Supply chain bottlenecks have become so bad that even throwing more people at problems won’t go away immediately. A new snapshot of port activity in California is the latest sign.
running news: According to data from RBC Capital Markets shared with Nerdshala, the number of workers in the ports of Los Angeles and Long Beach is down about 30% from pre-COVID levels. RBC estimates foot traffic based on anonymized cellphone location data from the geospatial intelligence company Orbital Insight.
- “It amounts to your labor crunch,” says Michael Tran, managing director of digital intelligence strategy at RBC Capital Markets..
why it matters: Companies are eager to find signs of relief in the supply chain to effectively adjust inventory and prices. The data shows how far activity has fallen from pre-pandemic levels and how difficult it is to stabilize this year.
state of play: According to data from RBC, of the 22 largest ports in the world, LA and Long Beach have experienced the longest turnaround times (how long it takes a ship to go through the port) this year.
- The most efficient port, Port Klang in Malaysia, and the time difference between LA and Long Beach is 4.8 days.
- At all global ports, current turnaround times are almost a full day (+350%) higher than normal levels in 2019.
big picture: The economy cannot add jobs fast enough to balance the current record demand for goods.
- Tran says the backlog is so high that with more workers being added, you’ll need everyone to work harder and longer to get to that backlog first.
what to watch: According to Philip Sanfield of the Port of L.A., there are currently 60 ships at anchor between the two ports, or about two weeks of work waiting to arrive.