International Cargo Shipping Now at the Top of the News Headlines

On August 9, I quipped about how you probably will be able to find toilet paper on your local grocery store shelf but that it might only be the single-ply type. Now, it seems that even finding the store brand may be difficult. With cargo prices having soared over the past year and a half, the story about supply chain woes is now at the top of the headlines, having gained widespread attention over the past week.

Severe shipping delays have been causing shortages on shelves and are threatening to keep holiday-season gifts from being delivered on time. In many stores, they may be out-of-stock before the season even begins. And for those that do make it to the shelves, their cost is expected to rise by as much as 10 percent, leading to a period of inflation that could go on for longer than expected.

Breaking Down the Reasons

The situation on the retail end is mostly due to backlog at ports, the most significant of which being the Port of Los Angeles, which has been the busiest in the Western Hemisphere for the past 20 years. According to its website, the San Pedro-located port is a bellwether for the health of the overall US economy, due to its record volumes of containerized trade, its connection to one in nine jobs in Southern California, and nearly three million jobs nationwide.

As a result of the backlog, dozens of ships have been stuck in a traffic jam off the Southern California coast for over a month waiting to dock and unload items, such as electronic devices, shoes, and vehicles. President Biden, for his part, said that he would try to help expedite the delivery of goods across America and announced that the Port of Los Angeles would be expanding its hours of operation to 24/7. Even with that, however, there is a shortage of truckers that is keeping supplies from being distributed across the country and making the situation appear all the more grim.

Frustration at the situation has also led some to blame the political echelon, with the hashtag #EmptyShelvesJoe being used to criticize the president for not doing enough to remedy the predicament. The hashtag also reached the top of trending topics on Twitter this past week.

Record High Costs

All of this comes as the cost of transporting shipping containers continues to rise to record high rates. Freightos reported that the average cost of shipping a standard rectangular metal container from China to the West Coast reached $20,586, which was nearly twice the cost in July 21 and some four times the cost in January 2021. This makes for a particularly volatile situation, considering that demand for goods, rather than demand for services, has risen tremendously over the course of the Covid-19 pandemic, compounding the strain on the supply chain. As a consequence of the resurgence in Covid infections over the summer, primarily due to the prevalence of the Delta variant, this goods-services-imbalance has not yet really shifted back.

What About That Toilet Paper?

And about that single-ply toilet paper, Costco CFO Richard Galanti said on an earnings call on September 23, 2021 that the company would be reinstituting purchasing limits on key items, such as bath tissues, roll towels, signature water, and high-demand cleaning-related skews. Yes, friends, that includes toilet paper. By the way, he also said that some suppliers are paying up to six times the amount for shipping relative to previous quarters and that pulp and paper goods are up between four to eight percent. He revealed that the company has chartered three ocean vessels to transport containers between Asia and North America in addition to having leased several thousand containers for use on those ships.

Faster Freight Remains as Committed as Ever

At Faster Freight, our experts are fully aware of the potential obstacles this continuing situation could cause. Our management team is closely monitoring the current environment within the world of logistics to ensure that any possible interruption to our services can be mitigated as much as possible. With the holidays around the corner, shipping industry professionals understand the importance of delivering those packages to those special people — and if worse comes to worst, we can always have a word with Santa.