As prices continue to climb, container ships wait to dock in a tremendous traffic jam off the California coast at the Port of Los Angeles – despite expanded operations. Some are reporting that the logistical challenge is threatening the U.S. economy, with container ships stranded and unloaded goods awaiting trucks. The problem may lead to mass shortages and delays causing inflation and potential holiday shopping challenges.
How bad is the Port of Los Angeles logistical pileup in? On the October 13, the Marine Exchange of Southern California tweeted 80 ships were anchored, 64 at berth, totaling 144 ships in the area of Los Angeles and Long Beach. With billions of dollars’ worth of merchandise and goods on board these container ships, even the LA Times recognizes the problems associated with dozens of ships waiting off the coast to be unloaded.
The Biden administration has negotiated a 24/7 operations policy at the Port of Los Angeles, but will it be enough to impact the problem? The administration acknowledges there is also a truck driver shortage, further frustrating the problem. Moving the goods from port to other parts of the country seems to suddenly be a momentous task when no publicized problems existed a few weeks ago.
Florida Has A Solution
However, the State of Florida has a solution for this logistical challenge. This week, the Florida Ports Council tweeted, “Don’t let the cargo shipping logjam in California be the Grinch that stole Christmas… save time and money by choosing Florida shipping lanes.” The council understands the desire for Asian manufactured goods to arrive on the west coast of the U.S., but the situation dictates other solutions, suggesting Florida is the answer.
Mike Rubin, President and CEO of the Florida Ports Council (FPC) stated, “Yes, it may be a little more expensive to take that route [Panama Canal] on a water tour, but you’re paying for moorage fees, you’re paying for other fees over there just sitting off the coast, and your product’s not getting to the shelves in time.” The transit cost for the Panama Canal is about $450,000 for the largest ships, with a seven-day journey in good weather to one of Florida’s 15 ports.
The Florida Port Council states that the once the vessels arrive in Tampa, Miami, the Everglades, or Jacksonville, products could be brought to market on the eastern seaboard in about two to three days, via rail or truck. Rubin said, “You’ve got to quit looking at that trade route that you’ve been using since the ’70s and look to more efficient routes to move goods.”
While Florida seaports are open for business and California’s remain cluttered, will the invitation and the FPC desire to lure shipping companies to the Sunshine State be successful? Thursday, the Port of Tampa Bay said they were “not seeing any congestion or delays that have been creating issues for the other ports. Our port stands ready to welcome new business and serve as a supply chain alternative and solution.” Jacksonville’s ABC affiliate First Coast News broadcast that European-US container service Hapag Llyod has rerouted its inventory to JaxPort, bringing an additional 1,000 containers over the next 8 months. JaxPort has moved just over a million containers so far this year, while the Port of Los Angeles website states that they have moved over 7,273,052 containers during the same period (up 30% from 2020).
The FPC President stated he is not sure if everyone can get their Playstation for Christmas. But he believes Florida is “…a solution to some short-term problems.” No doubt Florida can collectively decrease inflation fears and increase on time delivery of goods for Christmas, if some of the ships are redirected from the Port of Los Angeles.