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Based on the most active thread here, I think this article has accomplished its goal, which is to lead (smart) casual readers to believe that the congestion and associated delay are due to increased exports to the US because of the predicted increase in consumer spending. (This is a trade publication that wants advertisers for people who want to buy more freight! Demand is a great reason why!) In reality, I'm almost 100% sure that the real reason for the congestion is referred to in the one sentence from Hapag-Lloyd - which is that port workers in SoCal have been decimated by COVID. The massive spike of COVID cases in Los Angeles County that started ~11/1 and really hit hard by 12/1 (discussed many places), which has disproportionally impacted both POCs and workers in heavy-labor industries, is certainly impacting the supply of workers to offload and process. I've heard this anecdotally from two friends who run freight forwarding companies in SoCal. It's also worth noting that the logic around shipping ahead to predict a generic increase in consumer spending doesn't play out. Planning for a single date (Halloween costumes, Christmas toys) - of course, ship it as close to the deadline as you can, but don't f'ing miss it. But for a rolling, undated, potential increase in spending? In a world of relatively fast manufacturing, ~4 weeks to get your items from the Shenzhen terminal to offloaded in Long Beach, and with storage costs being exponentially higher in the US than in China - it makes zero sense for what will be a diffuse wave (optimistically!) of consumer spending. No major manufacturer/retailer produces that far ahead of unproven demand, and no smaller one can afford to do it (and it's not like you can get money for this). This is a staffing shortage, pure and simple. It's not going to get better for a while. [Added 30min later] BTW, I didn't see this before I posted, but Ryan Petersen (CEO of Flexport) shared on Twitter today "Yesterday there were 800 COVID-19 cases amongst the 9,000 ILWU employees who run the port of LA / Long Beach. And there was already a backlog of 29 container ships waiting to unload in the port." https://twitter.com/typesfast/status/1351942493907034112 |
Can we please stop using „exponential“ like this? Maybe you meant orders of magnitude?