[Depth of the ring time] Shortage of drivers, insufficient capacity, and warehouse explosions... Look at the American supply chain crisis from the congestion of the big port: Falling down like a domino!
[Global Times Special Correspondent in the U.S. Zheng Ke, reporter Ni Hao] Editor’s note: Whether it’s the latest report from the Oxford Institute for Economic Research, a British think tank, or the chaotic conditions of the two major ports on the west coast of the United States-Los Angeles and Long Beach in California, both It is reminding the Biden administration that the supply chain crisis in the United States is still intensifying.
The Port of Los Angeles and the Port of Long Beach are the two most important ports in the United States. At least 1/4 of the cargo entering the United States needs to be handled by these two ports.
However, since the beginning of this year, the number of ships stagnating in these two ports has continued to increase. In order to allow more ships to unload, the newly unloaded containers were squeezed aside by new containers before they could be counted. The messy storage yard was seen. Going up is like Tetris without code.
Due to the continuing impact of the new crown epidemic and the approach of Christmas, the U.S. commodity supply chain is encountering unprecedented challenges, and systemic problems have caused all links in the supply chain to fall down like dominoes.
In order to solve the imminent problem, the Biden administration has begun to use drastic drugs, but with little effect.
On September 22, local time, the ports of California, Los Angeles and Long Beach set a record of congestion, and many cargo ships lined up for passage.
Nowhere to put containers and empty shelves
According to Gene Celoka, executive director of the Port of Los Angeles, the port handles more than 800,000 standard containers every month, and in September this year, it handled a record-breaking nearly 900,000 standard containers.
Even so, the congestion on the sea has not improved. Some cargo ships have been waiting for as long as 14 days to unload, which is almost equivalent to the time it takes for ships to cross the entire Pacific Ocean from Asia to North America.
Port of Los Angeles spokesman Philip St. Feld said that before the outbreak, there were no ships that could not dock at all.
The U.S. Coast Guard warned that with the arrival of winter storms, ships waiting at sea will face great danger and must be anchored close to the port to ensure that they can survive the storm safely.
In order to speed up the port unloading speed, the Biden government in mid-October required the Port of Los Angeles and Long Beach to operate 24 hours a day, 7 days a week, but even so, many unloaded containers were still unloaded.
The reasons are that the ports do not handle the goods in time, the serious shortage of freight trucks and drivers, the insufficient railway transportation capacity, the general warehouse explosion of goods, and the delayed delivery of goods by the merchants.
Even if the Biden administration stated that those shipping companies that detain containers at the terminal will be fined US$100 per container per day, the shipping company still has no way to change the status quo. After all, the shipping company cannot do all the steps after the container is disembarked. solved problem.
In addition, the soaring freight cost during the epidemic has also exacerbated the difficulty of transnational transportation.
The New York Times recently reported that it would cost about US$2,000 to transport a container from Shanghai to Los Angeles before the epidemic, but now it needs at least more than US$20,000.
Large chain retailers such as Target and Wal-Mart have to wait weeks or even months before they can get their ordered items on the ship.
As a result, the shelves of American stores are often empty, especially consumables such as various office supplies, children and holiday supplies are seriously out of stock.
On online e-commerce platforms, many products have to wait at least one month for the arrival time.
Due to the congestion in California's ports, many cargo ships heading to the west coast of the United States went north to Seattle or Tacoma to unload their cargo.
The Port of Seattle, which has never seen a ship jam in the past, now takes two to three days to complete unloading.
Cardiro, a truck driver who often goes to the Port of Seattle to pick up goods, told the Global Times reporter that due to port scheduling problems, many trucks cannot enter the port to pick up the goods, causing them to be complained by customers for delays in delivery.
"U.S. port congestion has become a major constraint to the recovery of the U.S. economy, and the main artery of the U.S. economy has been constrained by it." Zhong Zhechao, founder and CEO of One Shipping, told the Global Times reporter that the U.S.'s dependence on imports is not only reflected in people's livelihoods. , The US manufacturing industry also needs to purchase a large number of parts and components from the world.
If the supply chain is broken, the prices of daily necessities in the United States will continue to rise, pushing up inflation.
U.S. manufacturing will also be trapped by a shortage of parts.
He believes that the economic growth of the United States in the third quarter has unexpectedly slowed down sharply. If the supply chain is broken, it will make the US economy worse.
"There are problems in every link"
Bill Simon, former chairman and CEO of Wal-Mart, said that the supply chain in the United States has always been "walking on the edge of a razor," and it is not a simple problem that can be solved by a single policy.
Simon's remarks came when more than 80 members of the House of Representatives asked US Secretary of Transportation Pete Buttigieg to implement a plan to allow truck drivers under 21 to cross state boundaries.
Republican Representative Dusty Johnson said that the pilot program can add 3,000 drivers to the lack of manpower in the trucking industry, and the current shortage of truck drivers in the United States has reached about 80,000.
Biden even said a few days ago that if the driver shortage continues, he will consider calling in the National Guard to drive trucks to share logistics work.
As a key but often overlooked link in the supply chain, truck transportation is becoming a stubborn bottleneck in the chaos of the backlog of goods.
Trucking accounts for 70% of American freight, but many fleets cannot hire enough drivers to meet the growing consumer demand.
The surge in cargo caused the loading and unloading docks and port terminals to wrestle with each other, destroying the scarce trucking capacity and making the work of drivers more difficult.
Factories and warehouses also lack personnel to load and receive goods.
At the same time, there is a serious shortage of the most important trailer floor in truck transportation, so that there is no way to transport goods if there are vehicles.
The analysis believes that this has a lot to do with the US's trade war and the levy of heavy taxes on China, the main supplier of trailer bottom plates.
The director of the Center for Transportation and Logistics at the Massachusetts Institute of Technology, Yossi Sheffey, bluntly stated that the Biden administration’s fiscal stimulus policies in response to the epidemic, the impact of the epidemic on the global supply chain, and the aging of the US logistics infrastructure have all contributed to the current supply. Chain crisis.
Bloomberg recently published an article that American ports are rare in the world that have not achieved automation, and the dockers’ union that resists automation is the main resistance.
The article believes that trade unions are very effective in promoting the interests of their members, but these interests are at the expense of other workers and the public's interests-because they cannot realize automated operations, U.S. ports have experienced serious problems before the recent expansion of capacity pressures. Delay in turnover.
In addition, there is another fundamental reason for the collapse of the US supply chain-a surge in demand.
Due to the impact of the epidemic, home office has promoted the sale of a large number of office equipment and various fitness equipment, and even American seniors who have never used online shopping before have begun to accept and "indulge" in this shopping method.
In addition, activities such as dining out and long-distance travel have been reduced due to the epidemic. The extra cash issued by the US government for the epidemic has also been invested by some people in the renovation of home improvement and the purchase of groceries, clothing and other daily consumer goods.
However, whether it is office supplies or daily department stores, the parts and components needed for the manufacture or assembly of these products need to be imported by the United States from overseas.
In the face of huge demand, merchants have begun to increase their orders from overseas suppliers, and the shortage of goods has further stimulated the merchant's mentality to stock up in advance.
As Christmas is approaching at the end of the year, American consumers are worried about rising prices and believe that the sooner they stock up, the better.
These have put continuous pressure on the supply chain from the source.
Zhong Zhechao told the "Global Times" reporter that the severity of the congestion in the U.S. ports has greatly exceeded the industry's expectations, and the superposition of multiple factors eventually became a chronic disease.
He believes that various factors such as labor shortages, inefficient terminal operations, chaotic digital systems, and inefficient management measures are mixed together, which eventually ignited the US supply chain crisis.
Zhong Zhechao said that the Biden administration has actually recognized the seriousness of the situation and has taken a series of measures to deal with the crisis, such as setting up a supply chain trade action group, convening representatives of transportation companies, retail giants, and dockworkers unions to discuss issues at the G20 summit. During the period, the "Global Supply Chain Resilience Summit" was organized and so on.
But at present, these measures are not effective, because the blockage of US ports is a problem in every link, forming a vicious circle.
The Biden government adopts a policy of imposing detention fees on ships, which is regarded by the industry as a potent medicine. If the fines caused by the failure to unload the cargo in time even exceed the value of the cargo on board, the ship owner is likely to abandon the cargo and leave the problem. To solve it, it will aggravate port congestion.
Why is it hard to get results after using "strong medicine"?
Lu Xiang, a researcher at the Institute of American Studies of the Chinese Academy of Social Sciences, told the Global Times: "The globalization pattern was basically formed in the 1990s. After 30 years of development, the world economy has formed a very wide and comprehensive range from production, transportation to distribution of goods. The interlinked network, the supply chain is becoming more mature and stable. On the other hand, the complexity of the global supply chain makes its operation extremely fragile, and local problems and clogging will affect the overall operation." He believes that it has always been relatively Sudden problems with the smooth supply chain failed to attract the attention of the U.S. government in a short period of time. When the problems were serious enough to affect the macro economy, they rushed to deal with them, but they have accumulated too many to return.
Therefore, although the White House has coordinated all parties to accelerate the resolution of the supply chain crisis, all walks of life in the United States are not optimistic that the crisis can be resolved quickly, and some even predict that port congestion will continue until the middle of next year.
The New York Times commented that if the epidemic continues and the contradiction between supply and demand cannot be alleviated, it will be difficult for the United States and even the world to find exports if the supply chain is out of control.
Faced with a problem that the government can’t solve, Ryan Peterson, CEO of Flexport, a San Francisco logistics and transportation company, suggested that the Port of Long Beach should allow higher-tier containers or ask the National Guard to help unload the cargo.
Some large retailers have also begun to rent trucks from moving companies to transport goods.
Joyce, who runs Amazon's third-party customer warehouse in Seattle, told the Global Times that their warehouse was originally used to process buyer returns, but now it is completely used as a warehouse for storing sellers' products.
But even so, there are still large quantities of goods that cannot be brought in, and freight drivers often have to stack the goods at the door of the warehouse.
Mario Cordero, executive director of the Port of Long Beach, said that if we do not implement "24/7" operations at every link of the entire supply chain, it will be impossible to efficiently move so many goods.
However, the "labor shortage" in the United States caused by the epidemic will not get better in the short term.
According to data from the US Department of Labor, more than 4 million people have voluntarily chosen to be unemployed at this stage due to the wave of strikes advocated by labor unions.
In addition, although the government has stopped large-scale epidemic subsidies, many blue-collar workers are still on the sidelines.
According to US media analysis, the income of ordinary American workers has hardly increased significantly in the past 40 years, and continued inflation is increasing the pressure on low-income families.
In the current situation of strong labor demand, they are more willing to choose jobs such as local transportation business, construction engineering, and manufacturing that have "less work intensity and fewer restrictions" relative to long-distance transportation.
Lu Xiang told the Global Times reporter: “Before the epidemic, the United States had relatively sufficient employment. An important goal of the Biden administration to stimulate the economy is to solve the employment problem, but we have seen some incredible situations. On the one hand, the employment data is not good, but On the other hand, many workers are unwilling to work with government relief funds."
Should learn from China how to manage ports
Zhong Zhechao told the "Global Times" reporter that on "Double Eleven" last year, China processed as many as 675 million express mails in one day. This is a concept of quanta. "Behind this figure is China's advanced and complete infrastructure and complex and efficient data. The processing system, of course, and the diligence and competence of the Chinese."
He said that in terms of port transportation, China's infrastructure and logistics systems are also the most complete and leading in the world.
Take the ports of Shenzhen and Ningbo as examples. As China's major trading ports, they are still expanding and continuously introducing advanced data management systems.
In contrast, the US infrastructure is relatively backward, and there is no incentive for expansion. During the special period of the epidemic, the problem of ship jams and port congestion has become more and more serious, coupled with the inability to deal with it, and it has gradually evolved into a crisis.
In Lu Xiang's view, the American industry generally tends to be conservative and unwilling to update technology on top of the original facilities.
U.S. ports have not even adopted more advanced communication data management systems like China, and lack the awareness of industrial Internet.
Therefore, the U.S. investment in port infrastructure is far from sufficient.
Lu Xiang said: “In terms of warehousing and distribution, China has formed the world’s largest, complex and efficient network due to years of e-commerce promotion. These are much more advanced than the United States. China not only leads the world in port hardware facilities, but also manages It is also unique in system and management experience. If the United States needs it, China can even send skilled and experienced managers to assist the United States in resolving port issues."
According to data released by the General Administration of Customs, Sino-US trade is still rising rapidly this year.
In this regard, Zhong Zhechao believes that for some Chinese companies, there are good and bad news behind this.
The U.S. originally purchased globally but was affected by the epidemic. For example, the production capacity of Southeast Asian countries has shrunk. The U.S. and Europe have to transfer some import sources to China. However, this part of imports will gradually disappear due to the epidemic in Southeast Asia, India and other places under control and production capacity recovery in the future. .
After the epidemic, the trend of decentralized industrial chains in European and American countries will bring greater uncertainty and risks to China's exports. This requires the government or competent authorities to adjust the investment layout and capacity expansion of enterprises at a macro level.
Zhong Zhechao also reminded that many daily necessities exported by China to the United States have low added value and meager profits.
At present, the freight rate from China to the US West port has dropped sharply from the peak, but it is still at a historical high level, which is still unbearable for some small and medium-sized enterprises. The high freight rate has formed a relatively obvious negative impact on China's low-end manufacturing industry.
This requires the competent authorities to actively guide these companies to return to the domestic market and find room for development in the dual cycle.