Is Infrastructure To Blame For California’s Port Problems?
From Los Angeles to Long Beach, cargo ships are backed up off the coast. The supply chain snafu leaves ships vying for the same docks and often backs them up for as much as a week. At its peak, as many as 40 ships and 14,000 containers float aimlessly around the sea, and businesses are often left wondering when they’ll get their shipments.
What is causing this major issue in the supply chain?
Voice of B2B, Daniel Litwin, talked on MarketScale TV with Tray Anderson, Industrial & Logistics Leader, Americas, Cushman & Wakefield, a leading commercial real estate services firm, about America’s infrastructure, COVID, and supply chain management and how these things fuel these supply chain issues.
The ASCE’s 2021 America Infrastructure Report Card upgraded to a B- from a C+, as port infrastructure improved over the past four years. With those improvements, a funding gap of $15.5 billion must be met to enhance waterside infrastructure over the next ten years.
Anderson noted the log jam at the ports in California is a pre-pandemic issue. They are already operating at near capacity, and when there are large surges, especially during COVID, you start to see this backup.
“These ports are not operating at 60 percent capacity; day-to-day, they’re already operating at near-peak capacity,” Anderson said. “And when you have these surges the pandemic has pushed, what I call ‘lumpy demand,’ that’s when you have these backups.”
Over time the backlogs get worked down, but not quickly.
The infrastructure projects take time, and the ROI isn’t immediate. Routing selection is also something that suppliers and businesses are doing to alleviate backup issues.
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