Most of us have felt the effects of supply chain disruption during this pandemic. When we were building Mackay Laneway House this past winter, it was right when lumber prices were peaking. We had no choice but to just absorb the cost premiums and move forward with the job. On bigger projects with longer construction schedules, I know that a lot of us are trying to time what they can with the expectation that things will eventually sort themselves out.
When things are working as they should, this is the sort of thing that you can take for granted. But now you really need to consider lead times and cost premiums. I was reading this morning that the average number of wait days from anchorage to berth in a port in Los Angeles is now 13 days. What that means is that vessels are sitting out in the water, on average, for almost 2 weeks waiting a spot. This costs money.
As of last week, this translated into 79 container ships sitting in front of Los Angeles and Long Beach waiting to berth (see above chart). If you do the math, which Freight Waves tried to do over here, you get to a value of somewhere around $26 billion worth of stuff sitting out in the water. As I understand it, a big part of the problem is a lack of trucks and drivers to pick up the cargo once these ships have berthed. So you can run the ports 24/7, but you still have a bottleneck.
Logistics clearly matter.
Chart: American Shipper with data from Marine Exchange of Southern California, via Freight Waves
