U.S. Shipping Crisis Crashes Holiday Season

Shipping+boats+in+U.S+ports+are+anchored+at+sea%2C+unable+to+be+serviced+for+return.+A+multitude+of+factors%2C+from+labor+shortages+to+increases+in+demand%2C+has+caused+massive+pile+ups+of+shipping+boats%2C+reaching+every+level+of+the+U.S+supply+chain.

Issac Coltman

Shipping boats in U.S ports are anchored at sea, unable to be serviced for return. A multitude of factors, from labor shortages to increases in demand, has caused massive pile ups of shipping boats, reaching every level of the U.S supply chain.

By Issac Coltman, Lincoln High School - OR

The holiday season is here, just in time for Americans to spend enormous amounts of money on Playstations, clothes and televisions. In 2019, the amount spent on holiday shopping eclipsed even the U.S military budget, reaching an unbelievable 700 billion dollars.

Throwing a wrench in those plans is an escalating, unprecedented U.S. shipping crisis. From factories in Asia to store shelves, every part of the U.S. supply chain is being affected. Long Beach-L.A. and other ports are experiencing massive pile ups, at one point having 40 miles of 88 ships unable to dock. 

For reference, a single freight ship can hold 11,500 forty foot containers, and, as Yahoo Business calculates, that’s enough containers to hold 1.4 million dishwashers (or about 16% of all dishwashers shipped per year). Right now, there’s 66 of those ships in Long-Beach-L.A alone.

The question is simple. Why did this happen?

As Lincoln business teacher Ronald Waugh explains, it all starts with how our shipping works.

“For decades, companies have been keeping their inventory levels very low. It’s called ‘just-in-time’ inventory. Reducing inventory saves money on warehousing, which companies can invest,” Waugh said.

The U.S. relies on this practice, so items on store shelves arrive in the country just days before they’re purchased.

So, when the pandemic started, it created the perfect scene for this crisis.

“Because of illness, countries went into lockdown and workers got sick. Factories shut down or had reduced production. Then shipping companies rolled back their schedules— expecting a decrease in demand,” he said.

But the expected decrease in demand never arrived.

“People started working from home, and got stimulus payments, so suddenly we had more money, and we were home—not going out. We started spending more… Things started to go upstream, and now so many ships are coming to the U.S. they can’t unload; ships are coming in and containers are already there, taking up space,” he said.

According to the Freightos Baltic Index (FBX), the average price of shipping has quadrupled in the past year. Due to a shortage of truck, railroad and dock workers, as GCaptain reports, there are now 16 containers standing idle for every available truck in Long Beach. 

When it comes to causes, sophomore Stephen Gagnier thinks this crisis stems from the underlying consumerist culture of America.

“We should have paid attention to this awhile ago. People consume items without really thinking about it. The more people buy, the more they feel like they have something to do, and it’s not good,” Gagnier said.

There’s hope that shipping problems in the U.S. will subside, and as Waugh explains, some simple measures can be taken to help these problems.

“[In Long Beach], a reporter found a zoning regulation that limited containers to be stored two high. When they found this out, the reporter tweeted it— and within two hours the zoning regulation had changed to be four containers high. That immediately doubled the storage capacity of those yards,” he said.

As dock-workers, truck-drivers and retailers continue to work hard, we will see this crisis slowly begin to subside; but the state of the holiday season— and the buying trends of consumers— remains in question.

This story was originally published on The Cardinal Times on November 29, 2021.