Where Did All The Ships Off LA and Long Beach Go? We Found Them!
If you are wondering what happened to the supply chain problem, it’s not exactly gone, but it’s being handled by the shipping companies. As for costing a lot of money, rest assured, the solution is costing a lot of money. The rates are down but still high.
The ports of Los Angeles and Long Beach are not full. The smaller ships are not coming in, but the larger ones are, but not very many. So, where are they?
Fearing a longshoremen strike, everyone shipped early, and many of the 3rd quarter goods were shipped in the first two quarters.
Also, shippers decided to diversify. The new lane in the Panama Canal allows the larger container ships to pass through. So, shippers are going through the Canal. Some are heading for Europe, where they put the goods on smaller ships to the United States. It’s not cheap, and shippers don’t appear interested in seeing the rates go down too much.
Freight rates have come down significantly, but they are still very high. Where will it level off? Look at how low they were pre-COVID in the chart below. The Ocean carriers are slowing down their passages to diminish the supply to back up the freight rates. They are also going to head elsewhere. This will raise rates. Increasing fuel prices will raise rates. The rates probably won’t go back to pre-COVID rates. Shippers don’t want that. They made $60 billion with the high rates.
Many ships that usually head for the West Coast are heading for the East Coast. The supply chain issue hasn’t gone away.
The comments on youtube were interesting. They addressed inflation, California regulations, slow steaming, and COVID shutdowns in China.
Watch:
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Check out all those freight containers surrounding your local Walmart. Never seen that before. Back orders? Pre orders?
During the 1990s, I used to be a merchant Seaman, Radio Officer and a Licensed Engineer. A lot more Chinese Shipping is going to East Coast Ports today. It takes longer to go to the East Coast by ship, but it’s actually cheaper. With the high cost of fuel to ship by truck from the West Coast to the East Coast, it’s now cheaper overall to ship directly to the East Coast population centers than to truck containers across country. Overall, it takes one to two additional weeks to get shipments to the East Coast from Chinese Ports.
I breakfast at local truck stop regularly. Truckers who used to do runs from L.A. are now moving containers from Jacksonville, FL, Mobile, AL, Biloxi, MS, and Houston, TX. East Coast Ports have been operating below capacity for years and so can easily handle the extra cargo.
One other thing of note. California has probably permanently lost 20% to 40% of their shipping business, That will have a significant long term impact on the California economy.
M. Dowling is on top the important news as usual and keeping us updated.
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