Supply chains worldwide remain fractured as cargo ship bottlenecks at certain ports delay brands from replenishing inventory. With U.S. consumer demand at record highs for everything from outdoor gear to home exercise and cooking products, shipping containers cannot be unloaded at California ports fast enough. Covid restrictions at ports that inhibit dock worker capacity have made the problem worse. As a result, more than two dozen ships are currently idling off the California coast. Some have been there for as long as two weeks. This issue, which optimistic voices in January said would subside by the end of March, has only gotten worse.
Sea Shipping Time + Cost Skyrocketing
With shipping demand high and the supply of shipping containers low, the cost of shipping products from Asia to the U.S. has skyrocketed. This means brands are spending more on shipping and getting slower delivery. Sea shipping should take about 30 days from port to port. Since January, it has taken more than 75 days in some cases.
Peter Baum’s company in New York, Baum-Essex, uses factories in China and Southeast Asia to make umbrellas for Costco, cotton bags for Walmart and ceramics for Bed Bath & Beyond. Six months ago, he was paying about $2,500 to ship a 40-foot container to California. “We just paid $6,000 to $7,000,” he said. “This is the highest freight rate that I have seen in 45 years in the business.” In early September, he waited 90 days to secure space on a ship for a container of wicker chairs and tables.
No End in Sight
It is difficult to predict how long this issue will persist. There are several factors that may contribute to a resolution:
- Factories that build shipping containers (primarily in China) are working overtime to make more
- Dockworkers on the U.S. side are fighting for vaccines, which would increase port capacity. However, only about 5% of dockworkers have been immunized so far
- The pandemic-fueled consumer frenzy may also begin to slow as the world takes its first steps on the road to normalcy
Some sources predict these bottlenecks to persist through the summer. Others say we should expect shipping delays through the end of 2021.
Temporary Solution: Hybrid Shipping Tactics
While air freight is typically about triple the cost of sea shipping, your product will be delivered in 3 to 5 days. Canyon Bicycles USA Transportation Manager Kim Peterson said the company is shipping most of its inventory via water, but added that its most popular bikes are being shipped by air to meet a demand surge. Many brands are biting the bullet and paying extra for this hybrid shipping model. However, with air travel severely constrained, so are available cargo slots.
As a global supply chain company, Blacksmith International has seen the effects of these port delays firsthand. Our team on the ground in China has been able to pull strings for many of our clients, placing them first in line for a container. However, for clients that need their product fast, we are advising that they use air freight.
Blacksmith will continue to update our clients on sea shipping delays and do everything we can to ensure on-time delivery. If you have any questions, please contact us.
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