There is no end in sight to the large and ever-growing “flotilla” of container ships at and around California’s logjammed Los Angeles and Long Beach ports, according to The Wall Street Journal (subscription).
Formerly smooth sailing: “Before the pandemic, it was unusual for more than one ship to wait for a berth.” As of last Sunday, there were 73 ships waiting at these ports, nearly double the number that were stalled there a month ago.
No way around: “Big vessels are continuing to join the bottleneck, experts say, because shipping lines and their cargo customers have few options for resetting countless supply chains moving goods into the U.S. that have been constructed over decades around the critical San Pedro Bay gateway now staggered by the overflowing demand for imports.”
- These California ports are within “easy reach” of China and its goods-producing factories.
- The congestion has been caused largely by a surge in imports, owing to rising goods demand, coupled with a rush to restock pandemic-depleted inventories.
Other routes come up short: “Some shippers have shifted freight to U.S. Gulf and East Coast ports, but that alternative also comes at a cost since it adds weeks to transit times from Asia, and the longer routes are more expensive than shipping into the West Coast.”
Continued tariffs: The United States will continue to follow the policies set out in the “Phase One” plan negotiated under the previous administration in 2020. Those policies include significant tariffs, which impact about half of China’s current exports to the United States.
Exemption opportunities: In a win for manufacturers, the United States will resume a process that allows U.S. companies to request exemptions from tariffs. The process had been closed initially at the beginning of the Biden administration, creating challenges for manufacturers in the U.S. that do not have cost-effective alternatives to specific materials sourced from China.