Supply Chain Woes Continue with Record Ship Backlogs at US Ports

Joe Biden’s favorite excuses for inflation and supply chain disruption, Vladimir Putin and the COVID-19 pandemic, are being aggressively recycled day after day as distribution through American ports remains dysfunctional.

It was not long after Biden and Transportation Secretary Pete Buttigieg took over that cargo ships began to stack up at sea outside of all major U.S. ports. As a result, the cost of bringing goods to American markets from Asia has skyrocketed out of sight under Biden.

During the last full year of the Trump administration, and after the onset of COVID-19, the cost to ship a standard cargo container from Asia to California was around $3,800. By October 2021, the price shot to $17,000.

While the backlog at the ports of Los Angeles and Long Beach in California has eased to 26 ships waiting to offload from the January high of 109, total port congestion nationwide is setting new records and supply chains are as strangled as ever.

When the backlog was worst in Southern California in January and February, there were just under 150 container ships waiting outside all U.S. ports. As of last Thursday, there were 153 vessels waiting nationwide, with the majority now backed up outside East Coast and Gulf Coast ports.

The number of waiting ships has grown by 66% over just the last seven weeks.

A significant complication since early in the year is the nature of the current pileup. While the January and February traffic jams in California were centralized and easier to track, the current situation is much more widely distributed and harder to get a handle on.

The problems in Southern California are also far from over. As U.S. distribution warehouses fill up with goods as a result of slowing domestic sales of clothing, electronics, furniture, and other goods, experts now warn of a “bullwhip effect.”

That describes conditions where companies who panic-ordered goods to keep shelves stocked during the earlier part of the supply chain crisis are now having trouble storing goods that are arriving but are not selling in stores.

Sluggish consumer demand now threatens to completely swamp warehouse facilities in California’s Inland Empire region which includes 1.6 billion square feet of storage space extending from the Los Angeles port to the Nevada and Arizona borders.

The ripple effect is likely to lead to overstuffed warehouses around the nation, creating even more snarled distribution lines and potentially putting more fuel on the inflation fire. Retailers storing unpurchased goods are faced with dumping even more into storage costs or suffering losses by selling at decreased prices.