Supply chain reliability – Since November 2020, congestion at the Ports of Los Angeles and Long Beach has been creating a bottleneck which is having on effect on cargo owners and ultimately retail prices. High import levels are driving the congestion and an easing of volumes is not in sight. The National Retail Federation is projecting an increase in retail sales this year of between 6.5% and 8.2% and has predicted record volumes at least into 2022.
Unfortunately this congestion has spread from Southern California up the coast and onto the East Coast and to inland hubs such as Chicago and Memphis. The entire US container shipping network has been affected just as the economy continues to heat up and retailers have been anticipating back-to-school shopping, Halloween and the winter holiday season. Supply chain reliability is no longer assumed in today’s environment.
Why the Congestion?
There is a long blame list for the port delays in Southern California starting with Covid-19 reduced work crew productivity; ships piling up in San Pedro Bay; overflowing container yards; shortages of boxes and chassis, and a now a shortage of railcars.
The railways are blaming the railcar shortage on the high volume of cargo strain