What's caused America's supply chain crunch?

you better watch out you better not cry  you better not pout or maybe you should   millions of dollars worth of holiday presents  and other goods americans have ordered are stuck   on giant container ships waiting for a space to  unload at the ports of los angeles and long beach   call it a case of freight expectations there's so  much cargo arriving from asia that some of it has   been diverted to other ports in the country  it's led to an epic traffic jam that no one   seems able to untangle and it's revealed deep  flaws in america's supply chain what started   as a shop from home binge during the pandemic has  had lasting effects retailers warn these holidays   will be marked by empty shelves higher prices and  lost jobs unless the backlog is cleared we wanted   to see what it's like in the busiest ports in  the country but first we had to get on board   the story will continue in a moment space at the long beach docks is so  tight that when a slot opened up at 1am   the port pilots wasted no time they sped off into the dark and so did we  following captain james dwyer up a rope ladder   as he climbed aboard to guide the giant ship the  ever linking to an open berth we're inbound for la   birth 405. steering the ship through the harbor  he told us pilots are handling twice the usual   number of vessels right now we're just in our  slow turn the port to get onto the main channel   with the port glittering in the distance captain  dwyer from the bridge slowly turned the 100   000 ton ship around stop engine we'll back up  yes sir we're going to go start first oh stop we found this feat of  parallel parking unparalleled   push easy for the last few yards and inches  captain dwyer stuck his head out the window   to guide the behemoth in by sight can we let  go of the tug line aft let go the tug line   easy it turns out docking a ship the size  of three football fields is the easy part   how about that getting the goods from here to  store shelves is proving to be a lot more daunting it used to take two days to get  cargo off the docks now it takes nine   to see why we took to the  air with ryan peterson ceo   of flexport a technology company that buys  and sells cargo space look at how packed this   is here yeah totally balanced we flew over the  sprawling ports of los angeles and long beach   40 percent of all u.s imports come through  here we saw stacks of marooned containers   dormant cranes loaded rail cars sitting idle  the country's busiest ports packed to the gills and out at sea more than 80 ships stretched to the  distance a new record they used to pull right in   now they can wait weeks peterson told us this  backlog has been building since the start of   the pandemic is it getting worse it's definitely  getting worse it's as bad as it's ever been right   now right there do you see all those blue  cranes there's no ship that makes so sick   that's what that's what i say it makes no sense  until you realize hey the yard is totally full   see how high those stacks are totally jammed up  so when you see this what does this say to you   i think a lot of businesses are at risk if they  can't get their products in time for the holiday   season and of course it also means consumers are  going to pay really high prices for everything   so this is what inflation looks like this  is inflation firsthand the problems at the   ports have cascaded across the country  so we followed the supply chain from   the choked ports of la and long beach to rail  yards in chicago along the way we found chaos finger-pointing huge profits and massive  losses and everywhere frustration   bobby jabba harry's frustration was palpable when  he lifted his warehouse door to show us inside so   what what should this look like yeah you right  here you wouldn't be able to walk in here i mean   we got boxes all the way to the ceiling this  would be fully full so what do you think   when you see it like this it's unbelievable  there's never been a month that that's empty   ever the fact that christmas is around the corner  and it's empty it's shocking java harry runs yeti   houseware he imports household appliances from  china he told us his goods have been delayed for   six months now he has thousands of orders he  can't fill and his shipping costs have soared   from two thousand dollars a container to  as high as twenty five thousand dollars   he blames this crisis on the ocean carriers  i call them the pirates of the sea they're   100 price gouging and no one's done anything  about it it's not just market forces no no   i really don't buy it it's price gouging  and it's someone taking advantage   and it's hurting your business hurting my  business and many other people's businesses   there's too much coming in through the u.s supply  chain and it's not leaving the port fast enough so   that's why you've got these ships backed up here  that's right jean soroka is the executive director   of the la port he told us the entire system  has been overwhelmed by the tsunami of orders   flooding in from asia who is making money off of  this who is benefiting from this backlog liner   shipping companies will make record profits this  year again they're booking more cargo than ever   before there's a supply demand issue so the  price just keeps going up prices skyrocketed   on these trans-pacific trade routes there's  money being made this month the world's largest   shipping line mursk reported record profits of  16 billion dollars up 68 percent from last year   the ocean carriers most headquartered in europe  or asia say demand for cargo space keeps rising   they blame a shortage of truckers at the port  taken empty in take a full container out where   is this falling apart in the fact that we because  of the booking systems have restrictions on the   type of container that you can bring in matt  schrapp of the harbor trucking association   told us there's no driver shortage at the  ports he says it's the antiquated booking   system that's gumming up the works shrap told us  normally truckers make an appointment to return an   empty container before picking up a full  one but with so little space at the ports   there are new restrictions on even the  color of container that can be returned   truckers can wait hours in line only to be  turned away because there's no room some of   the terminals will say that the no shows of your  drivers 50 percent of the time they don't show up   how do you explain that well we make appointments  because we don't know sometimes until the day of   whether or not we're going to be able to return  an empty container back into that marine terminal   and then all of a sudden the day of  they say sorry we're not taking any more   rust-colored containers so it's just you know  it's just it's a game of whack-a-mole literally   the result lots like this full of empty containers  sitting on chassis the undercarriage that holds   the container and attaches to a truck without  a chassis you cannot move those containers off   of dock and the majority of chassis are sitting  under empty containers strewn around california so   the chassis are necessary to move the full  containers out of the port absolutely but   most of these chassis are now being used just to  hold empty containers that's correct this is the   definition of a bottleneck absolutely people are  ordering early and that's not the only choke point   in chicago we met rick waldenberg at his  family's toy business learning resources every year he imports toys from china  and brings them here by rail he told us   this year has been a nightmare how long is it  taking to get the product from los angeles here   i'd estimate that the domestic lead time is 45  days and that's unbelievably slow pony express   could have gotten it here faster waldenberg  told us he tried to avoid the backlog by placing   his christmas orders in may as a toy net for  christmas only to hit a monumental snag in chicago   there was so much cargo at the rail yards that his  containers got stuck at the bottom of a pile for   nine weeks he told us it was like having his toys  held hostage the kicker the rail line charged him   for storage this on top of paying thirty thousand  dollars for a container from china ten times what   he paid last year if that were as bad as it was  that would still be horrible but it gets worse   because we get penalized for storage and that's  where it becomes the theater of the absurd   so the 25 to 30 thousand dollars is the  market gone berserk but the penalties are um   a punishment that is unconscionable so  amy your your cargo is being held up   right for nothing you have done wrong correct  you can't go pick it up correct but you have   to pay for it to be stored correct the rail  yards told us it was all due to congestion   rick waldenberg told us he paid almost a million  dollars in storage fees in september alone   can you afford this no i can't it's  impossible to absorb this kind of expense   so we had to raise our prices these penalties are  gratuitous they're not incurring extra expenses   because of this sounds like you're saying  they're charging you extra because they can sure feels like it now with inflation the highest in 30  years and the holidays fast approaching   there's a flurry of plans to break the log jam  starting tomorrow gene soroka who runs the la port   says he'll find the shipping lines for any  cargo that sits on the docks more than nine days   and last month president joe biden announced  the ports had agreed to work round the clock   but it hasn't had much effect we typically work  about 19 hours a day here it's that three to   eight am shift that we've added and tried to get  others to work with us during those times as well   so you might be working 24 7 but the warehouses  are not that's right so they have no place for   these goods to go after they get off the ship at  three o'clock in the morning and there you've just   diagnosed the problem the cargo has nowhere to go  we've got to get a workforce in the warehouses and   the trucking industry that are complementary to  all this cargo that is that's coming in right now   there is a lot of finger point yes there is the  truckers blame the terminals the terminals blame   the shippers the retailers blame the truckers and  the shippers how do you get that contentious group   to sit at the table stop pointing fingers and  actually clear out this backlog that's been the   toughest part we haven't moved the needle yet but  it's not for a lack of trying we're going to have   to just double down the whole supply chain miss  has put a spotlight on glaring deficiencies in u.s   infrastructure flexport's ryan peterson  says there's no quick fix and the 17 billion   dollars in the infrastructure bill for upgrading  america's ports may not be enough see singapore   alone is building a 20 billion dollar container  terminal right now how did we get to this i mean   i've seen the ports in rotterdam and in hong kong  and they are light years ahead of us one problem   with the u.s system is we the ports are owned  by the cities that they're in and ultimately   the capital expenditure for building terminals for  dredging for you know for investing in these ports   comes down to decisions made at a local level  you know this is a national infrastructure it's   to serve the entire country so there's a real  role for federal government to come in and step   in the white house has put a top-level task force  on the problem but other than twisting arms and   wrangling concessions there's not much it can do  in an industry dominated by private companies far   in shipping lines and local port authorities and  no one we spoke with expects a christmas miracle

Channel: 60 Minutes

Views: 1,342,447

Keywords: 60 Minutes, CBS News, supply chain crisis, port of long beach, port of los angeles

Id: W7jSsyQKIfE

Length: 13min 32sec (812 seconds)

Published: Sun Nov 14 2021

Reddit Comments

[u/cydonian66]

This is like that Spiderman pointing meme 🤣

[u/peepjynx]

This is nuts. You can easily tell who is really stuck and who is just using this as a money gouging opportunity.

But at the end, leave it up to Los Angeles to fix this issue. Hell no... our city can't even get housing under control. No fucking way they are responsible enough or savvy enough to fix this.

[u/Far-Education5778]

Yes that is exactly 30 minutes

[u/[deleted]]

so stheyre just going to put fees on people lol and who is going to pay for that?

[u/55vineyard]

Business Insider has had a series of articles about the shipping issue with interviews from various sources, goes fairly in depth, if interested in the subject.