain crisis that is both global in nature and linked to much larger economic forces that are out of his control. On Sunday, Mr. Biden met with other world leaders at the Group of 20 in Rome to discuss supply chain challenges.On Oct. 13, the same day that Catch Co. was waiting for its calendars to clear the port, Mr. Biden announced that the Port of Los Angeles and companies like FedEx and Walmart would move toward around the clock operations, joining the Port of Long Beach, where one terminal had begun staying open 24 hours just weeks before.Shipping containers stacked up at the Port of Long Beach in California in October. One terminal has begun operating 24 hours. Allison Zaucha for The New York TimesMany of Catch Co.’s advent calendars were stuck in the yard at the Port of Long Beach. Allison Zaucha for The New York Times“This is a big first step in speeding up the movement of materials and goods through our supply chain,” Mr. Biden said. “But now we need the rest of the private sector chain to step up as well.”Mr. MacGuidwin praised the announcement but said it had come too late to make much difference for Catch Co., which had been working through supply chain headaches for many months.The company’s problems first began with the pandemic-related factory shutdowns in China and other countries, which led to a shortage in the graphite used to make fishing poles. A worldwide scramble for shipping containers soon followed, as Americans began spending less on movies, travel and restaurants, and more on outfitting their home offices, gyms and playrooms with products made in Asian factories.Shipping rates soared tenfold, and big companies turned to extreme measures to deliver their goods. Walmart, Costco and Target began chartering their own ships to ferry products from Asia and hired thousands of new warehouse employees and truck drivers.Smaller companies like Catch Co. were struggling to keep up. As soon as Apple launched a new iPhone, for example, the available shipping containers vanished, diverted to ship Apple’s products overseas.The timing could not have been worse for Catch Co., which was seeing demand for its poles, lures and other products surge, as fishing became an ideal pandemic hobby. The company turned briefly to air freighting products to meet demand, but at five or six times the cost of sea freight, it cut into the company’s profits.The supply chain woes became an even bigger problem for Catch Co.’s “12 Days of Fishmas” calendar, which featured the company’s plastic worms, silver fish hooks and painted lures hiding behind cardboard windows. The calendar, which retails for $24.98, was a “big deal” for the company, Mr. MacGuidwin said. It would account for more than 15 percent of the company’s holiday sales and introduce customers to its other products. But it had an expiration date: Who would buy an advent calendar after Christmas?Mr. MacGuidwin thought briefly about storing late arrivals for next year before realizing the calendar said “2021.”Catch Co. had secured a spot to sell a new product, an advent calendar dubbed “The 12 Days of Fishmas,” in 2,650 Walmart stores nationwide.Chase Castor for The New York TimesBoxes of the calendars were prepared for distribution in Kansas City.Chase Castor for The New York Times“It cannot be sold after Christmas,” he said. “It is a scrapped product after that.”Like many American companies, Catch Co. had tried to prepare for the global delays.The Chinese factories the company works with began manufacturing the calendar in April, before Walmart had even confirmed its orders. On July 10, the calendars were shipped to the port at Qingdao. But a global container shortage kept the calendars idling at the Chinese port for a month, awaiting for a box to be shipped in.On Sept. 1, nearly three weeks after setting sail across the Pacific Ocean, the vessel anchored off the coast of Southern California, alongside 119 other ships vying to unload. Two weeks later Catch Co.’s containers were off the ship, where they descended into the maze of boxes at the Port of Long Beach.Inside the BoxThe twin ports of Long Beach and Los Angeles — which together process 40 percent of the shipping containers brought into the United States — have struggled to keep up with the surge in imports for many months.Together, the Southern California ports handled 15.3 million 20-foot containers in the first nine months of the year, up about a quarter from last year. Dockworkers and truckers had worked long hours throughout the pandemic. More than 100 trains, each at least three miles long, were leaving the Los Angeles basin each day.But by this fall, the ports and warehouses of Southern California were so overstuffed that many cranes at the port had actually come to a standstill, without space to store the containers or truckers to ferry them away.On Sept. 21, the Port of Long Beach announced that it had started a trial to keep one terminal open around the clock. A few weeks later, at Mr. Biden’s urging and with the support of various unions, the Port of Los Angeles and Union Pacific’s nearby California facility joined in.So far, few truckers have arrived during the expanded hours. The ports have pointed to bottlenecks in other parts of the supply chain — including a shortage of truckers and overstuffed warehouses that can’t fit more products through their doors.“We are in a national crisis,” said Mario Cordero, the executive director of the port of Long Beach. “It’s going to be an ongoing dynamic until we have full control of the virus that’s before us.”Worker shortages at warehouses have led to delays.Chase Castor for The New York TimesTruckers, who have worked long hours throughout the pandemic, are also in short supply.Chase Castor for The New York TimesIn the past, Catch Co. would often ship products from West Coast ports by rail. But longer travel times on rail lines — as well as the high demand for containers at Chinese ports — mean shipping companies have been loath to let their containers stray too far from the ocean.So instead, the Catch Co. calendars were moved by truck to a warehouse outside the port owned by freight forwarder Flexport. There, they were placed on another truck to be shipped to Catch Co.’s Kansas City distribution center, where workers would repack the calendars for Walmart. Mr. MacGuidwin estimated that the calendars would arrive in Walmart stores by Nov. 17 — just in time for Black Friday. The calendar’s entire trip from factory to store shelves would take about 130 days this year, compared with the typical 60.Mr. MacGuidwin said he believes supply chain difficulties may ease next year, as ports, rails and trucking companies gradually work through their backlogs. Asia remains the best place to manufacture many of their goods, he said. But if shipping costs remain high and disruptions continue, they may consider sourcing more products from the United States and Latin America.Catch Co. has already started designing its calendar for next year and is still deciding whether it should say “2022.”“It’s an open question,” said Mr. MacGuidwin. More

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    Trade With China Roars Back As Americans Are Stuck At Home

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyWith Americans Stuck at Home, Trade With China Roars BackReducing trade with China was supposed to happen in 2020. But demand for Chinese goods has soared amid pandemic lockdowns.Cargo containers at the Port of Oakland in California. U.S. consumer demand is so strong that many supply chains are clogged, snarling major ports and delaying delivery of holiday gifts by several weeks.Credit…Jim Wilson/The New York TimesDec. 14, 2020阅读简体中文版閱讀繁體中文版WASHINGTON — American imports from China are surging as the year draws to a close, fueled by stay-at-home shoppers who are snapping up Chinese-made furniture and appliances, along with Barbie Dream Houses and bicycles for the holidays.The surge in imports is another byproduct of the coronavirus, with Americans channeling money they might have spent on vacations, movies and restaurant dining to household items like new lighting for home offices, workout equipment for basement gyms, and toys to keep their children entertained.That has been a boon for China, the world’s largest manufacturer of many of those goods. In November, China reported a record trade surplus of $75.43 billion, propelled by an unexpected 21.1 percent surge in exports compared with the same month last year. Leading the jump were exports to the United States, which climbed 46.1 percent to $51.98 billion, also a record.That surge has defied the expectations of American politicians of both parties, who earlier this year predicted that the pandemic, which began in China, would be a moment for reducing trade with that country and finally bringing factories back to the United States.“The global pandemic has proven once and for all that to be a strong nation, America must be a manufacturing nation,” President Trump said in May. “We’re bringing it back.”But despite Mr. Trump’s restrictions on Chinese goods, including tariffs on more than $360 billion worth of its imports, there is little sign that global supply chains are returning to the United States. Instead, the prolonged effects of the pandemic on the United States appear to have only reinforced China’s manufacturing position.China employed draconian lockdowns and extensive surveillance to shake off the effects of the pandemic earlier this year, allowing its factories to reopen at a large scale more quickly than businesses in America, where the disease is still running rampant. With many American companies, especially those based on services, crippled by coronavirus, consumers are pumping their money into online shopping for manufactured goods instead.Mary E. Lovely, a senior fellow at the Peterson Institute, said that U.S. imports from the world were on track to be lower this year than in 2019, but that China’s overall share of U.S. imports would likely increase.“Overall, China’s quick economic recovery and its dominance as a source for products that Americans have turned to during the pandemic have outweighed the dampening effect of Trump’s tariffs,” she said.Consumer demand is so strong that it has overwhelmed the capacity of the cargo industry, leading to a record spike in shipping rates. The surge in shipments is clogging many supply chains, snarling major ports and delaying delivery of holiday gifts by up to several weeks.At the Port of Los Angeles, the country’s largest processor of container cargo and the gateway for many Chinese goods, shipping containers carrying Chinese imports are stacked like Legos in piles six high. Truckers jam the parking lots, waiting hours to pick up goods, which are then dispatched across the continent.October was the busiest month in the port’s 114-year history, and traffic has remained high. On Dec. 1, dockworkers were busy unloading 19 vessels, compared with 10 to 12 on a normal day, said Gene Seroka, the port’s executive director. Twelve more ships waited in the harbor, which, on average, had been waiting about 48 hours beyond their scheduled arrival, he said.“We’re going through a time that truly is unprecedented,” Mr. Seroka said. “You’re trying to stuff 10 pounds of potatoes in a five-pound bag. This ordering and replenishment is bigger than anything we’ve seen, and now it coincides with holidays.”The pileup started earlier this year, as American retailers and manufacturers began to restock products this summer after brief lockdowns in the spring, and consumer spending began to rebound. While the pandemic has left former employees of restaurants, airlines and theme parks destitute, many members of the country’s vast remote work force have seen their bank accounts grow, and surveys show expectations for consumer spending remain strong.The initial data snapshot of November trade released earlier this month by China’s General Administration of Customs did not include detailed data by product and country. But trade data for the first 10 months of this year, compiled from United States Customs data by IHS Markit, shows that American imports of consumer electronics from China have been strong, as have imports of masks and other personal protection equipment for the pandemic.Jay Foreman, chief executive of the toy company Basic Fun!, said his company had gone from being “panicked” about the future of its business in March and April to suddenly realizing that demand was stronger than ever.“Especially as you got into June, July and August, the spigot got turned on,” he said. “Everybody realized we don’t need less stuff from Asia and China, we need more stuff.”Closed storefronts in Los Angeles. With many American businesses crippled by the coronavirus, consumers are pumping their money into online shopping instead.Credit…Philip Cheung for The New York TimesFor the toy industry, it is shaping up to be one of the biggest holiday seasons in years. But Mr. Foreman said his business would be dampened somewhat by the shipping delays. Some of the Tonka Trucks, Lite Brite sets and Care Bears that the company sells are currently stuck on container ships, or in the yard of the Port of Los Angeles.While Mr. Foreman was confident he could still sell those toys in January, he said missing the Christmas cutoff would be much more problematic for small companies and importers of seasonal products, like wreaths and Christmas lights.“Everyone has stuff sitting,” he said. “Everything is a week or two behind schedule.”Arnold Kamler, the chief executive of bicycle-maker Kent International Inc., said he was also experiencing a historic combination of strong demand and shipping delays.Business & EconomyLatest UpdatesUpdated Dec. 15, 2020, 7:19 a.m. ETSolar energy had one of its best years in the U.S. despite the pandemic.U.S. stocks set to open higher as vaccine rollout outweighs virus restrictions.Millions are about to lose jobless benefits. Expect a sharp drop in spending.Lockdowns in China earlier this year led to production delays at Kent’s Chinese factories, while American demand for bicycles began to surge, as buyers sought them for entertainment and exercise, as well as an alternative to public transportation.Pandemic-related demand for bicycles was so strong that some had begun referring to them as “the new toilet paper,” Mr. Kamler said.“I never had hoped to be compared to toilet paper, but in this case, this was a good thing,” he said.After maintaining light inventory all year, Mr. Kamler said his company had finally accumulated enough bicycles in its warehouses in California and South Carolina in the past four to six weeks to meet demand. But UPS and FedEx, which deliver the company’s bicycles directly to customers on behalf of Target, Kohl’s, Walmart and other retailers, have drastically cut the number of trucks they can dispatch to the warehouses each week.“We can’t get trucks to show up,” he said. “It’s crazy to have this demand and not be able to ship it.”That surge has created an unusual problem for China: finding enough 40-foot steel boxes into which all those goods can fit. China’s exports have been so strong this autumn that far more shipping containers are leaving Chinese ports than are coming back.American exports to China have also soared this fall, driven by strong purchases of soybeans and other agricultural goods under the U.S.-China trade agreement. But these goods — like the iron ore and coal that China also imports plentifully — travel in bulk freighters, not 40-foot containers. China imports few American manufactured goods that would travel in containers.Mr. Seroka said exports of containers stocked with American goods were down 14 percent annually so far this year at the L.A. port, creating inefficiencies and logistical issues for railroads, trucking companies and cargo lines.In the month of October, the port exported more than twice as many empty containers as those filled with American goods, Mr. Seroka said. He blamed the trend on the U.S.-China trade war, which spurred Beijing to impose more tariffs on American products, as well as the strength of the U.S. dollar, which makes American goods more expensive overseas.For both importers and logistics companies, it remains unclear how U.S. trade policy will shape their business in China in the years to come.President-elect Joseph R. Biden Jr. has not committed to lifting any of Mr. Trump’s tariffs, saying he will begin reviewing them once in office. Many of the exemptions that companies received from the tariffs are set to expire on Dec. 31, and the Trump administration has not said whether they would renew them.Chris Rogers, a global trade and logistics analyst at Panjiva, said that the trade wars and tariffs that the United States placed on China had actually reduced imports of the particular goods that were hit with tariffs — but other products that have not been taxed are booming. He said that companies could still choose to relocate their production out of China, as their businesses emerge from the pandemic.“The time to muck about with your supply chain is not during the pandemic,” Mr. Rogers said. “A lot of companies have been in cash preservation mode. Moving your supply chain is expensive and takes time. There clearly is an opportunity for companies coming out of the pandemic to say we need to build resilience, move manufacturing closer to consumers.”Despite the shipping disruptions, some companies that have kept their production in China throughout Mr. Trump’s trade wars are now feeling vindicated.Mr. Foreman said he considered moving some operations to Vietnam or India, like many toymakers did amid the trade wars last year, but “staying in China ended up to be the best move.”“China still has the best production supply chain of anybody in the world, and as it turned out, they were able to tackle the pandemic faster and more efficiently than anybody else,” he said. “China certainly has tested the boundaries and proven that they can weather the storm, as great as a storm as we’ve seen in a hundred years.”Keith Bradsher contributed reporting from Shanghai.AdvertisementContinue reading the main story More