Port of Long Beach executive director warns of high shipping, transport prices ‘will be passed down to consumer’
The executive director of the Port of Long Beach, the largest container port complex in the United States, warned on Monday of an industry “crisis” over supply chain disruptions.
Mario Cordero argued on “Mornings with Maria” on Monday that “the supply chain is definitely disrupted and has been for some time” and that, therefore, “the situation is in a crisis mode.”
Ports have become one of many bottlenecks in global supply chains as ships fill up with boxes carrying everything from electronics to holiday decorations.
Cordero noted that there is a “confluence of factors” as to why the situation evolved into a “crisis”, explaining that the disruption in the supply chain caused by the COVID-19 pandemic is “very high”.
He explained that there have been “delays in cargo coming from China”, noting that China has “major ports” and terminals are closed when a COVID-19 positive worker is detected.
Cordero said there were 73 ships “on anchor” last week, however, by Monday that number had dropped to about 62.
He also pointed out that another big factor is skyrocketing consumer demand in the United States, especially as it pertains to online ordering amid the pandemic as more people have opted to shop from home.
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“Our economy is looking at 6% growth this year, year-over-year and for consumers, whether it’s e-commerce or brick and mortar, it’s really healthy,” Cordero told host Maria Bartiromo. .
The Wall Street Journal reported earlier this month that leaders of some of the nation’s busiest ports expect overcrowding at maritime gateways to continue through 2022, noting that those reaching US shores during this year’s peak shipping season A record number of containers have already overflowed the port.
The number of ships waiting for space at the Gateway to Southern California is reportedly on the rise as logjams spread to warehouses and distribution networks across the US.
The Wall Street Journal, citing the Global Port Tracker report produced by Hackett Associates for the National Retail Federation, reported that major US ports were projected to handle the equivalent of about 2.37 million imported containers in August, the most for any month on record. is more. Dating since 2002. Federation reportedly said inbound volumes for the year will reach 25.9 million containers, measured in 20-foot equivalent units, breaking last year’s record of 22 million boxes.
Cordero warned that because shipping and transportation prices have “skyrocketed,” the higher costs are “unfortunately passed on to the consumer.”
On Sunday, The Wall Street Journal reported that Nike doesn’t have enough sneakers to sell for the holidays and has increased artificial Christmas tree prices by 25% this season.
On Monday, Cordero noted that items “across the board” are affected by supply chain issues, including raw materials and durable goods.
He explained that a lot of Nike shoes are manufactured in Vietnam and that it is “in the same condition that China is.”
“If they have a COVID-19 positive [worker]”By just one person, they close the port,” Cordero told Bartiromo. “And, of course, that’s a big factor in the delay.”
Cordero encouraged consumers to “shop early” because of supply chain delays.
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He said the Port of Long Beach is expanding 24-hour operations from Monday to Thursday to help reduce the backlog of ships waiting to unload cargo. Cordero said the move to increase gate hours is a step toward increasing hours seven days a week in the near future.
Cordero predicted on Monday that in the second quarter of next year, consumer purchases will ease, believing that this will lead to “a scenario where the supply chain will return to some form of normalcy.”
“But for now, keep in mind that we are in peak season in this industry, and that means a higher amount of holiday shopping,” he continued. “So I think we’re going to have that position for the next few months, but hopefully by early next year it will ease.”