Port of Los Angeles Struggles with the Domino Effect of Congested Ports
Due to global supply chain issues caused by COVID-19, the Port of Los Angeles is becoming congested. Cargo volume was up 50% in the second half of 2020 in comparison to the first half. It has become common for loaded ships to wait and be anchored at sea until a dock opens up for unloading.
The port is strained and according to executive director Gene Seroka, „we are shipping back two times the amount of empty boxes than we are American exports across our docks“. It is said that the increase in volume is due to the change in the American consumer behavior and that during the pandemic, people were not buying services, but buying more goods instead.
Volume at the Port of Los Angeles is expected to be up an average of 88% YoY in the first two weeks of 2021, a sign that swelling imports have yet to let up. But labor shortages due to the pandemic, chassis shortages in Southern California and delayed vessel arrival contributes further to the ongoing congestion. The increased volume without increased capacity creates a bottleneck that cannot be easily resolved. The congestion at the ports has also disrupted trucking operations as turn times for trucks have increased by 33% from June to September. The number of trucks needing over two hours to complete the turn has steadily increased, which is impacting the overall productivity at the ports.
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Supply chains struggling to procure nitrile gloves after manufacturer shutdown
Nitrile gloves are the latest personal protective equipment item that is challenging supply chains as the Coronavirus pandemic stretches into another calendar year. The gloves are used across industries from the preparation of food to administering vaccines.
The second-most sought after item reported by the Thomas Index Report in Q4 were Nitrile gloves. The gloves have been in particularly short supply since major Malaysian manufacturer Top Glove closed 28 factories in late November after an outbreak of COVID-19 among employees.
The pandemic is challenging procurement professionals to deviate from their normal processes to prioritize PPE purchasing. „Despite the widespread scarcity of certain products and well-documented supply chain issues, we’ve been successful in this effort across a wide range of items. Nitrile gloves have proven to be more challenging.“ said CEO of MSC Industrial, Erik Gershwind.
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Ford and Nissan to cut vehicle production due to chip shortage
Ford and Nissan are scaling back production in response to semiconductor shortages. Ford is idling an SUV factory in Louisville, Kentucky, moving up downtime that had been scheduled for later this year. Nissan is reducing output at its Oppama plant in Japan, with the possibility of other brands facing trouble as well.
Volkswagen said in December that it was altering production in China, Europe and North America due to the chip shortage. Fiat Chrysler and Toyota have also discussed production issues. The shortage surfaced in late 2020 due to demand for cars spiking following pandemic-related factory shutdowns for two months. These issues seem difficult to avoid at a time when both car production and the demand are unstable.
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Have a nice weekend.