Backlog at California’s Ports and Its Impact

The shipping industry is going through one of its most uncertain slowdowns in 30 years due to economic disruptions such as labor shortages. U.S. ports face extensive backlogs of cargo ships, particularly in Southern California. The backlog is so intense that many ships must float 20 miles away from the shore to avoid other shipping traffic.

The Port of Los Angeles has dealt with nearly 500,000 shipping containers, many of which are larger than the average containers from 20 years ago. These 20-foot containers store an estimated 12 million metric tons of goods.

By late 2021 the nation’s largest ports have been operating at 60-70 percent capacity. Shipping firms are finding it difficult to meet the increasing demands of delivery schedules with a reduced workforce.

Addressing Labor Shortages

Giving existing logistics employees longer working hours may help mitigate the strain on supply chains, but it won’t be sufficient to resolve the immediate problems. Extending hours means pushing work into the evening, which is not convenient for truck drivers or warehouse workers.

Labor shortages are based on a mix of issues, many of which stem from the pandemic. A record number of employees have quit their jobs after nearly two years of rethinking their careers. Suppliers and logistics firms have not been able to fill positions fast enough to meet delivery demands. The pandemic itself has triggered higher demand for shipping due to lockdown situations.

The combination of equipment and operator shortages is making shipping delays worse. The strain can be felt throughout the supply chain up to the end consumers, who have to pay higher prices for slower deliveries.

Resolving Storage Issues

Many West Coast warehouses have limited space available for storage and often operate at full capacity. An affordable solution when extra space is needed is to rent a 20-foot shipping container. According to the Wall Street Journal, the overall Western U.S. shipping industry is near full capacity with a 3.6 percent vacancy rate.

About a third of containers stay at ports for up to five days, which is three times longer than normal. President Biden has ordered ports to stay open 24 hours, but it has had limited effects on reducing the bottlenecks.

Rising Prices and Growing Issues

In November 2021, the U.S. government reported consumer prices had skyrocketed 6 percent over a year. It marked the fastest price surge in three decades. Many logistics experts believe that supply chain bottlenecks will continue through 2022. Some experts warn this crisis could last through 2023 as well.

Supply chains are going through a very challenging period that may take time to resolve. In the meantime, if you need a reliable delivery service in Southern California, turn to the leaders in your region. MDS is your custom courier and mail delivery service expert for all of your mail and delivery needs in Orange County. Contact us for more information today.

New Star Wars Movie Impacts Long Beach and Los Angeles Port Activity

THE STAR WARS FRANCHISE EFFECTS LOS ANGELES AND LONG BEACH PORT ACTIVITY!

The much anticipated seventh Star Wars movie “The Force Awakens” is here! Directed by J.J Abrams, the film opens on December 18th, 2015. Although it’s been nearly 40 years since the last Star Wars installment, the iconic movie franchise has maintained its loyal fan base. The impending movie release has generated a lot of buzz recently, as light saber events and watch parties are set all over the country for the big day.

With all the excitement, comes a financial impact. The movie franchise offers a variety of merchandise to be sold. From apparel such as t-shirts and death star ankle boot to toys like light sabers and collectable figurines, the distribution of Star Wars related merchandise is at an all time high. But this Star Wars hype has an unexpected business impact.

There are significant amounts of Star Wars products manufactured overseas. So the recent flux of merchandise has been imported. Such imports have significantly increased port activity in the US, specifically in Los Angeles which receives most toys made overseas.

The Port of Los Angeles is expected to get an increase of toys this season due to the Star Wars franchise. A report from ISH Inc. projects an expected activity growth increase of 10.9 % from data collected by JOC Group Inc. This increase is largely the result of Star Wars toys.

The Port of Los Angeles receives the majority of its imports from China, which consists of 84% of the total imports. Vietnam has increased its exports to Los Angeles and has risen 28% in the last year.

Have last minute holiday gifts to ship? Contact MDS, Inc, your mail delivery & custom courier service experts, in Orange County for all your mail and delivery needs!

Ports of Los Angeles & Long Beach: Growth Trends & Economic Impact

You might be surprised how much the Ports of Los Angeles and Long Beach are growing the So-Cal economy.

 

Did you know that two very local ports – Los Angeles and Long Beach – handle over 40 percent of container trade in the entire United States? California bridges our nation with Asia (including economic powerhouse China) so it’s not particularly surprising that we see a lot of business through the Golden State. What is surprising is that these two ports alone handled $409 billion in imported and exported cargo last year.

Port activity doesn’t show any signs of slowing down. Imports to these ports have been hitting record highs recently, driven by U.S. consumer demand. In July and August, both the Port of Los Angeles and Port of Long Beach hit cargo volumes we hadn’t seen since pre-Recession 2008. Last quarter, we saw a 5.7 percent growth of volumes through the Port of LA. Recent figures point that these growth trends will only continue.

Business at these ports is great for Southern Californians. Millions of jobs have been created because of the traffic through the Ports of Long Beach and Los Angeles. In Long Beach, the Port creates one in eight jobs in the city. It’s also responsible for 1.4 million jobs throughout the country because of its trade. The Port of Los Angeles has created 148,000 jobs in Los Angeles and 1.7 million jobs throughout the United States. In short, these ports both play a significant role in our local economy.

If you’d like to learn more about local transportation and how it affects our CA economy, contact MDS Inc. As mail delivery & custom courier service experts, we’re committed to staying informed about the latest growth trends in transportation so we can stay ahead of the curve and best serve you. For all of your delivery and courier needs, call us today!

img

Newsletter

Testimonials

img