Shipping industry in "crisis mode" as cargo ships float off the shores

World: A historic backlog of cargo ships in Southern California has devised the supply chain and shipping business in crisis, Mario Cordero, executive director of the Port of Long Beach, warned this week.

Cordero, who oversees one of the country's busiest ports, has advised people to start holiday shopping as soon as possible due to supply chain disruptions. The port will move around 20 million containers this year, more than ever before, Cordero told Fox Business. Consumers will certainly feel the pinch, as businesses at all levels - from raw supplies to long-lasting goods, electronics, furniture and auto parts - have been hammered by shortages and delays.

“The supply chain is definitely disrupted and has been for some time,” Cordero told the media. "The state is in crisis mode."

Earlier this month, the ports of Los Angeles and Long Beach broke several records for the number of ships at the scene, as well as the number of freighters waiting to dock. Since then, the number of ships has dropped slightly, but ports maintain unprecedented levels of congestion. As of Tuesday, the ports were home to 144 ships - including 66 container ships waiting offshore at anchor or in drift areas, according to data from the Marine Exchange of Southern California. Before the pandemic, ports typically saw an average of zero to one ship waiting to dock, but now ships are waiting weeks to unload.

Cargo from ships currently anchored in California ports - which handle nearly half of all U.S. imports - likely won't be seen until late October or November, Brian Whitlock, senior managing analyst at Gartner, said on LinkedIn.

To remedy the record delays, the Port of Long Beach decided this month to increase its opening hours to 24 hours from Monday to Thursday. While the two ports of Los Angeles and Long Beach are often counted as a single port due to their closeness, the slightly bigger port of Los Angeles has not followed suit, choosing instead to maintain its existing schedules which do not include 24 hour work.

Cordero said Long Beach planned to use its extended hours as a pilot program for 24/7 operations - much like many ports in Asia and Europe - but was unable to do so until present due to a shortage of workers in the dockworker industry. truckers and storekeepers.

Port of Los Angeles executive director Gene Seroka told CNBC's Squawk Box on Tuesday that extending the port's hours of operation would not solve the problem. He said about 30% of truck appointments are not used every day because the port needs full coordination with trucking companies and warehouses.

“We've had longshoremen at work six days a week since the start of the pandemic, but it's the truck drivers and warehouse workers we need to strengthen,” Seroka said.

Grunts in the supply chain have already created shortages and price hikes across the country. Nike said on Sunday it didn't have enough sneakers to sell for the holidays. Last week, Costco announced a limit on the amount of toilet paper and packages water buyers could purchase.

Cordero told Fox Business he doesn't see consumer demand diminishing until the end of next year as demand for the holidays, as well as corporate efforts to replenish inventory continue to strain the chain supply chain at a time when it is still battling COVID-19 closures in Asia.