The Institute for Supply Management will release their latest index on supply to the service sectors this morning. This is for August. In July’s survey, workers across industries expressed frustration about shipping delays. But now – yes, already – we’re in peak holiday shipping season.
For residents near the port of Los Angeles, holiday shipping season is something you notice usually at the end of summer.
“I can see it right out my window and today we have 18 container ships in port,” said Gene Seroka, executive director of the port of L.A.
He recently had a peak of 44 container ships waiting outside the breakwater to get into the port, there just isn’t enough space to put the stuff that they’re carrying.
“Our two billion square feet from the shores of the pacific to the desert region are overflowing with cargo,” he said.
Some importers anticipated backlogs, and to avoid them, got the holiday shipping season started early in July.
Oliver McCrum is a wine importer. His business started stocking up on inventory in February, and they still ran into problems.
“There was a gap when we got almost nothing for at least about two months I would say. And then we’ve just recently had a flow of merchandise come in,” he said.
McCrum works out of ports in the Bay Area, but has encountered the same warehousing issues going on in L.A., and has made some compromises.
“We were receiving some merchandise in New York and then shipping it across country using refrigerated containers. That was more expensive but it was clearly necessary,” he said.
And the backlogs aren’t just about wine and toys and other gifts for the holidays.
Tom Derry, CEO of the Institute for Supply Management, said there are materials on ships that other sectors need.
“We’re talking about hospitality, higher education, we talked about the health care sector and everything they’re trying to move through,” he said.
Derry adds that the rush for holiday goods puts pressure on those industries too.
“They consume a lot of goods and services in order to deliver services,” he said.
Derry said we’re now seeing the crest of the wave at the ports, but those delays will keep moving through the system to rail yards, warehouses, and potentially to consumers.
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