[Global Time Depth] Driver shortage, insufficient transportation capacity, warehouse explosion... Looking at the US supply chain crisis from the congested port: falling like dominoes!
[ Global Times special correspondent in the United States Zheng Ke and our reporter Ni Hao] Editor's words: Whether it is the latest report of the British think tank Oxford Economics, or the two major ports on the West Coast of the United States - the Port of Los Angeles in California and The chaotic situation of at the Port of Long Beach reminds the Biden administration that the supply chain crisis in the United States is still getting worse. The Port of Los Angeles and the Port of Long Beach are the two most important ports in the United States. At least 1/4 of the cargo entering the United States needs to be processed by these two ports. However, since the beginning of this year, the number of cargo ships stranded in these two ports has continued to increase. In order to allow more ships to unload, the newly unloaded containers have been squeezed aside by new containers before they can be counted. The messy yard looks like It looks like unstacked Tetris pieces. Due to the ongoing impact of the COVID-19 epidemic and the approach of Christmas, the U.S. commodity supply chain is encountering unprecedented challenges, and systemic problems have caused various links in the supply chain to fall one after another like dominoes. To address the immediate problem, the Biden administration has begun using strong medicine, but with little success.
On September 22, local time, the ports of Los Angeles and Long Beach in California, USA, experienced record congestion, with multiple cargo ships queuing up to wait for passage.
Containers with nowhere to place and empty shelves
According to Gene Seroka, executive director of the Port of Los Angeles, the port handles more than 800,000 standard containers every month. In September this year, it handled a record-breaking nearly 900,000 standard containers. Ten thousand TEUs. Even so, the congestion on the sea has not improved at all, and the waiting time for some cargo ships to unload has been as long as 14 days, which is almost equivalent to the time it takes for ships to cross the entire Pacific from Asia to North America . Philip Sanfeld, spokesman for the Port of Los Angeles, said there was no situation where ships were unable to dock before the outbreak. The U.S. Coast Guard warned that with the arrival of the winter storm, ships waiting at sea will face great danger and must anchor close to the port to ensure that they can survive the storm safely.
In order to speed up the unloading of ports, the Biden administration in mid-October required the ports of Los Angeles and Long Beach to operate 24 hours a day, 7 days a week, but even so, many unloaded containers were still unloaded. The reasons include delays in handling cargo at ports, a serious shortage of freight trucks and drivers, insufficient railway transportation capacity, widespread warehouse closures, and delays in picking up goods from merchants. Even though the Biden government has stated that shipping companies that leave containers stranded at the terminal will be fined $100 per container per day, the shipping companies still cannot change the status quo. After all, all steps after the container is disembarked are not shipping. Problems that the company can solve.
In addition, the soaring freight costs during the epidemic have also made cross-border transportation more difficult. " New York Times " recently reported that before the epidemic, it cost about US$2,000 to transport a container from Shanghai to Los Angeles, but now it costs at least more than US$20,000. Large chain retailers like Target and Walmart have had to wait weeks or even months for ordered items to arrive on shipments. As a result, shelves in American stores are often empty, especially consumables such as office supplies, children's and holiday supplies. On online e-commerce platforms, many products have to wait at least a month for their arrival.
Because the ports in California are too congested, many cargo ships bound for the West Coast of the United States go north to Seattle or Tacoma Port to unload. The Port of Seattle, which has never had a ship jam in the past, now has a schedule of two to three days to complete unloading. Cardillo, a truck driver who often goes to the Port of Seattle to pick up goods, told the Global Times reporter that due to port scheduling problems, many trucks were unable to enter the port and could not pick up goods. As a result, they were also complained by customers about late delivery.
“Congestion at U.S. ports has become a major constraint on U.S. economic recovery, and the main arteries of the U.S. economy have been constrained by it."One Shipping founder and CEO Zhong Zhechao told the Global Times reporter that the United States' dependence on imports is not only reflected in people's livelihood, but also the U.S. manufacturing industry needs to purchase a large number of parts and components from around the world. If the supply chain is broken, the prices of daily necessities in the United States will continue to rise. , pushing up inflation . U.S. manufacturing will also be in trouble due to shortages of parts. He believes that U.S. economic growth has slowed down unexpectedly in the third quarter, and if the supply chain breaks, it will make the U.S. economy even worse.
"There are problems in every link"
Bill Simon, former chairman and CEO of Walmart, said that the U.S. supply chain has always been "walking on the razor's edge" and is not a simple problem that can be solved by any one policy. Posted by Simon. The remarks came as more than 80 House members asked U.S. Transportation Secretary Pete Buttigieg to implement a plan to allow truck drivers under the age of 21 to cross state lines. Republican Rep. Dusty Johnson said that the The pilot program can add 3,000 drivers to the manpower-starved trucking industry, and the current shortage of truck drivers in the United States has reached about 80,000. Biden even said recently that if the driver shortage continues, he will consider calling in the National Guard to drive trucks to share the load. Logistics jobs.
A critical but often overlooked link in the supply chain, trucking is becoming a stubborn bottleneck in the cargo backlog chaos. Trucking accounts for 70% of U.S. freight, but many fleets cannot hire enough drivers. To meet growing consumer demand, the surge in cargo has left loading docks and port terminals at odds with each other, disrupting scarce trucking capacity and making it harder for drivers to do their jobs. At the same time, there is also a serious shortage of trailer floors, the most important part in truck transportation, so that even if you have a truck, you can't transport goods. Analysts believe that this has a lot to do with the U.S.'s trade war and the imposition of heavy taxes on China, the main supplier of trailer floors. . Yossi Sheffy, director of the Center for Transportation and Logistics at the Massachusetts Institute of Technology, bluntly stated that the fiscal stimulus policies introduced by the Biden administration in response to the epidemic, the impact of the epidemic on the global supply chain, and the aging of the U.S. logistics infrastructure have jointly led to the current situation. Supply chain crisis.
Bloomberg recently published an article stating that U.S. ports are rare in the world that have not implemented automation, and the dockworkers union that resists automation is the main resistance. The article believes that the union is promoting the interests of its members. Very effective, but these benefits come at the expense of other workers and the public - U.S. ports were already experiencing severe turnaround delays due to the inability to automate operations
Additionally, U.S. supply chains collapsed. There is another fundamental reason - the surge in demand due to the impact of the epidemic. Working from home has promoted the sales of a large number of office equipment and various fitness equipment. Even older Americans who have never used online shopping have begun to accept and become "addicted" to it. This way of shopping. In addition, activities such as dining out and long-distance travel have been reduced due to the epidemic. The epidemic subsidies issued by the U.S. government, extra cash, have also been invested by some people in home decoration and renovation, as well as in purchasing groceries, clothing and other daily consumer goods. But whether it is office supplies or daily department stores, the parts and components required for the manufacturing or assembly of these products require the United States to import them from overseas. Faced with huge demand, merchants began to increase their ordering of goods from overseas suppliers. At the same time, the shortage of goods further stimulated merchants to stock up in advance. With Christmas approaching at the end of the year, American consumers are worried about rising prices and believe that the sooner they stock up, the better. These exert continuous pressure on the supply chain from the source.
Zhong Zhechao told the "Global Times" reporter that the severity of the US port congestion has greatly exceeded industry expectations, and multiple factors have superimposed on each other and eventually become a chronic disease. He believes that various factors such as labor shortages, inefficiencies in terminal operations, chaotic digital systems, and inefficient management measures were mixed together, eventually detonating the U.S. supply chain crisis.Zhechao Zhong said that the Biden administration has actually recognized the seriousness of the situation and has taken a series of measures to deal with the crisis, such as establishing a supply chain trade action group and convening representatives of transportation companies, retail giants and dockworkers unions to discuss the issue. At the G20 Summit During the period, the "Global Supply Chain Resilience Summit" was organized. But at present, the effect of these measures is not obvious, because the blockage of US ports has caused problems in all aspects, forming a vicious circle. The Biden administration's policy of levying demurrage fees on ships is regarded by the industry as a powerful medicine, because if the fines caused by failure to unload the cargo in time may even exceed the value of the cargo on the ship, the ship owner is likely to abandon the cargo in the end. Not only will the problem be solved Solving it will only aggravate port congestion. Why is it difficult for
to use "strong medicine" to achieve results?
Lu Xiang, a researcher at the Institute of American Studies at the Chinese Academy of Social Sciences, told the Global Times reporter: "The pattern of globalization was basically formed in the 1990s. After 30 years of development, the world economy has formed an extremely wide-ranging and The interlocking network and the supply chain are becoming increasingly mature and stable, but on the other hand, the complexity of the global supply chain makes its operation extremely fragile, and local problems that cause embolism and will affect the overall operation." , the supply chain that had always been relatively smooth suddenly had problems, and it failed to attract the attention of the US government in a short period of time. It only responded hastily when the problem was serious enough to affect the macro economy, but it has been difficult to recover. Therefore, although the White House has stepped forward to coordinate all parties to speed up the resolution of the supply chain crisis, all walks of life in the United States are not optimistic that the crisis can be resolved quickly. Some even predict that port congestion will continue until the middle of next year. The New York Times commented that if the epidemic continues and the contradiction between supply and demand is not alleviated, it will be difficult to find an outlet for the out-of-control supply chain problems facing the United States and even the world.
Faced with problems that even the government cannot solve, Lane Peterson, CEO of San Francisco logistics and transportation company Flexport, suggested that the Port of Long Beach should allow higher-level containers to be stacked or ask the National Guard to help unload the cargo. Some large retailers have also begun renting moving company trucks to deliver goods. Joyce, who runs the Amazon third-party customer warehouse in Seattle, told the Global Times reporter that their warehouse was originally used to process returns from buyers, but now it has been completely requisitioned as a warehouse to store sellers' goods. But even so, there are still large quantities of goods that cannot come in, and freight drivers often have to pile goods at the entrance of the warehouse.
Long Beach Port Executive Director Mario Cordero said that if we do not implement "24/7" operation at every link of the entire supply chain, it will be impossible to effectively move so much cargo. However, the "labor shortage" in the United States caused by the epidemic will not improve in the short term. According to data from the U.S. Department of Labor, more than 4 million people have voluntarily chosen to be unemployed due to the strike wave initiated by labor unions. In addition, although the government has stopped large-scale epidemic subsidies, many blue-collar workers are still in a wait-and-see mode. US media analysis said that the income of ordinary American workers has hardly increased significantly in the past 40 years, and continued inflation is increasing the pressure on low-income families. Under the current strong demand for labor, they are more willing to choose jobs such as local transportation business, construction engineering and manufacturing that are "less work-intensive and less restrictive" than long-distance transportation.
Lu Xiang told the Global Times reporter: "Before the epidemic, employment in the United States was relatively sufficient. An important goal of the Biden administration's current economic stimulus is to solve the employment problem, but we have seen some incredible situations. On the one hand, the employment data is not good, But on the other hand, many workers are unwilling to come out to work while receiving government relief funds. "
We should learn from China how to manage ports
Zhong Zhechao told the Global Times reporter that during last year's Double Eleven, China handled as many as 6.75 million in one day. Billions of express items are a huge concept. "Behind this number are China's advanced and complete infrastructure and complex and efficient data processing systems, and of course the hard work and ability of the Chinese people." He said that in terms of port transportation, China's infrastructure and logistics system are also the most complete and leading in the world.Take the ports of Shenzhen and Ningbo as examples. As major trade ports in China, they are still expanding and introducing advanced data management systems. In contrast, the United States' infrastructure is relatively backward and there is no motivation for expansion. During the special period when the epidemic continues, the problem of ship congestion and port congestion has become increasingly serious. Coupled with the inability to respond, it has gradually evolved into a crisis.
In Lu Xiang's view, the American industry generally tends to be conservative and is unwilling to update technology on top of existing facilities. American ports have not even adopted more advanced communication data management systems like China, and lack the awareness of Industrial Internet . Therefore, the United States’ investment in port infrastructure is far from sufficient. Lu Xiang said: "In terms of warehousing and distribution, due to the promotion of e-commerce for many years, China has formed the world's largest, most complex and efficient network, which is much more advanced than the United States. China is not only the world leader in port hardware facilities, but also in management It is also unique in terms of system and management experience. If the United States needs it, China can even send skilled and experienced managers to assist the United States in solving port problems. "
According to the data released by the General Administration of Customs , Sino-US trade is still going on this year. Rapid rise. In this regard, Zhong Zhechao believes that for some Chinese companies, there are mixed blessings and worries behind this. Originally, the United States purchased globally, but due to the impact of the epidemic, such as the shrinkage of production capacity in Southeast Asian countries, the United States and Europe had to transfer some import sources to China. However, this part of the import will gradually disappear in the future as the epidemic in Southeast Asia, India and other places is controlled and production capacity is restored. . After the epidemic, the trend of decentralizing industrial chains in European and American countries will bring greater uncertainty and risks to China's exports, which requires the government or competent authorities to adjust the investment layout and production capacity expansion of enterprises at a macro level.
Zhong Zhechao also reminded that many daily necessities exported from China to the United States have low added value and slim profits. At present, freight rates from China to ports in the United States have fallen sharply from their peak, but are still at historically high levels, which are still unaffordable for some small and medium-sized enterprises. High freight rates have had a significant negative impact on China's low-end manufacturing industry. This requires the competent authorities to actively guide these enterprises to return to the domestic market and find room for development in the dual cycle.
Source: Global Network
