NATIONAL NEWS

$24 billion in goods is floating outside California’s biggest ports

Oct 25, 2021, 11:30 AM | Updated: 11:31 am
Cargo containers sit stacked on ships at the Port of Los Angeles, the nation’s busiest container ...
Cargo containers sit stacked on ships at the Port of Los Angeles, the nation’s busiest container port, on October 15, 2021 in San Pedro, California. As surging inflation and supply chain disruptions are disrupting global economic recovery, the Washington-based IMF has projected that global gross domestic product will grow by 5.9% this year — a 0.1 percentage point lower than its July estimate. The Port of Los Angeles is transitioning to 24/7 operations amid efforts to ease supply backlogs. (Photo by Mario Tama/Getty Images)
(Photo by Mario Tama/Getty Images)

(CNN) — Extreme port congestion has become a major nuisance that just won’t go away this year. Unfortunately, it could be one of the biggest problems of 2022, too.

Backlogs and elevated shipping costs are likely to persist “at least” through the middle of next year, Goldman Sachs warned clients in a note Monday.

“No immediate solution for the underlying supply-demand imbalances at U.S. ports is available,” the bank’s economists concluded in the research report.

That’s bad news for the economy and for everyday Americans, because supply chain bottlenecks are raising costs, delaying shipments and leaving shoppers with fewer options.

Consumer prices are rising at the fastest 12-month pace since 2008. The amount of products that were out of stock online is up by 172% when compared with January 2020, according to Adobe Analytics.

The most glaring evidence of the supply-chain crisis: the dozens of container ships floating outside the Ports of Los Angeles and Long Beach just waiting to get offloaded. Goldman Sachs estimates there is a staggering $24 billion in goods sitting outside those two ports alone.

But once ships are able to dock and unload, shipping containers have still dwelled at the ports for days.

In September, about one-third of shipping containers at the ports of Los Angeles and Long Beach sat for more than five days after making it off the ship, Goldman Sachs found, compared with low-single digit percentages before the pandemic.

Earlier this month, the White House announced commitments from the Port of Los Angeles, unions and several major companies to move to 24/7 operations.

Goldman Sachs said the move “may help at the margin,” but also requires cooperation from other ports, truck drivers, rail operators and warehouses. And the biggest issue remains a shortage of workers, including truck drivers.

This is a broader problem beyond the California ports. Nationally, the time it takes loaded ships to make it through U.S. ports has tripled from historical norms, Goldman Sachs found.

That’s why Goldman Sachs expects congestion at ports to ease just “slightly” in the coming months as the United States moves beyond the peak for shipping demand related to the holiday season.

As long as there are no “further shocks” to supply chains (such as Covid outbreaks and lockdowns), congestion should “ease more meaningfully” after the Chinese New Year in February, Goldman Sachs said.

“However, congestion will likely persist to some extent through at least the middle of next year, and our analysts expect that freight rates will likely remain meaningfully above pre-pandemic levels for at least the next year,” the report concluded.

Moody’s Analytics similarly warned last week that supply chain stress is intensifying and showing “no sign of subsiding just yet.”

Earlier this month, Transportation Secretary Pete Buttigieg told CNN that U.S. supply chain problems will “certainly” continue into 2022.


The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

Top Stories

National News

Law enforcement officers aim their weapons at a home during a standoff in Grants Pass, Ore., on Tue...
Associated Press

Oregon kidnapping suspect dies of self-inflicted gunshot

The suspect in a violent kidnapping in Oregon has died of a self-inflicted gunshot wound.
18 hours ago
Federal Reserve Board Chairman Jerome Powell speaks during a news conference after a Federal Open M...
Christopher Rugaber, AP Economics Writer

Fed lifts rate by quarter-point and signals more hikes ahead

The Federal Reserve extended its fight against high inflation Wednesday by raising its key interest rate by a quarter-point, its eighth hike since March.
18 hours ago
Six-year-old Mason Stonehouse was playing on his dad’s phone before bedtime and spent about $1,00...
CNN

Michigan six-year-old orders $1,000 worth of food on Grubhub

A six-year-old as playing on his dad's phone before bedtime and spent about $1,000 on Grubhub orders.
18 hours ago
FILE - U.S. Secret Service agents are seen in front of Joe Biden's Rehoboth Beach, Del., home on Ja...
Eric Tucker, Colleen Long and Zeke Miller, Associated Press

Biden lawyer: FBI finds no classified docs at beach house

The Federal Bureau of Investigation searched President Joe Biden's vacation home in Rehoboth Beach, Delaware, on Wednesday without finding any classified documents, the president's personal attorney said.
18 hours ago
Soundgarden performs on stage for Guitar Hero game...
Mark Kennedy, Associated Press

Missy, Willie and George Michael among Rock Hall nominees

Missy Elliott, Willie Nelson, Kate Bush, Iron Maiden, Cyndi Lauper, Soundgarden, Sheryl Crow and the late George Michael are nominees for 2023 induction into the Rock & Roll Hall of Fame, a list that includes a mix of country, soul, hip-hop, metal, pop, rap-rock and grunge.
18 hours ago
Mourners sit next to a candle display during a vigil for Tyre Nichols at Regency Community Skatepar...
Aaron Morrison and Travis Loller, Associated Press

‘We’re all Tyre’: Family prepares to lay Nichols to rest

The family of Tyre Nichols plans to lay him to rest Wednesday, three weeks after he died following a brutal beating by Memphis police that was captured on disturbing video that prompted nationwide protests and renewed calls for police reform.
18 hours ago

Sponsored Articles

vintage photo of lighting showroom featuring chandeliers, lamps, wall lights and mirrors...
Lighting Design

History of Lighting Design | Over 25 Years of Providing Utah With the Latest Trends and Styles

Read about the history of Lighting Design, a family-owned and operated business that paved the way for the lighting industry in Utah.
Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
$24 billion in goods is floating outside California’s biggest ports