It is no secret that COVID-19 changed our lives drastically, although the U.S. has fared better than many other countries regarding port and supply chain operations. With the vaccination process going forward with full speed, many thought that the crisis will be done and over with soon. However, the current situation on the U.S. West Coast suggests otherwise.
As we go through 2021, major ports such as Los Angeles and Long Beach face major bottlenecks.
Even though ports try to move forward with drastic measures, it is almost impossible to solve the situation in short time. Due to ports trying to handle shifts during the pandemic with so few staff, costs also increase due the limited space in existing services. Another industry that is affected by this situation is drayage. It is safe to say that the similar conditions also apply to trucking. To capture the attention of drayage service providers, one might have to pay more sometimes – even double their usual rate – for regular service since the high demand puts these industries in an advantageous position.
To avoid the bottlenecks shipping lines are opting to promote and boast the capacity at Oakland and Seattle-Tacoma ports in the next two to three months. New services opening up from these ports might be the long-awaited solution and we are yet to see another solution. This also might result in a shift in cargo which will be a benefit to the surrounding areas since solutions will provide a better competition in the West Coast.
Chinese New Year also contributes to this bottleneck.
This is due to the fact that equipment availability relies highly on imports in the U.S. Carriers may be forced to decrease the amount of free time all over the world and initiate premiums to avoid equipment shortages. With oil prices going up, it will surely drive costs higher. It is also safe to say that with the current uncertainty in markets all over the world, 2021 looks just like 2020.