California Ports Remain a Supply Chain Chokepoint

By Alan Wolf, YSN

Despite a promise of moving to 24/7 operations, as do most major ports in Europe and Asia, the busiest port complex in the U.S. — the ports of Los Angeles and Long Beach — continue to operate at 60 percent to 70 percent capacity, with more than sixty container ships waiting their turn to unload.

While the Long Beach facility said it would move to around-the-clock operations, at least Monday through Thursday, the larger Port of Los Angeles said the lack of truckers and warehouse operators to move the imported goods would only lead to greater pileups, The Wall Street Journal reported.

“It has been nearly impossible to get everyone on the same page towards 24/7 operations,” said Gene Seroka, executive director of the L.A. port.

Meanwhile, the time it takes to move a cargo container from Asian factories to North America has doubled since the pandemic to about 80 days, Nike executives told the newspaper, which will result in a shortage of the company’s sneakers his holiday season.

Similarly, port delays and container and trucker shortages, plus consumers’ COVID concerns have compelled Costco to reimpose limits on purchases of paper towels, toilet tissue, bottled water and cleaning supplies, CFO Richard Galanti told investors last week on a fourth-quarter earnings call.

Galanti noted that rollout times for furniture have grown from 8-12 weeks to as much as 16-18 weeks, while chip shortages continue to impact appliances and consumer tech.

He added that to help open the pipeline and ease a sixfold increase in container and shipping costs, Costco has chartered three transport ships and leased several thousand containers for use between Asia and the U.S. next year.