Triple threat of factors driving shipping delays - Albuquerque Journal

Triple threat of factors driving shipping delays

Have you been notified that the delivery of a product you ordered is being delayed? Or have you gone to a store and seen a “temporarily out of stock” sign on a shelf?

These inventory issues are most likely being caused by the delay in cargo arriving from Asia to West Coast ports. On top of the delays, freight costs have skyrocketed. According to the Maritime Executive Magazine, “With global demand remaining high for the container carriers, long-term contracted ocean freight rates stand at a remarkable 85.5% higher than a year ago.”

The two largest ports on the U.S. West Coast, Long Beach and Los Angeles, are severely backed up and the problem only seems to be getting worse. Workers are desperately laboring hard to unload containers off ships, as more and more vessels arrive. Recently, at the two ports, all dock terminals were busy unloading container ships, while more than 70 other ships floated along the coast waiting for their turn to be unloaded. Literally, billions of dollars of product are floating offshore. Frequently, ships are taking more than one week to be docked. This in direct contrast to pre-pandemic times where ships waited very little time to be unloaded.

Three factors seem to be at play in causing the current delays.

The first is the growing consumer demand on behalf of the American public, which has endured 18 months of pandemic strain, and now is in a buying frenzy. The automotive, consumer product, and housing sectors are experiencing high demand. Many of the products and/or components to manufacture items such as automobiles, computers, and cell phones come from Asia via ship to the U.S. Suppliers and manufacturers are struggling to keep up with the demand.

A cargo ship is docked at the Port of Los Angeles in 2019. (AP Photo/Marcio Jose Sanchez)

Second is the fact that current port infrastructure is not equipped to handle the spike in demand. We are living in extraordinary times, and infrastructure cannot be improved overnight to expand service at ocean ports of entry. Think of the Arab Oil Crisis of the early 1970s. The Organization of Petroleum Exporting Companies, angered by the U.S. support of Israel during the Arab-Israeli War, enacted an oil embargo on the U.S., which caused shortages of fuel. Consumers were lining up at gas stations, sometimes for miles to purchase fuel. As the demand for fuel went up, gas stations were not able to expand their operations and construct new filling lanes quick enough to provide service. This is the same situation that the major ports of entry find themselves in, as pertains to demand.

The third factor causing backlog is the ships themselves. Today’s container ships are up to triple the size of ships that were being used 10 years ago. The capacity of a cargo ship is measured in 20-foot equivalent units or TEUs – this refers to a measurement of a container that is 20 feet long. The largest ships are now able to carry more than 23,000 TEUs, with ships slated to be delivered capable of carrying more than 24,000 TEUs. Larger ships require longer times to be off-loaded. More workers, equipment and even storage space are needed to accommodate shipments. This causes a logjam of ships waiting in line for their turn to be unloaded, and the situation exacerbates itself.

Delays have become so serious and unpredictable that larger firms are attempting to control their risk. Companies such as Home Depot and Walmart have begun leasing their own ships in an attempt to control the delivery times of their shipments. While these leased ships might also fall into the holding pattern of vessels waiting offshore from ports, it saves them from having to get in line to book their merchandise on major cargo ship lines.

In an effort to alleviate congestion, the Port of Long Beach is implementing a new pilot program to allow trucks to access cargo between 11 p.m. and 1:30 am. This will allow them to move more cargo out of the port and to transport it on highways at times in which there is less traffic. Many clogged ports are now studying the feasibility of moving to 24/7 operations.

In spite of efforts such as these, the backlog of container ships offshore that are waiting days to be unloaded does not appear to be abating in the near future. Current demand remains high, and the holiday season is right around the corner. In spite of the U.S.-China trade war and the tariffs it is imposing on goods imported from China, Americans will continue to buy economical Chinese goods that are shipped to us via sea containers. The largest ships in the world, at more than 24,000 TEUs, will see final construction and delivery in less than two years.

As these factors converge, beachgoers and surfers will continue to see a familiar fixture off of the southern California Coast – cargo-laden ships waiting their turn to dock.

Jerry Pacheco is the executive director of the International Business Accelerator, a nonprofit trade counseling program of the New Mexico Small Business Development Centers Network. He can be reached at 575-589-2200 or at


Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email

Nativo Sponsored Content

taboola desktop


Rise of the ‘traveler’
If you're a patient at a ... If you're a patient at a New Mexico hospital, the odds are better than usual that your ...
With COVID, ‘normal’ is a relative term
Elderly residents living alone know how ... Elderly residents living alone know how to protect themselves; they keep their doors shut and lock their windows at night
Roth conversions offer considerable benefits
I have been a fan for ... I have been a fan for many years of investors building their tax-free (Roth IRA) bucket as large as ...
Cherish your tax law experts; you need them
The law requires interpretation and judgment, ... The law requires interpretation and judgment, which is then subject to the risk preferences of the client
Trade woes mean 2022 will be pricier for consumers
Consumers should plan for higher prices ... Consumers should plan for higher prices and budget accordingly
RR shop owners expect prime holiday shopping season
RIO RANCHO – While ... RIO RANCHO – While national supply chain issues may impact big-box stores' holiday shopping ...
Can a job-seeker include unpaid work on their résumé?
Try listing your experience and accomplishments ... Try listing your experience and accomplishments under either Consulting or Freelance
Local wares and a tax holiday too: Small Business ...
Bright Spot
Small Business Saturday is a lifeline ... Small Business Saturday is a lifeline for some retailers
ABQ shopping centers adapt to consumer habits
Once a dominant feature of American ... Once a dominant feature of American life, shopping malls have been on a steady decline for the past ...
In-Depth with AMERIND: Investing in a 'togetherness' culture
An understanding of tribal sovereignty sets ... An understanding of tribal sovereignty sets AMERIND apart, CEO says