New York (CNN Business) – Extreme port congestion has become a major nuisance that is not going away this year. Unfortunately, it could also be one of the biggest problems of 2022.
It is likely that traffic jams and high transport costs maritime companies will persist “at least” until the middle of next year, Goldman Sachs warned clients in a note on Monday.
“There is no immediate solution to the underlying imbalances between supply and demand in US ports,” the bank’s economists concluded in the research report.
This is bad news for the economy and for Americans, because bottlenecks in the supply chain are driving up costs, delaying shipments, and leaving shoppers with fewer options.
The consumer prices are increasing at the fastest rate in the last 12 months since 2008. The number of products out of stock online has increased 172% compared to January 2020, according to Adobe Analytics.
The most glaring proof of the supply chain crisis: the dozens of container ships floating off the ports of Los Angeles and Long Beach waiting to be unloaded. Goldman Sachs estimates that in those two ports alone there is $ 24 billion in merchandise.
But once the ships are able to dock and unload, the shipping containers continue to wait in ports for days.
In September, about a third of the containers from the ports of Los Angeles and Long Beach remained in port for more than five days after they got off the ship, according to Goldman Sachs, compared to single-digit percentages before the pandemic.
Earlier this month, the White House announced the commitment of the Port of Los Angeles, unions and several major companies to operate 24 hours a day.
Goldman Sachs said the move “may help on the margin,” but it also requires the cooperation of other ports, truckers, rail operators and warehouses. And the biggest problem remains a shortage of workers, including truckers.
This is a broader problem than the California ports. Nationally, the time it takes for loaded ships to pass through US ports has tripled from historical norms, according to Goldman Sachs.
That’s why Goldman Sachs expects port congestion to ease only “slightly” in the coming months as the United States surpasses the holiday season-related peak in shipping demand.
As long as there are no “more shocks” in supply chains (such as COVID-19 outbreaks and lockdowns), congestion should “ease more significantly” after the Chinese New Year in February, Goldman Sachs said.
“However, congestion is likely to persist to some extent at least until the middle of next year, and our analysts expect freight rates to remain significantly above pre-pandemic levels for at least the next year.” , concludes the report.
Moody’s Analytics also warned last week that supply chain tension is intensifying and shows “no sign of abating yet.”
Earlier this month, the Secretary of Transportation Pete Buttigieg told CNN that America’s supply chain problems will “no doubt” continue into 2022.
George is Digismak’s reported cum editor with 13 years of experience in Journalism