Photos show 21 cargo ships stuck off the coast of Los Angeles contributing to the supply-chain crisis

Port of Long Beach/Los Angeles
  • On April 16, 21 ships were anchored off the coast of California, waiting to be berthed.
  • Photos show the Port of Long Beach and Los Angeles backlogged with these container ships.
  • This congestion is just one part of the global supply-chain crisis that’s been impacting companies and consumers.
  • See more stories on Insider’s business page.
On April 16, 21 container ships could be seen anchored off the coast of Los Angeles, stuck while they waited to berth, according to the Marine Exchange of Southern California.

Port of Los Angeles Long Beach supply chain

Source: Marine Exchangeof Southern California

This sight is nothing new for locals: views of the ocean from coastal Southern Californian cities have been obstructed by this long line of container ships for a few months now.

Port of Los Angeles Long Beach supply chain

About one-third of the country’s imports – primarily from China – pass through the Ports of Los Angeles and Long Beach.

Port of Los Angeles Long Beach supply chain

Source: Insider

But for the last several months, these side-by-side ports have been jammed, further fueling the global supply-chain crisis.

Port of Los Angeles Long Beach supply chain

The almost two dozen ships stuck off the coast of Southern California are a glaring sight to see.

Port of Los Angeles Long Beach supply chain

The cluster can be seen from almost every vantage point near the two ports, including neighborhoods …

Port of Los Angeles Long Beach supply chain

… viewpoints …

Port of Los Angeles Long Beach supply chain

… popular local hotspots …

Port of Los Angeles Long Beach supply chain

… and piers.

Port of Los Angeles Long Beach supply chain

The ports typically see up to one container ship at anchor, if that, Kip Louttit, executive director of the Marine Exchange of Southern California, told Insider’s Grace Kay.

Port of Los Angeles Long Beach supply chain

Source: Insider

However, the Southern Californian ports have been seeing well over just one anchored container ship.

Port of Los Angeles Long Beach supply chain

On February 1, a whopping 40 container ships were stuck off the coast of California.

Port of Los Angeles Long Beach supply chain

Source: Marine Exchange of Southern California

A month later on March 1, the Marine Exchange reported 30 anchored ships yet to be berthed.

Port of Los Angeles Long Beach supply chain

Source: Marine Exchange of Southern California

Last month was also the Port of Los Angeles’ “strongest” March in its 114 years of operation, according to a news release from the port.

Last month was also the Port of Los Angeles' strongest March in its 114 years, according to a news release from the port.

Source: Port of Los Angeles

Some of these container ships have been stuck off the Golden State’s coast for several weeks now …

Port of Los Angeles Long Beach supply chain

… hanging onto a wide variety of imports, from furniture to clothes to plastics.

Port of Los Angeles Long Beach supply chain

Source: Port of Los Angeles

It doesn’t help that half of the ships are considered “mega-container ships,” or ships that can hold 10,000 “Twenty-foot Equivalent Units” (TEUs).

Port of Los Angeles Long Beach supply chain

The size of these boats – which are two to three times the size of ships from over a decade ago – are also a contributing factor to this backlog as they use more resources and manpower to unload, according to Louttit.

Port of Los Angeles Long Beach supply chain

Another contributing factor to this delay is, unsurprisingly, the COVID-19 pandemic.

Port of Los Angeles Long Beach supply chain

“As more Americans get vaccinated, businesses reopen and the economy strengthens, consumers continue to purchase goods at a dizzying pace,” Gene Seroka, the executive director of the Port of Los Angeles, said in a news release.

Port of Los Angeles Long Beach supply chain

This has caused the number of imports to increase, adding more ships to the congested waters.

Port of Los Angeles Long Beach supply chain

This congestion may be unique to California waters, but consumers around the US could soon begin seeing the consequences of this backlog.

IMG_0174 2 skitchy

This problem is more than just a temporary depletion of imported goods and a blocked view of the Pacific Ocean.

Port of Los Angeles Long Beach supply chain

There’s also a massive shortage of shipping containers, which has already been contributing to the global supply chain and shipping delay issues.

Port of Los Angeles Long Beach supply chain

Source: Insider

Companies like Costco, La-Z-Boy, and Nike have already been affected by these global problems, and have reported issues like inventory shortages and delayed product deliveries.

Port of Los Angeles Long Beach supply chain

Source: Insider, The Washington Post, Supply Chain Dive

This means consumers around the US could begin seeing increased prices, decreased product offerings, and longer delivery times.

Port of Los Angeles Long Beach supply chain
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The operators of the Ever Given may be forced to unload its 18,000 cargo containers onto other ships, report says

ever given suez canal
The Ever Given, a Panama-flagged cargo ship, is seen in the Suez Canal in Egypt, on March 27, 2021.

  • The operators of the Ever Given might move its containers onto other ships, according to a report.
  • The ship is unable to deliver its goods until $1 billion in damages is paid to Egyptian authorities.
  • But transporting the containers could become a physical, legal, and logistical nightmare.
  • See more stories on Insider’s business page.

The operators of the Ever Given ship are exploring the possibility of transferring its 18,000 cargo-filled containers to other vessels as it remains stuck in legal limbo, according to a report by the Wall Street Journal.

The 224,000-ton cargo ship, which ran aground in the Suez Canal on March 23 and was freed 6 days later, still hasn’t been able to leave the Suez Canal after Egyptian authorities announced it must first pay $1 billion in damages.

But the ship’s operator, Taiwanese company Evergreen Marine Corp., is facing increasing pressure to deliver its thousands of containers – filled with everything from toilet paper to coffee and furniture – to its frustrated customers.

Read more: The 4 biggest losers of the Suez Canal fiasco – and 4 surprising winners

“Customers are asking when their boxes will be delivered after the ship seizure, and the prospect of moving the containers to other ships and delivering them to the clients in Europe is now on the table,” an unnamed source, directly involved in the matter, told the Wall Street Journal.

But any efforts to remove the 18,000, 20-foot container units from the Ever Given could become a massive physical and logistical challenge, possibly requiring officials to move the vessel, which is currently anchored in the canal’s artificial Great Bitter Lake, to the nearby city of Port Said.

“It won’t be easy to do, but there are a number of options,” the same source told Wall Street Journal. “Empty ships can be deployed to pick up boxes and some can be loaded to other container ships crossing on the same route to Europe.”

The move could also create additional legal headaches, relating mainly to claims and fees surrounding the vessel and its cargo customers.

According to the Wall Street Journal, Evergreen Marine Corp. said in a statement that it is looking into the Egyptian court order “and studying the possibility of the vessel and the cargo on board being treated separately.”

Shoei Kisen Kaisha, the ship’s owner, earlier this month filed a general-average claim against the vessel’s operators, which calls for companies with cargo on the vessel to share the risk and costs involved in the ship’s recovery.

Two maritime lawyers, Bruce Paulsen and Brian Maloney of Seward & Kissel told the Maritime Executive this week: “The seizure of the Ever Given and compensation demand for salvage and other expenses by Egypt’s canal authority escalates the complexity and cost for the numerous cargo owners with property in transit aboard the vessel.”

“Barring a settlement, those cargo owners now face additional expense and delay while the vessel’s arrest is maintained,” they added.

The ship was sailing from Asia to Europe when it got stuck in the channel, causing severe delivery delays and an epic traffic jam of roughly 400 other ships, which have since started passing through the canal again.

Evergreen hasn’t identified the customers whose shipments are on the Ever Given, although some companies, including IKEA and Germany-based supermarket ALDI, have already said they’ve been impacted.

Read the original article on Business Insider

Egypt’s president orders preparations be made to unload Ever Given’s cargo if refloating fails, a high risk strategy adding days of delay

suez canal ever given cargo
A handout picture released by the Suez Canal Authority on March 25, 2021 shows an Egyptian tug boat equiped with a rope trying to free Taiwan-owned cargo MV Ever Given.

  • Egypt’s President has ordered preparations be made to unload the cargo of the Ever Given ship.
  • He outlined the plans to the Suez Canal Authority on Sunday morning, local media reported.
  • Unloading the cargo risks unbalancing and damaging the ship, an expert warned.
  • See more stories on Insider’s business page.

Egypt’s president has ordered preparations be made to unload the cargo of the Ever Given ship if refloating fails, according to local media reports.

President Abdel Fattah Al-Sisi outlined the plan to the Suez Canal Authority on Sunday morning, Daily News Egypt reported.

Efforts are currently underway to refloat the ship. The floatation efforts included towing and pushing the grounding vessel using 8 large tugboats, the Suez Canal Authority said.

Authorities are also working to dig the Ever Given out of the sand, The Wall Street Journal reported. Dredgers have shifted 27,000 cubic meters of sand to a depth of 18 meters, Arab News said.

But plans are in place to unload the cargo of the massive ship if these efforts fail, CGTN Africa reported.

Helicopters would most likely need to be used to lighten the Ever Given’s load, The Wall Street Journal reported. This is because there are no cranes in the vicinity that are tall enough to reach the top of the stacked containers, the paper said.

The process could unbalance and damage the ship, BBC News reported. “Worst case scenario is that she breaks in half because of [uneven] weight distributions,” Sal Mercogliano, an expert in maritime history, told the BBC.

It is likely that an effort to remove cargo boxes from the ship would take several days, Bloomberg reported. The Ever Given carries a load of 20,000 containers.

The Ever Given ship has caused a blockage in the Suez Canal since Tuesday morning.

The incident is costing the global economy billions and has caused hundreds of vessels to become stranded.

Read the original article on Business Insider

Egyptian authorities say ‘human error’ may be to blame for the Suez Canal Ever Given crash after initially attributing it to strong wind

ever given ship jam suez
MARCH 26, 2021: Maxar’s WorldView-2 collected new high-resolution satellite imagery of the Suez canal and the container ship (EVER GIVEN) that remains stuck in the canal north of the city of Suez, Egypt.

  • Officials initially blamed the giant Ever Given container ship running aground on weather conditions.
  • The Suez Canal Authority chief initially said “strong winds and a dust storm” had caused the blockage.
  • He has now raised the possibility of “technical or human error” as being to blame.
  • See more stories on Insider’s business page.

Egyptian authorities suggest the Ever Given ship running aground on Tuesday morning could be due to “human error,” according to MailOnline.

It is a revision of initial claims that blamed environmental factors for the epic Suez Canal jam. Officials initially said that the 1,300-foot-long cargo ship became stuck due to troublesome weather conditions.

Read more: When America’s busiest port is log-jammed, the US economy suffers – but these 22 companies thrive

Lieutenant-General Osama Rabie, chair of the Suez Canal Authority (SCA), said on Tuesday that it probably happened due to “strong winds and a dust storm that obstructed the view,” according to the Egyptian newspaper Al-Masry Al-Youm.

But Rabie has since gone back on this assessment. “Strong winds and weather factors were not the main reason,” the SCA chief said on Saturday.

The incident that prompted a global trade blockage may have been caused by “technical or human errors,” he said, the MailOnline reported.

Moments before it ran aground, the Ever Given was apparently traveling faster than a speed limit set by the Suez Canal Authority, Bloomberg reported.

The Ever Given’s last recorded speed was 13.5 knots, logged 12 minutes before it grounded, according to Bloomberg, which cited its own data. The maximum allowed speed through the canal was between 7.6 knots and 8.6 knots, the report said.

The Japan Times also reported the ship was traveling 13.5 knots, adding that two canal pilots were on board when the ship hit land.

The Ever Given didn’t have a tugboat escort through the canal, according to Bloomberg. The two ships immediately ahead of it reportedly had escorts, although such escorts were not required.

One ship captain unaffiliated with the grounding spoke with Bloomberg. Chris Cillard, the captain, told the outlet ships sometimes speed up to better control their vessels during wind storms. “Speeding up to a certain point is effective,” he said.

The massive container ship is still wedged in the Suez Canal, over five days since it first became lodged.

Workers have made a “significant process” in freeing up the canal and have managed to release the ship’s rudder from the sediment, Insider’s Michelle Mark reported.

The Ever Given’s Suez Canal blockage costs an estimated $400 million per hour, Insider’s Kelsey Vlamis reported.

Rabie said during a Saturday press conference that he couldn’t speculate on when the ship will be re-floated.

Read the original article on Business Insider

It could take weeks to dislodge the ship stuck in the Suez Canal, straining a vital supply chain route

Suez canal ever given
The Ever Given, trapped in the Suez Canal, Egypt, as of Thursday March 25 2021.

  • One of the world’s biggest container ships ran aground in the Suez Canal Tuesday.
  • The blockage has pinned in hundreds of other cargo ship in transit.
  • An expert involved in clearing the canal said it could take weeks before the waterway opens again.
  • See more stories on Insider’s business page.

A massive container ship has been blocking the Suez Canal, a major global shipping route, for over two days now and experts say it might not be moving any time soon.

The Ever Given, one of the biggest container ships in the world, ran aground on Tuesday morning, blocking all other major vessels from passing through the heavily-trafficked waterway.

The CEO of Boskalis Peter Berdowski, a Dutch company that is helping to address the blockage, said there are a lot of unknowns as to when the waterway will be cleared – making the timeline for its removal nearly impossible to predict.

“We can’t exclude it might take weeks, depending on the situation, Berdowski said on Dutch Television, according to Reuters.

The ship is currently stuck at a near-right angle to the Egyptian canal that connects Europe and Asia. Part of the hulking 224,000-ton freighter had embedded itself in the bank of the canal, blocking hundreds of cargo ships that now face a decision to wait or find an alternate route. Reuters reported that diverted ships would likely be forced to go around Africa – another 15,000 miles farther.

Everything from consumer products to machinery parts to oil flows through the 120-mile passage. Nearly 19,000 ships passed through the canal during 2020, for an average of about 52 ships per day, according to the Suez Canal Authority.

Since Wednesday night, dredgers have been working to free the ship so that it can be refloated and tugboats have been attached to the vessel to try and shift its weight, according to a statement from the ship’s technical manager Bernhard Schulte Shipmanagement.

Suez canal ever given
The Ever Given, trapped in the Suez Canal, Egypt, as of Thursday March 25 2021.

Wind conditions, as well as the sheer size of the vessel, have made relocating the Ever Given increasingly difficult, according to a statement from the shipping company responsible for the vessel.

The Suez Canal blockage is just one of many mishaps to befall the global supply chain in the past few months. Prices of goods are expected to continue to rise as delays in key California ports, computer chip shortages and the Texas freeze complicate an already precarious post-pandemic supply chain.

An economist at Chartered Institute of Procurement and Supply, John Glen, said the blockage could add 10 days to UK delivery times.

“This may seem like a small problem in a country far away, but the Suez Canal has always been an important logistics route for the world’s supply chains and the blockage will likely have serious repercussions if it continues much longer,” Glen said.

Read the original article on Business Insider

Your morning coffee is about to get more expensive

coffee shortage
There’s a coffee shortage.

When it rains, it pours, and when there’s a drought, prices go up.

In this case, the drought is in Brazil and it has the US running low on coffee. That means your morning cup of joe is about to get more expensive.

The drought has decreased crop production just as congested shipping ports have caused US coffee stockpiles to hit the lowest they’ve been in six years, Bloomberg reported. So far, roasters have been relying on their inventories instead of hiking prices, but that will only last so long and wholesale prices have climbed.

Potential losses from the drought could affect half of Brazil’s coffee crops next year, soft commodities expert Judith Ganes told Reuters in December. She said it was hard to determine how badly Brazil’s Arabica beans were hit, but “there will be major failure,” she said. “I saw areas with 100% losses, 50% losses, 30% losses.”

Arabica-coffee futures in New York have increased by nearly a quarter since the end of October, per Bloomberg. And Marex Spectron recently upgraded its global coffee deficit forecast from 8 million bags to 10.7 million bags, citing the drought.

Logistic problems have only compounded the shortage brought on by declining crops. Some facilities in Dinamo, Brazil, told Bloomberg don’t have enough containers to ship out coffee. Some containers and charter vessels aren’t currently available, causing back ups and delays at shipping ports.

David Rennie, head of Nestle’s coffee brands, told Bloomberg it could take two to three years for take-away coffee to return to pre-Covid levels.

But coffee isn’t the only goods shortage hitting the global economy as it reopens this year.

US shipping ports have become unusually congested as imports pick up speed due to surging and unpredictable consumer demand, delaying shipments of all types, from sneakers to meat. Companies struggled to estimate demand correctly, partly explaining the pileup, while factory production was halted off and on during the work-from-home economy of 2020.

The shortage is particularly acute in certain spaces, such as in the semiconductor chips needed to make personal electronics and products with electronic components such as cars. Finally, February’s Texas Freeze suspended much of the US oil sector and the manufacturers who rely on it, making gas harder to come by and things refineries produce, like plastics, more expensive.

That’s not to mention the shortage of things like bikes, fitness equipment, and even lumber, the latter of which has added to already high housing prices. As supply dwindles, all of these things become things Americans could end up paying more for.

But you know what they say, when it rains, it pours.

Read the original article on Business Insider