SHIPPING DELAYS HELPING TO INFLATE PRICES

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Ports clogged with goods lined up to enter or leave are causing shortages of raw materials and consumer goods and contributing to inflated prices around the world.

Globally, about 40 percent of container ships were entering ports on time in March, with average delays of more than six days as ships anchored offshore to wait their turn at the docks, according to Sea-Intelligence ApS, a Danish data firm.

The figure shows a slight improvement from February’s pace but is still barely half of the 70-percent on-time arrivals that prevailed before the world’s 2020 economic shutdown.

The delays result from floods of goods trying to reach markets where consumers are venting pent-up demand. 

The surge has led to a shortage of shipping containers, which worsens the delays and has contributed to soaring shipping costs.

Although ships traveling the Atlantic Ocean between Europe and the U.S. face long delays, the world’s busiest ports are in Long Beach and Los Angeles, CA, the Wall Street Journal reported.

“It normally takes 14 days to sail from Shanghai to Los Angeles; now it takes 33,” logistics chief Vincent Clerc at Moeller-Maersk, the world’s largest shipping company, told the WSJ. “The sailing time is the same but you spend twice the time waiting to unload.

“We have invested millions of dollars in extra capacity but a large part of that capacity is immobilized because of congestion in the U.S. west coast,” he said.

While delays begin at ports, they extend to rail yards, where there are more goods to move than train cars available to load them quickly; and to distribution centers, which are short of warehouse workers and, especially, truck drivers.

The shortage of ships, trucks, and trains has sent shipping prices soaring.

The cost of moving one 40-foot shipping container from China to the U.S. was $5,650 last week, the WSJ reported, an increase of 34.5 percent since this year began and 228 percent compared to a year ago.

Now the clogs may be beginning to clear.

For several days last week, only 20 ships were lined up waiting to offload at California’s southern ports, about half as many as during the peak traffic jams of February and March, the Marine Exchange of Southern California reported.

Although that figure is the lowest since November, normally there are no delays in getting a ship to a dock, the exchange told the WSJ.

TRENDPOST: We note this article to again illustrate the scope and depth of inflationary pressures and why and how inflation will continue to rise. Indeed, even as conditions moderate, shipping costs will not plummet... until interest rates rise and the “Greatest Depression” spreads across the globe. 

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