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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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    Program to Lend Billions to Aid California’s Supply-Chain Infrastructure

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    The Transportation Department and the state are teaming up on the program, which aims to prevent a repeat of the supply-chain crisis by bolstering ports and other sources of bottlenecks.WASHINGTON — The Transportation Department will team up with California to provide billions in loans to strengthen the state’s overwhelmed ports and supply-chain infrastructure, in an effort to prevent a repeat of the bottlenecks that have crippled the flow of goods into and out of the United States, officials announced on Thursday.Most of the projects will probably take years to fund and complete, a department spokesman said, so the initiative will offer little relief for the supply-chain crisis now gripping the globe. But with potentially more than $5 billion in loan money on offer, officials say the investment is a necessary step to bolster the state’s aging infrastructure.The loans could be used to upgrade ports, expand capacity for freight rail, increase warehouse storage and improve highways to reduce truck travel times. The Transportation Department will provide some of the loan money through its own programs, while also working with the California State Transportation Agency to identify other financing opportunities.Backlogs of ships at ports and shortages of shipping containers, truck drivers and warehouse workers have aggravated the delivery delays and rising prices that began when coronavirus outbreaks shut down factories around the world even as demand for goods spiked. The Biden administration moved this month to nearly double the hours that the Port of Los Angeles is open, shifting to a 24/7 operation.“Our supply chains are being put to the test, with unprecedented consumer demand and pandemic-driven disruptions combining with the results of decades-long underinvestment in our infrastructure,” Pete Buttigieg, the transportation secretary, said in a statement. “Today’s announcement marks an innovative partnership with California that will help modernize our infrastructure, confront climate change, speed the movement of goods and grow our economy.”The announcement comes as President Biden and lawmakers try to push through Congress their own major infrastructure plan, which includes money for ports and other transportation initiatives. Progressive lawmakers in the House have resisted throwing their support behind the bipartisan infrastructure bill as leverage while negotiations continue over a separate $1.85 trillion economic and environmental bill.David S. Kim, the secretary of the California State Transportation Agency, said it was the first time California had worked with the federal government to issue loans for infrastructure projects on such a broad scale.“Our supply-chain infrastructure is outdated,” Mr. Kim said. “Now’s the time to modernize it and prepare our system for what will be huge growth and huge demand for years to come.”The partnership comes after Gov. Gavin Newsom of California signed an executive order last week directing state agencies to identify longer-term solutions to alleviate congestion at California ports, which he said were “key” to the country’s supply chain. Mr. Newsom said the new agreement would help accelerate upgrades to the state’s infrastructure system.“This innovative federal-state partnership will help us fast-track those projects that will make our ports and infrastructure even more efficient,” Mr. Newsom said in a statement.California’s budget this year includes $250 million for ports, $280 million for infrastructure projects at and around the Port of Oakland, and $1.3 billion over three years for zero-emission trucks, transit buses and school buses, including the deployment of more than 1,000 zero-emission port drayage trucks. More

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    Biden to Announce Expansion of Port of Los Angeles's Hours

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    The expansion of the Port of Los Angeles’s hours comes as the administration has struggled to untangle kinks in global supply chains and curb the resulting inflation.WASHINGTON — President Biden will announce on Wednesday that the Port of Los Angeles will begin operating around the clock as his administration struggles to relieve growing backlogs in the global supply chains that deliver critical goods to the United States.Product shortages have frustrated American consumers and businesses and contributed to rising prices that are hurting the president politically. And the problems appear poised to worsen, enduring into late next year or beyond and disrupting shipments of necessities like medications, as well as holiday purchases.Mr. Biden is set to give a speech on Wednesday addressing the problems in ports, factories and shipping lanes that have helped produce shortages, long delivery times and rapid price increases for food, televisions, automobiles and much more. The resulting inflation has chilled consumer confidence and weighed on Mr. Biden’s approval ratings. The Labor Department is set to release a new reading of monthly inflation on Wednesday morning.Administration officials say that they have brokered a deal to move the Port of Los Angeles toward 24/7 operations, joining Long Beach, which is already operating around the clock, and that they are encouraging states to accelerate the licensing of more truck drivers. UPS, Walmart and FedEx will also announce they are moving to work more off-peak hours.Mr. Biden’s team, including a supply chain task force he established earlier this year, is working to make tangible progress toward unblocking the flow of goods and helping the retail industry return to a prepandemic normal. On Wednesday, the White House will host leaders from the Port of Los Angeles, the Port of Long Beach, and the International Longshore and Warehouse Union to discuss the difficulties at ports, as well as hold a round table with executives from Walmart, UPS and Home Depot.But it is unclear how much the White House’s efforts can realistically help. The blockages stretch up and down supply chains, from foreign harbors to American rail yards and warehouses. Companies are exacerbating the situation by rushing to obtain products and bidding up their own prices. Analysts say some of these issues may last into late next year or even 2023.Administration officials acknowledged on Tuesday in a call with reporters that the $1.9 trillion economic aid package Mr. Biden signed into law in March had contributed to supply chain issues by boosting demand for goods, but said the law was the reason the U.S. recovery has outpaced those of other nations this year.Consumer demand for exercise bikes, laptops, toys, patio furniture and other goods is booming, fueled by big savings amassed over the course of the pandemic.Imports for the fourth quarter are on pace to be 4.7 percent higher than in the same period last year, which was also a record-breaking holiday season, according to Panjiva, the supply chain research unit of S&P Global Market Intelligence.Meanwhile, the pandemic has shut down factories and slowed production around the world. Port closures, shortages of shipping containers and truck drivers, and pileups in rail and ship yards have led to long transit times and unpredictable deliveries for a wide range of products — problems that have only worsened as the holiday season approaches.Home Depot, Costco and Walmart have taken to chartering their own ships to move products across the Pacific Ocean. On Tuesday, 27 container ships were anchored in the Port of Los Angeles waiting to unload their containers, and the average anchorage time had stretched to more than 11 days.Jennifer McKeown, the head of the Global Economics Service at Capital Economics, said that worsening supplier delivery times and conditions at ports suggested that product shortages would persist into mid- to late next year.“Unfortunately, it does look like things are likely to get worse before they get better,” she said.Ms. McKeown said governments around the world could help to smooth some shortages and dampen some price increases, for example by encouraging workers to move into industries with labor shortages, like trucking.President Biden is set to give a speech on Wednesday addressing the problems in ports, factories and shipping lanes that have helped create shortages.Stefani Reynolds for The New York Times“But to some extent, they need to let markets do their work,” she said.Phil Levy, the chief economist at the logistics firm Flexport and a former official in the George W. Bush administration, said a Transportation Department official gathering information on what the administration could do to address the supply chain shortages had contacted his company. Flexport offered the administration suggestions on changing certain regulations and procedures to ease the blockages, but warned that the problem was a series of choke points “stacked one on top of the other.”“Are there things that can be done at the margin? Yes, and the administration has at least been asking about this,” Mr. Levy said. However, he cautioned, “from the whole big picture, the supply capacity is really hard to change in a noteworthy way.”The shortages have come as a shock for many American shoppers, who are used to buying a wide range of global goods with a single click, and seeing that same product on their doorstep within hours or days.The political risk for the administration is that shortfalls, mostly a nuisance so far, turn into something more existential. Diapers are already in short supply. As aluminum shortages develop, packaging pharmaceuticals could become a problem, said Robert B. Handfield, a professor of supply chain management at North Carolina State University.And even if critical shortages can be averted, slow deliveries could make for slim pickings this Christmas and Hanukkah.“I think Johnny is going to get a back-order slip in his stocking this year,” Dr. Handfield said. Discontent is only fueled by the higher prices the shortages are causing. Consumer price inflation probably climbed by 5.3 percent in the year through September, data from the Bureau of Labor Statistics is expected to show on Wednesday. Before the pandemic, that inflation gauge had been oscillating around 2 percent.Officials at the White House and the Federal Reserve, which has primary responsibility for price stability, have repeatedly said that they expect the rapid price increases to fade. They often point out that much of the surge has been spurred by a jump in car prices, caused by a lack of computer chips that delayed vehicle production.But with supply chains in disarray, it is possible that some new one-off could materialize. Companies that had been trying to avoid passing on higher costs to customers may find that they need to as higher costs become longer lived.Others have been raising prices already. Tesla, for instance, had been hoping to reduce the cost of its electric vehicles and has struggled to do that amid the bottlenecks.“We are seeing significant cost pressure in our supply chain,” Elon Musk, the company’s chief executive, said during an annual shareholder meeting Oct. 7. “So we’ve had to increase vehicle prices, at least temporarily, but we do hope to actually reduce the prices over time and make them more affordable.”For policymakers at the White House and the Fed, the concern is that today’s climbing prices could prompt consumers to expect rapid inflation to last. If people believe that their lifestyles will cost more, they may demand higher wages — and as employers lift pay, they may charge more to cover the cost.What happens next could hinge on when — and how — supply chain disruptions are resolved. If demand slumps as households spend away government stimulus checks and other savings they stockpiled during the pandemic downturn, that could leave purveyors of couches and lawn furniture with fewer production backlogs and less pricing power down the road.If buying stays strong, and shipping remains problematic, inflation could become more entrenched.Some of the factors leading to supply chain disruptions are temporary, including shutdowns in Asian factories and severe weather that has led to energy shortages. Consumer habits, including spending on travel and entertainment, are expected to slowly return to normal as the pandemic subsides.But most companies have enormous backlogs of orders to work through. And company inventories, which provide a kind of insulation from future shocks to the supply chain, are extremely low.To get their own orders fulfilled, companies have placed bigger orders and offered to pay higher prices. The prospect of inflation has further encouraged companies to lock in large purchases of products or machinery in advance.“The customers that are willing to pay the most are most likely to get those orders filled,” said Eric Oak, an analyst at Panjiva. “It’s a vicious cycle.”Emily Cochrane More

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    Hurricane Ida could make the supply chain disaster even worse.

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    In normal times, the devastation of a massive hurricane like Ida tends to be followed by an aggressive rebuilding effort, as carpenters, roofers and other skilled workers descend on affected communities to repair the damage.These are not normal times.With the global supply chain besieged by trouble — extreme shipping delays, persistent product shortages and soaring costs — construction teams are likely to struggle to secure needed goods. At the same time, the hurricane’s damage to critical industries in the Gulf Coast area and the urgent need to rebuild are expected to cascade through the country’s already strained shipping infrastructure.“The supply was already terrible,” said Eric Byer, the president of the National Association of Chemical Distributors, a trade association representing 400 companies that make and sell raw materials used in a vast array of industries, including construction and pharmaceuticals. “Now, it’s going to be worse.”For months, a surge of trade from Asia to the United States has exhausted the supply of shipping containers, forcing buyers to pay 10 times the usual rate on popular routes like Shanghai to Los Angeles.As dockworkers have contracted Covid or have landed in quarantine, loading and unloading at ports has been constrained. The pandemic has sidelined truck drivers, limiting the availability of vehicles that can carry products from ports to warehouses to customers.Hurricane Ida will almost certainly make this situation worse, as available trucks are diverted en masse toward affected communities to deliver relief supplies. No one questions the merits of this course, but it will leave even fewer trucks available to carry goods everywhere else, intensifying already-profound shortages.“The domestic trucking situation has been bad for some time, and the hurricane will add to that,” said Megan Gluth-Bohan, the chief executive of TRInternational, an importer and distributor of chemicals just outside Seattle. “You’re going to see more logjams at the ports.”Her company relies on a supplier in Taiwan for hydrocarbon resins, selling them to American manufacturers that make paints, varnishes and other coatings. She brings in chemicals from Thailand that are included in industrial cleaning products and imports so-called glycols that are used in food products, makeup, and industrial coatings.“These are the raw materials that make everything,” Ms. Gluth-Bohan said.Ms. Gluth-Bohan was still assessing the impact of Ida on her industry, but it seemed obvious that the rebuilding effort would face challenges as the availability needed supplies becomes even tighter.“It’s going to have a significant impact,” she said. “Companies that make coatings, paint, shingles or treated lumber — a lot of these companies are going to have to slow down.”Part of the impact is a result of where the storm landed. The Gulf of Mexico is home to refineries and plants that make all manner of industrial chemicals — a fact brought home last winter, when an intense freeze knocked factories out of commission, yielding product shortages that still endure.The plastics industry was girding for another jump in prices that were already record high.The Royale Group, which manufactures and distributes chemicals from its base near Wilmington, Del., buys only a small percentage of its products from plants on the Gulf of Mexico. But that is no comfort, said the company’s chief executive, John Logue. The Great Supply Disruption has illustrated time and again that shortages of a single ingredient can be enough to halt production of many items.The global auto industry has been severely constrained by a persistent shortage of computer chips. Similarly, Mr. Logue’s company, which relies heavily on suppliers in China and India, has for weeks been unable to complete an order for a pharmaceutical company because it is waiting for one raw material.“Any hiccup in the supply chain right now just adds fuel to the disaster,” Mr. Logue said. “We are not manufacturing what we want to manufacture. We are manufacturing what we are able to manufacture.” More