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U.S. takes a hammering as freight delays continue on

As consumer demand continues to surge, warehouses, depots and ports across the U.S. are overflowing with cargo, causing major delays and escalating prices for already struggling businesses and consumers.

Earlier this year, California ports in Long Beach, Los Angeles and Auckland reported delays. Meanwhile, Union Pacific Railroad has stopped freight transport and BNSF Railway began weighing freight when the railroad moved to clear the Metro Chicago Railroad Yard of inaccessible containers.

One business owner, Wayne Kayler, owner of Way Interglobal, a distributor in Indiana, selling refrigerators, stoves and other appliances, had a shipping container holding dozens of electric fireplaces that went missing from May 4th to July 21st.

“It’s crazy,” Mr Kayler said. “Everything is GPS-tagged, but they lost it in the railroad yard.”

Ports on both coasts of the United States are buckling. Long Beach moved over 907,000 containers in May, which is the highest number since 1995. Whilst nine of the busiest ten months of the last quarter century have all occurred in the last twelve months. 

The port of Savannah, Georgia, has moved 5.3 million containers nationwide in the 12 months to June 30. This is a port record, 20% more than the previous year. 

“The global supply chain wasn’t built for this,” said Brian Bourke, Chief Growth Officer at Seko Logistics. “These were built to meet the seasonal surge in demand each year. With 12 peak seasons in all modes, things start to crumble.”

CH Robinson, a logistics company based in Minnesota, said over-orders are exacerbating the turmoil already existing within the shipping industry. Orders from China are 15 to 20 days late after arriving at a U.S. port, and some are used as temporary storage, resulting in up to a quarter of sea shipping containers, according to CH Robinson.

The turmoil is causing a ripple effect for consumers, as costs rise manufacturers have to increase their prices to make up the difference.  According to the US Bureau of Labor Statistics, US consumer prices rose 5.4% in June, the highest in 13 years after rising 5% in May.

A yearly $ 1.9 billion after-tax blow has been forewarned by Procter & Gamble, the company behind Tide’s detergent and Gillette razors, due to rising goods and fares.

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Source: California Times