The glut in container ships off the coast of California has farmers worried that it will affect their exports. Ports in California have been struggling with a backlog that may last throughout the new year. According to reports, hundreds of ships have been sitting idle for weeks waiting to offload their containers. California's ports handle 40% of all container imports and 30% of all container exports for the US, which means its difficulties can have an impact on the entire country.
The Long Beach port may process more than 9m container units this year, far above last year's record of 8.1m units. The port is on track to process more containers than it ever has in its history.
Rising Shipping Glut and Costs
Due to the backlog in ships, fewer ships are making the trip back, resulting in fewer means for farmers to export their goods. The problem isn't just in California; it's a global issue. The pandemic saw a rise in consumer goods amid worker shortages and slowdowns in major ports. The ports had to shut down as part of broader health regulations, and workers along the supply chain had to stay at home, leading port authorities to reduce shipping schedules.
The high demand for products isn't only creating a glut at ports, but it is increasing container prices. Once they leave Southern California ports, the high prices incentivize shippers to immediately return to Asia for more products bypassing the Oakland port, which is responsible for shipping tree nuts.
Government Solutions
President Biden has recently announced that the LA port would operate 24 hours a day to ease congestion. California's governor, Gavin Newsom, has also exempted various laws, allowing vehicles to carry more cargo, designating more land for container storage, letting container stacks to have more than two, and taking other actions.
The surge in consumer demand, driven by savings and social security programs, has led to a shortage in goods. In turn, the shortage and glut in the supply chain and the rise in consumer demand have led to increasing costs for consumers. The supply chain glut is a contributing factor towards inflation. This means both consumers and businesses will have to deal with shortages and rising costs of goods.
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