What the US port crisis looks like up close

Savannah, J.A.; Like blocks of toys thrown from the sky, nearly 80,000 shipping containers are stacked in various configurations in Savannah Harbor – 50 percent more than usual.

Steel crates wait for ships to take them to their final destination, or trucks to take them to warehouses that are themselves stuffed onto rafters. The owners left about 700 containers in the port on the banks of the Savannah River for a month or more.

“They don’t come to get their shipments,” complained Griff Lynch, executive director of the Georgia Ports Authority. “We’ve never had the yard as full as this.”

As he speaks, another ship glides silently toward an open dock—watch the 1,207-foot Yang Ming Witness, whose decks are crammed with containers filled with clothes, shoes, electronics, and other items made in factories in Asia. Soon the towering cranes picked up thousands of crates from the ship – more cargo that had to be stored somewhere.

“Certainly, the stress level has never been higher,” said Mr. Lynch.

It came to this in the great supply chain turmoil: They ran out of places to put things in one of the largest ports in the United States. As major ports grapple with a staggering backlog of cargo, what once seemed like a temporary phenomenon – traffic congestion that would eventually dissipate – is increasingly seen as a new reality that may require a fundamental reconfiguration of the world’s shipping infrastructure.

While Savannah Harbor runs through the backlog, Mr. Lynch reluctantly forced the ships to wait at sea for more than nine days. One afternoon, more than 20 ships were stuck in the queue, moored up to 17 miles off the coast in the Atlantic.

Lines like these are becoming commonplace around the world, from more than 50 ships stranded last week in the Pacific Ocean near Los Angeles to smaller numbers bobbing from terminals in the New York area, to hundreds of ports in China.

The disturbance The shipping industry and the broader crisis in supply chains are showing no signs of abating. It stands as a deadly source of concern throughout the global economy, challenging once hoped assumptions of a strong return to growth as vaccines curb the spread of the pandemic.

The disturbance helps explain the cause Germany’s industrial wealth dangle, why inflation It’s becoming a concern among central bankers, and why US manufacturers now wait an average of 92 days to assemble the parts and raw materials they need to make their goods, according to Institute of Supply Management.

On the surface, the disruptions appear to be a series of interlocking shortages of products. because shipping containers In short supply in China, factories that rely on Chinese-made parts and chemicals in the rest of the world have had to limit production.

But the situation in Savannah Harbor testifies to a much more complex and insidious series of intertwined problems. It’s not just about the scarcity of merchandise. It’s that products are stuck in the wrong places, separated from where they’re meant to be due to stubborn and ever-changing barriers.

The shortage of finished goods at retailers is the flip side of stacked containers on ships stranded at sea and crammed on the banks of the river. The backlog in warehouses is itself a reflection of the shortage of truck drivers needed to transport goods to their next destinations.

For Mr. Lynch, the man in charge in Savannah, the frustration is reinforced by a sense of powerlessness in the face of circumstances beyond his control. Whatever he does to manage his ponds along the mysterious Savannah, he can’t tame the aura that plays out on highways, in warehouses, in ports across the ocean and in factory cities around the world.

“The supply chain is awash in water,” Mr. Lynch said. “It is not sustainable at this point. Everything is out of control.”

Born and raised in Queens with a no-nonsense demeanor to prove it, Mr. Lynch, 55, has spent his career dealing with the logistical complexities of shipping. (“I really wanted to be a tugboat captain,” he said, “There was only one problem. I got seasick.”)

Now, he’s facing a storm unmatched in intensity and streak, a storm that has virtually expanded the oceans and increased the risks to cruises.

Last month, his yard contained 4,500 containers that had been stuck in the docks for at least three weeks. “This is ridiculous,” he said.

The persistence of these tensions, even in Savannah, attests to the scale of the chaos. The Port of Savannah is the third largest container port in the United States after Los Angeles, Long Beach, New York, and New Jersey, and has nine berths for container ships and plenty of land for expansion.

To ease congestion, Mr. Lynch is overseeing a $600 million expansion. It replaces one berth with a larger one to accommodate the largest container ships. It expands the storage yard over another 80 acres, adding space for another 6,000 containers. It is expanding its rail yard to 18 of five tracks to allow more trains to tow, and is building an alternative to trucks.

But even when Mr. Lynch sees development as inevitable, he knows that expanded facilities alone will not solve his problems.

“If there’s no place here, it doesn’t matter if I have 50 berths,” he said, looking at the stacks of containers.

Many of the containers are stacked five times high, making it difficult for cranes to sort through towers to lift needed boxes when trucks arrive to haul them away.

This afternoon, under harsh sun, the port is on track to break the activity record in a single day – over 15,000 trucks coming and going. However, the pressure is increasing. A tug escorting another ship to the pier – MSC AGADIR, fresh from the Panama Canal – carrying more cargo that must be parked somewhere.

In recent weeks, the shutdown of a giant container terminal off the Chinese city of Ningbo has increased delays. Vietnam, a garment-making hub, has been shuttered for several months in the face of a horrific outbreak of Covid. The dwindling goods leaving Asia should provide respite for the clogged ports of the United States, but Mr. Lynch rejects that line.

“After six or seven weeks, the ships come all at once,” said Mr. Lynch. “It doesn’t help.”

Early this year, with freight rates soaring and containers becoming scarce, the problem was widely seen as a temporary consequence of pandemic lockdowns. With schools and offices closed, Americans were stockpiling home office equipment and equipment for gyms in the basement, relying heavily on factories in Asia. Once life reopens, global shipping should have been back to normal.

But half a year later, congestion has gotten worse, with nearly 13 percent of the world’s cargo capacity being hampered by delays, according to data compiled by Sea-Intelligence, an industrial research firm in Denmark.

Many companies now assume that the pandemic has fundamentally changed business life in lasting ways. Those who have never shopped for groceries or clothes online – especially the elderly – have tasted relief, and have been forced to adapt to a deadly virus. Many will likely retain this habit, which keeps pressure on the supply chain.

“Before the pandemic, would we have imagined Mom and Dad pointing and clicking to buy a piece of furniture?” Roel Joyner, owner of 24E Design Co. A boutique furniture outlet occupies a brick storefront in Savannah’s gorgeous Historic District. Its online sales have tripled over the past year.

On top of these changes in behavior, supply chain disruption has created new frictions.

Joyner, 46, designs his furniture in Savannah while relying on factories from China and India to manufacture many of his wares. Turmoil at seas slowed deliveries, limiting his sales.

He pointed to a brown leather chair made for him in Dallas. The manufacturer struggles to secure the reclining mechanism from its supplier in China.

“Where did we get the stuff from in 30 days, they tell us now six months,” said Mr. Joyner. Customers call to complain.

His experience also confirms how shortages and delays have become a concern about fair competition. Retail giants like Target and Home Depot have responded by stocking merchandise in warehouses and, in some cases, renting their own ships. These options are not available to the average small business.

Jams have a way of causing more jams. As many companies asked for more and earlier, especially as they prepared for the holiday season which was taking all of its energies, warehouses became overcrowded. So the containers piled up in the port of Savannah.

Mr. Lynch’s team – usually focused on his own facilities – has devoted time to cleaning up unused warehouse space indoors, seeking to provide customers with alternative channels for their shipments.

Recently, a major retailer filled 3 million square feet of entire local warehouse space. With containers piling up in the yard, port employees worked to ship freight by rail to Charlotte, North Carolina, where the retailer had more space.

This creativity may provide a bit of relief, but the demand for the port is growing sharper.

On a humid late September afternoon, Christmas suddenly felt at hand. Containers stacked on the banks of the river were surely filled with holiday decorations, baking sheets, gifts, and other items for the largest consumer wave on Earth.

Will they reach the stores in time?

“That’s the question everyone is asking,” Lynch said. “I think that’s a very difficult question.”

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