With long delays in California, Texas ports may be more attractive for cargo ships
From Texas Standard:
A logistics logjam at West coast ports could entice some cargo ship operators to unload their goods in Texas, rather than in California.
Most of the imports that come to the United States from across the Pacific Ocean are unloaded in California. But Americans changed their spending habits because of the pandemic, and are buying things at a record rate. That’s created long delays at ports such as Los Angeles’.
Jim Kruse is the director of the Center for Ports and Waterways at the Texas A&M Transportation Institute. He spoke with Texas Standard about what’s behind the backlog out west, and how it could affect Texas ports.
Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: Before we jump into the mechanics of managing cargo ship traffic, can you first catch us up on what's causing all this congestion in California ports and what's behind these long delays?
Jim Kruse: It is a very complex problem. It started back when we went into the lockdown because of COVID, and then people began to switch their buying habits. They went from paying for services and travel and so forth to buying stuff – things that could use at home, things they could play with. And so the nature of what was moving across the ocean changed. Much of what we're buying now comes directly from China. The ports in California that are receiving a lot of the commercial cargo are moving more cargo than they ever had before. We have too many things trying to get through too small of a space.
We have the ports that are jammed up because they have so much stuff on their docks that they can't get it out in time for the next ship to come in. We have warehouses that are full, and so they can't move the stuff from the port to the warehouse and on and on it goes. We have a shortage of drivers. We have a shortage of equipment. It's a mess all over the place.
Are other ports in the United States feeling the ripple effects from the slowdown out West?
Yes, they are, although not to the degree that you see in Los Angeles and Long Beach. I know Savannah's had a large number of vessels waiting offshore trying to get in, New York, New Jersey have experienced the same kind of thing. Other ports have seen it, but not the degree that we're seeing it in those ports.
How far in advance do these large container ships map out their itinerary? Would it be relatively simple to dock somewhere along the Gulf of Mexico instead of the Pacific Ocean?
Ocean transit is a very complex situation. There is a cost involved in going through the Panama Canal and coming to Texas or to the East Coast of the United States that you don't incur when you land in California. So the ocean lines are looking at this and they're saying “what would cost me less – to go and sit and wait in California or to move through the Panama Canal and go over to the Gulf and the East Coast?” And that equation is changing pretty dramatically now.
So if I understand you, before it would not have been cost-effective. But if you're sitting there for a few weeks, it might be worth trying that and heading to the Gulf of Mexico.
Exactly. The cost equation is changing because it costs a lot for these ships to sit around and do nothing. We're talking $20,000 to $100,000 a day for them to sit and do nothing. And so the numbers change pretty dramatically when you sit around and accomplished nothing. It's a desperate situation for a lot of people
And for consumers and shoppers looking ahead to the busy holiday season, what do you want them to know about that?
I don't have good news there. People saw this backlog developing, so they started ordering more stuff now than they would ordinarily order, because they want to make sure they don't run out. But all that did was clog up the system and put everybody back farther. So everything I'm seeing in the trade journals and in the people I’ve talked to indicate that we're going to see some shortages of desired Christmas products. This year is going to be a tough Christmas market. Some retailers may be able to get through it OK, but others may see some severe outages as they try to get through the holiday season.