The waiting game is getting longer for container ships entering the largest U.S. ports for transpacific shipping, that being ports of Los Angeles and Long Beach, California.
Ships at anchor and waiting time to berth have jumped sharply across the twin ports. Bloomberg cites new data from both ports, compiled by Wabtec's Port Optimizer supply chain platform, that shows 55 vessels were moored or drifting offshore waiting to offload cargo as of Friday. Just two weeks ago, readers may recall that congestion outside the busiest U.S. gateway for trade with Asia was 40. The average wait jumped almost one day, from 7.6 in late August to 8.5.
Port congestion is getting worse as peak shipping season is underway. This week, Los Angeles and Long Beach officials were forced to shift vessels to an overflow space because the main waiting areas were at full capacity. There are 17 container ships in overflow zones.
The massive port backlog means 375,000 20-foot containers are waiting offshore and can only mean more supply chain disruptions for U.S. importers.
Recent Covid outbreaks have exacerbated delays along key transpacific shipping lanes at Asian ports, such as the recent shutdown of the Ningbo Meishan Container Terminal (the third-largest container port in the world after Shanghai and Singapore), also referred to as the Meishan Terminal, in China, due to positive Covid test results. The terminal has since reopened but added to further congestion in the transpacific shipping network.
The core problem with congested waterways, high wait times, and skyrocketing transportation costs are that it fuels an inflation surge that pushes producer prices and consumer prices higher, discrediting the Federal Reserve's "transitory" inflation narrative.
Fed members don't seem too worried about raging inflation as it eats away wage gains of the average joe and jane. These officials are too busy day trading stocks than worrying about what's happening on main street.