Bottleneck in US ports means longer delays, higher shipping costs, fees

Shortage of truckers, warehouse space and equipment causes backup in ports, may delay items to shelves.
Port with containers
Photo credit Getty Images

(KMOX) - Cargo ships are backed up in ports as companies work to find resources to unload them. John Ogilvy is with the St. Louis OEC Group, a freight forwarding company, and says there’s a shortage of truckers, equipment and warehouse space.

“It’s really reached the point of an absolute bottleneck in Los Angeles-Long Beach to get truckers in and get the containers out of the ports," he says.

With a kink in the supply chain, business owners face higher shipping cost and fees. As for consumers, Ogilvy said, there may be some holes in shelves, but it’s not because there isn’t enough of the item, but more likely an issue of getting the item into the store.

The bottleneck in the ports is a multi-faceted issue. Ogilvy said when China opened back up there has been a huge push to get items in so companies can restock. However, importers are faced with delays unloading the ships due to shortage of chassis, 40-foot high cube containers and truckers. Ogilvy said the cycle times for chassis are running around three times longer than usual.

“For the importers that are bringing these goods in, the quicker they can receive the goods and empty the containers and allow the rest of the cycle to continue the better," Ogilvy said. "That’s probably the key that most folks in the logistics industry are pushing for with the importers.”

Another issue importers are having is where to put the imports. Warehouse space is in huge demand with the ever-growing e-commerce industry. According to the US Census Bureau e-commence has increased around 37% compared to the third quarter of 2019. Ogilvy said, since warehouses are full, companies are leaving product in the cube containers longer which is adding to the delays.

As for when the supply chain kinks will get worked out? Ogilivy said things may not slow down until the Chinese New Year. When the Chinese take some respite and every factory is shut down in the country for at least a week.

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