One year after the coronavirus pandemic first disrupted global supply chains by closing Chinese factories, fresh shipping headaches are delaying U.S. farm exports, crimping domestic manufacturing and threatening higher prices for American consumers.
The cost of shipping a container of goods has risen by 80 percent since early November and has nearly tripled over the past year, according to the Freightos Baltic Index. The increase reflects dramatic shifts in consumption during the pandemic, as consumers redirect money they once spent at restaurants or movie theaters to the purchase of record amounts of imported clothing, computers, furniture and other goods.
That abrupt and unprecedented spending shift has upended long-standing trade patterns, causing bottlenecks from the gates of Chinese factories to the doorsteps of U.S. homes.
The commercial disorder is just the latest blow to globalization’s finely tuned engine, capping more than a decade of financial crisis, trade wars, contagion and recession. Each shock has triggered swings in the flow of cash and goods through the $91 trillion global economy. But reverberations from the pandemic are exposing vulnerabilities in the physical plumbing of cross-border commerce that may linger, according to exporters, port officials and trade specialists.
“It’s crazy. Prices are at record highs. Multiple things are happening all at once,” said Phil Levy, an economist with Flexport, a San Francisco-based freight forwarder. “People work off of expectations. But now there’s just so much uncertainty.”
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At the Port of Los Angeles one day last week, 42 ships were anchored offshore, waiting to unload their cargoes, even as every warehouse within 60 miles was already full. A shortage of dock workers amid California’s worsening coronavirus outbreak is further complicating operations; inbound cargo volumes in December were more than 23 percent higher than one year earlier.
“Some areas of the supply chain need to be sharpened,” Gene Seroka, the port’s executive director, said. “People are a little bit on edge.”
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