ALL NEWS

$24 billion in goods is floating outside California’s biggest ports

Oct 25, 2021, 9:55 AM
SAN PEDRO, CALIFORNIA - OCTOBER 23: Aerial view of containers and ships at the Port of Los Angeles ...
SAN PEDRO, CALIFORNIA - OCTOBER 23: Aerial view of containers and ships at the Port of Los Angeles on October 23, 2021 in San Pedro, California. (Photo by Qian Weizhong/VCG via Getty Images)
(Photo by Qian Weizhong/VCG via Getty Images)

    (CNN) — Extreme port congestion has become a major nuisance that just won’t go away this year. Unfortunately, it could be one of the biggest problems of 2022, too.

Backlogs and elevated shipping costs are likely to persist “at least” through the middle of next year, Goldman Sachs warned clients in a note Monday.

“No immediate solution for the underlying supply-demand imbalances at US ports is available,” the bank’s economists concluded in the research report.

That’s bad news for the economy and for everyday Americans, because supply chain bottlenecks are raising costs, delaying shipments and leaving shoppers with fewer options.

Consumer prices are rising at the fastest 12-month pace since 2008. The amount of products that were out of stock online is up by 172% when compared with January 2020, according to Adobe Analytics.

The most glaring evidence of the supply-chain crisis: the dozens of container ships floating outside the Ports of Los Angeles and Long Beach just waiting to get offloaded. Goldman Sachs estimates there is a staggering $24 billion in goods sitting outside those two ports alone.

But once ships are able to dock and unload, shipping containers have still dwelled at the ports for days.

In September, about one-third of shipping containers at the ports of Los Angeles and Long Beach sat for more than five days after making it off the ship, Goldman Sachs found, compared with low-single digit percentages before the pandemic.

Earlier this month, the White House announced commitments from the Port of Los Angeles, unions and several major companies to move to 24/7 operations.

Goldman Sachs said the move “may help at the margin,” but also requires cooperation from other ports, truck drivers, rail operators and warehouses. And the biggest issue remains a shortage of workers, including truck drivers.

This is a broader problem beyond the California ports. Nationally, the time it takes loaded ships to make it through US ports has tripled from historical norms, Goldman Sachs found.

That’s why Goldman Sachs expects congestion at ports to ease just “slightly” in the coming months as the United States moves beyond the peak for shipping demand related to the holiday season.

As long as there are no “further shocks” to supply chains (such as Covid outbreaks and lockdowns), congestion should “ease more meaningfully” after the Chinese New Year in February, Goldman Sachs said.

“However, congestion will likely persist to some extent through at least the middle of next year, and our analysts expect that freight rates will likely remain meaningfully above pre-pandemic levels for at least the next year,” the report concluded.

Moody’s Analytics similarly warned last week that supply chain stress is intensifying and showing “no sign of subsiding just yet.”

Earlier this month, Transportation Secretary Pete Buttigieg told CNN that US supply chain problems will “certainly” continue into 2022.

The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Today’s Top Stories

All News

FrontRunner...
Elizabeth Weiler

UTA board looks at FrontRunner expansion in Utah County

Utah County is the fastest growing county in the state so UTA is considering a number of expansions to their current FrontRunner and bus lines. 
18 hours ago
Lehi City officials have closed a portion of westbound 1500 North to repair a large sinkhole. On it...
Simone Seikaly

Large sinkhole shuts down portion of westbound 1500 North in Lehi

Lehi City officials said the sinkhole formed on 1500 North due to a water leak.
18 hours ago
The Utah House has advanced the bill that bans transgender-related surgeries on minors and pauses t...
Lindsay Aerts

Utah House votes to pass transgender-related surgery ban

The Utah House has advanced the bill that bans transgender-related surgeries on minors and pauses the treatment of hormone blockers.
18 hours ago
Five former Memphis police officers who were fired for their actions during the arrest of Tyre Nich...
Eric Levenson, Melissa Alonso and Chris Boyette, CNN

Five former Memphis police officers indicted on charges of murder

The former officers were each charged with second-degree murder and aggravated assault among other charges.
18 hours ago
Shots were reportedly fired in the parking lot of Taylorsville High School on Thursday afternoon, l...
Simone Seikaly

Suspects in custody, lockdown lifted after shots fired at Taylorsville High

Shots were reportedly fired in the parking lot of Taylorsville High School on Thursday afternoon, leading to lockdown and lockout procedures.
18 hours ago
A herd of elk was crossing lanes of westbound I-80 in Salt Lake City on Thursday....
Elizabeth Weiler

Wildlife officials, troopers, maneuver large herd of elk away from I-80

The animals had moved down the mountain looking for food according to the Utah Division of Wildlife Resources.
18 hours ago

Sponsored Articles

Kid holding a cisco fish at winterfest...
Bear Lake Convention and Visitors Bureau

Get Ready for Fun at the 2023 Bear Lake Monster Winterfest

The Bear Lake Monster Winterfest is an annual weekend event jam-packed full of fun activities the whole family can enjoy. This year the event will be held from January 27-29 at the Utah Bear Lake State Park Marina and Sunrise Resort and Event Center in Garden City, Utah. 
happy friends with sparklers at christmas dinner...
Macey's

15 Easy Christmas Dinner Ideas

We’ve scoured the web for you and narrowed down a few of our favorite Christmas dinner ideas to make your planning easy. Choose from the dishes we’ve highlighted to plan your meal or start brainstorming your own meal plan a couple of weeks before to make sure you have time to shop and prepare.
Spicy Homemade Loaded Taters Tots...
Macey's

5 Game Day Snacks for the Whole Family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The Best Tools for Deaf and Hard-of-Hearing Workplace Success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
$24 billion in goods is floating outside California’s biggest ports