Severely Congested Global Logistics Network... 6 Months for Hyundai Motor Ship Arrival

Labor Shortage Deepens in Shipping, Ports, and Trucking
3-Week Wait for Vessel Entry at LA Port
US Costco Unable to Find Truck Drivers
Sales Quantity Limits on Kitchen Towels and More

[Asia Economy Reporter Yujin Cho] As the COVID-19 economic recovery leads to a surge in export and import volumes, logistics disruptions are spreading worldwide due to partial shutdowns at major ports in the United States and Europe. This is resulting in increased burdens on companies and consumers. In Romania, it takes six months to receive a Hyundai Avante (export name Elantra), and in the U.S., Christmas tree prices have jumped by 25%.

According to the Wall Street Journal (WSJ) and Bloomberg News on the 26th (local time), more than 60 ships are currently lined up waiting to dock at the Los Angeles (LA) and Long Beach ports, which are representative ports on the U.S. West Coast. Ships unable to dock have been stuck waiting in international waters for about three weeks, while tens of thousands of empty containers that have been unloaded remain abandoned at the terminals.

These two ports, which handle more than a quarter of U.S. imports, are deepening congestion as they close for several hours even on weekdays and are completely closed on Sundays despite work delays. This logistics congestion stems from labor shortages. As the U.S. economy rapidly recovers from the COVID-19 crisis and demand surges, labor shortages are intensifying across all sectors involved in the global logistics network, including shipping companies, ports, truck and rail transport workers, and retail businesses.

So far this year, cargo volume handled by the LA port has increased by 30% compared to last year, but truck operations have only increased by 8%. Meanwhile, whenever COVID-19 cases are detected, operations are halted or additional quarantine procedures are implemented, worsening the cargo bottleneck situation.

Costco in the U.S. has limited sales quantities of essential items such as kitchen towels, toilet paper, and bottled water due to a shortage of truck drivers to transport products. Nike is taking about twice as long to ship products from factories in Asia to North America compared to before COVID-19. Prices of popular sandwiches in Maryland have surged more than threefold, and artificial Christmas tree prices have risen by 25%, showing how logistics difficulties are driving product price pressures.

This phenomenon is occurring simultaneously worldwide, not just in the U.S. Bloomberg News reported, "Supply shocks are happening globally from Nairobi to Ningbo," and noted, "A family in Bucharest, Romania, has been waiting six months for a Hyundai Elantra."

Experts expect it will take at least six months for logistics disruptions to return to normal.

With global supply chains on the brink of paralysis?from essential goods to pharmaceuticals?port congestion, empty container supply issues, and labor shortages are clogging the logistics arteries, and the year-end situation with increased cargo volume is expected to worsen. Bloomberg pointed out, "As supply fails to keep up with demand, a massive crisis could occur this year, paralyzing the global economy due to COVID-19."