I don’t know why I am so fascinated by the container ship logjam off the coast of Los Angeles but I am so I’m blogging about it.
Other than getting into a boat and counting ships, you are definitely going to have to do some digging online to find out the real story. For instance, I just read an article that shows a drop off of 46% (from 86 ships down to 46 ships) in the number of ships at anchor off the coast of LA:
Another source indicates a 30% drop. To be included in these ship counts, they typically have to be within 40 miles of the ports. However, starting in mid-November, ships were allowed to start lining up outside the 40-mile perimeter, in fact, 150 miles away. The main reason for this change was to reduce pollution along the coastal regions of southern California.
So, if you include all of the ships out there with a place in line, there are 96 ships waiting to dock. That’s not counting the 31 ships already docked and in the process of being unloaded. That’s a lot of containers!!
Based on this information, the logjam of ships hasn’t eased at all. Then, I think of each one of those ships carrying 3,000 containers (I’m being conservative) and a truck is needed to haul each one of those containers. Boy, do we need a lot of truck drivers to get this stuff moving. This is certainly going to take awhile to clean this backlog up.
All of this is creating higher costs for importing companies, which will be passed on to their customers, me and you. If it gets to the point where the prices to import become so high, then it will make sense to build stuff here instead of importing and that will be a nice boom for an already booming economy.
Please let me know if you have any questions.
.Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
