Backlog of container ships leading to delays, shortages and inflation
Oct 29, 2021, 8:28 AM | Updated: 9:10 am
SALT LAKE CITY — A backlog of ships and containers off the west coast could hit the upcoming holidays, leading to shipping delays, product shortages and inflation.
“I don’t think we’ve had anything impact our transportation and factories and inventories like COVID since World War II,” said Scott Webb, associate professor of supply chain management at Brigham Young University.
Webb has been watching the scene of stagnant ships and containers at the port in Long Beach closely. He says a ship’s journey from China to California used to take about three weeks. Today ships have been sitting around for six months. In other words, he says, Christmas is stuck at the port.
And the wait isn’t the only problem. Costs have also gone up. He says a container ship carries the equivalent of 7,000 semi-truck trailers. And what used to cost $2,000 to ship a single container before COVID, now costs $12,000 to ship.
A shortage of truck drivers is also contributing to the delay.
“You just start thinking of the sheer scale of what you would need to do to make all this work. We would need an army of truck drivers,” he said. “That’s where I see lots of shortages happening in the near future. Probably some inflation kicking in with it.”
Webb expects grocery stores will do OK since the U.S. grows much of its own food and, “retailers are, generally speaking, pretty good about not trying to jack prices up.”
Thanksgiving may cost a bit more. And he says you can still expect some impact on items in high demand heading into the holiday season. Some Christmas gifts may be more difficult to find also.
“It’s not inconceivable to think in the future we might have to start rationing things,” he said. “Every year there’s the really cool toy everyone wants and it’s hard to find anyway. I think it’s going to be almost nonexistent.”
Webb points to a recent report in the industry that showed the supply chain is “on the verge of collapse. So, it’s pretty bad.”
“We’re in a really, really interesting — that’s the wrong word — it’s kind of a scary situation right now.”
But he says he doesn’t think that will happen. He said many in the industry believe it will probably take a year for the supply chain to return to normal.