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- [Reporter] An average of 30 container ships
has sat anchored daily just off the coast
of Los Angeles this year.
- The normal number of container ships
at anchor is zero to one.
- [Reporter] This ship, the Ever Front, not to be confused
with the now-famous Ever Given was waiting for 13 days.
- Seeing vessels at anchorage
outside the nation's largest container port
does not happen every day
and it is a once in about a decade situation that we see.
- [Reporter] Ever Front was part
of a bottleneck in the supply chain
that's still straining the neighboring ports
which handle about a third of all U.S. imports.
- I don't think it's an exaggeration to say
that the ports have never really seen this confluence
of stresses that they've had to deal with.
- [Reporter] So what's causing this off shore queue?
How do these waiting ships impact customers onshore?
And when will it return to normal?
- I think we got here because we all had to stay home.
- [Reporter] Experts say if there's one cause
for the backup, it's COVID-19.
- Staying home leads you to go
all right, my desk isn't great if I've got one.
My chair isn't comfortable, even if I've got one.
I might need a new computer monitor.
I might need a webcam.
Actually, I can't go to the gym,
so I'm gonna go buy a Peloton
or a running machine or some dumbbells.
- [Reporter] For many Americans that has meant
placing online orders for those items,
most of which aren't made in the U.S.
Seaborne imports to the U.S. started surging
in the late summer as manufacturers and retailers
tried to rebuild inventories that were depleted by shoppers
in the early months of the pandemic.
- We had 57 extra ships arrive
in the fall above normal levels
which choked the system because at that same time
the goods movement system ashore, the terminals,
the trains, the trucks, the warehouses,
the forklift drivers had some fraction
of the workforce out with COVID
and a different fraction out because of contact tracing.
So just when there's more cargo,
there's a less efficient goods movement
in the system ashore, so the ships backed up.
- [Reporter] But shipments continued, peaking
in February when 177 container ships carrying
more than 800,000 containers arrived
at the Southern California ports.
That's 31% more ships and 49% more containers
than the same month last year.
This gap highlights a related issue.
The ships are getting bigger.
- There's been a significant increase in the number
of the very biggest boats that come in.
Whilst they're very efficient when they're at sea,
they're a devil to unpack and a devil to park
and so it takes longer to get all of them sorted out.
- [Reporter] So the ships continue to wait an average
of seven and a half days before reaching the port.
And that means consumers are waiting too.
- Okay. Peloton, let's go.
- [Reporter] This is something buyers
of Peloton bikes may already know.
The company said in its latest earnings report
that backups contributed to recent shipping delays.
- I'm sure you've seen that on a lot of e-commerce sites
it's taking things longer than normal to deliver to you.
And so, you know, there's
that kind of customer disappointment angle
and companies will then need to think
okay, how do I avoid that in the future.
- Peloton, come on, let's get this workout started.
- [Reporter] For Peloton, the answer has been to spend more.
The company said it would spend a hundred million dollars
in transportation, including air shipments,
in the first half of the year to get around
the bottlenecks at the port.
Mom-and-pop retailers also have products
they'd hoped to sell stuck on these ships.
Many of the smallest shops can't afford
to fly products in instead,
but the ships aren't the only issue here.
The entire supply chain, from ports to warehouses
to distribution centers, is inundated with cargo.
- So if the cargo is not moving quickly from the ship
to the shore, out through the warehouses, to the consumer,
everything else is gonna start to back up.
- [Reporter] This congestion, which was driven
by demand for shipping, also means
that the cost of shipping has gone up.
The current global average shipping rate is nearly
four times what it was in January, 2020,
according to data from S & P Global Platts.
- Someone's gonna pay for that.
It's either gonna come off company's profits
or they're gonna pass it through to consumers.
The longer it lasts, the more likely it is
that consumers are gonna pay it.
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- [Reporter] At the ports, workers are pushing
to get the anchored ships moving.
- Pre-pandemic, we were welcoming
on average 10 container vessels in to work at the port
loading and unloading containers every day.
During this surge we've been averaging 15 vessels
working every day in the port.
That's a 50% jump in productivity
alongside our vessels every day.
- [Reporter] Seroka says
the port's short-term strategy focuses
on vaccinating workers, maximizing efficiencies,
and asking importers to more quickly pick up cargo.
That, he predicts, will help clear the backlog
of ships by this summer.
Any longer could bring more problems.
- We have a short window here
before our traditional peak season kicks off
in August for back to school, other retail requirements,
and the all-important year-end holiday.
- [Reporter] With Americans receiving a fresh round
of stimulus, this bottleneck could intensify
and how states and the federal government proceed
with reopening may impact that.
- If we're gonna spend another summer locked down,
then people are gonna be buying, you know,
new lawn chairs and a whole bunch of stuff
they didn't buy last year.
If everything's open again and people can go on vacation,
it's all services spending, we're not gonna buy stuff.
So the demand for shipping will drop off relatively quickly.
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