Christmas Chaos: Shipping Delays Mean Santa Might Be Late This Year
Andrea Gonzalez
International Business Writer
As consumers pledged their allegiance to e-commerce amid pandemic restrictions on outdoor experiences, the shipping industry has been at the height of demand. The world’s largest shipping companies and ports are running low on containers, truck drivers, and dock workers. Even the highest productivity rates cannot keep up with the world’s shipping schedule and it seems like Santa might be late this year, unless people shop earlier.
Among the survivors of the pandemic, the shipping industry seems the one to have trouble breathing as a shortage of workers and shipping tools are behind schedule. Despite an increasing demand for consumer goods such as electronics, clothing, and toys companies cannot keep up with hundreds of ships carrying thousands of containers on standby in ports and even adrift areas around the globe. Executive director of the Port of Long Beach, Mario Cordero told Business Insider that “the supply chain is definitely disrupted and has been for some time,” revealing some of the weak links that set off the current shipping crisis.
The shipping industry has been letting loose in recent years, with continuous delays and increasing prices in containers – the backbone of the shipping industry. Containers as long as 40 feet took the stage in the early 2000s as global trade of consumer goods began to boom. In recent years, with people constantly buying goods manufactured in China, the state’s container manufacturing industry will not be able to fulfil container orders until early 2023. The shortage has increased the prices of cargo containers from $2,000 to $6,000 – $7,000.
The Trump Administration’s trade war on Chinese imported goods and the brutal Chinese lockdown took an immense toll on cargo shipping worldwide. However, people still expect their packages to arrive within two days and many businesses refuse to let go of their most profitable promotion, free deliveries. The political and economic turmoil of the last year along with inventory issues are destroying the supply chain as many businesses are running low on supplies.
As Christmas holiday approaches, shipping companies are afraid gifts may not arrive until early 2022. In early October, Golden Week takes place in China, which includes days off for millions of supply chain workers, and sets the deadline to get shipments out of the nation that still runs about a third of the manufacturing of the world, as reported by Bloomberg Business. With America’s retail manufacturing centers largely based in China, it is almost impossible that companies will be able to get their goods out of the nation on time for distribution in American ports and later warehouses.
In Europe and Asia, ports, truck drivers, and warehouses seem to operate twenty four hours a day, seven days a week, but America is short on staff. The largest national port in San Diego, California cannot operate at maximum capacity due to a shortage in dock workers and truck drivers. The situation also affects local distribution as ground shipping companies like USPS and Fed Ex desperately try to find workers in post-pandemic conditions. Companies like Amazon and Peloton are placing their greatest bet on air carriers, with Peloton investing over $100 million in air freight and overpriced sea shipment.
Nevertheless, it seems like the accumulation of weak links throughout the decade has left the shipping industry in great distress. More people are quitting the draining conditions of shipment business, and workers are demanding better treatment and benefits since the end of America’s lockdown. Managers and port executives advise that if a person sees something that may be meaningful for the upcoming holidays, it is in their best interest to buy it.
Contact Andrea at andrea.gonzalez@student.shu.edu