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Economy

The supply chain is a mess. Consumers are paying the price

DANIELLE KURTZLEBEN, HOST:

By now you've heard - the supply chain is a mess. Storage and transportation issues are causing very costly backups. And as NPR's Andrea Hsu reports, it's unclear who's to blame or when things are going to get better.

ANDREA HSU, BYLINE: The San Pedro Bay off the coast of Southern California looks like something out of a child's imagination. Colorful shipping containers are piled high on scores of cargo ships. They wait their turn to get into the ports of Los Angeles and Long Beach. In normal times, there may be just one or two container ships out in the bay, often none. Now there are around 70. Why? There's no space for the ships to dock. Noel Hacegaba is chief operating officer at the Port of Long Beach.

NOEL HACEGABA: We've never handled this volume of cargo - 20 million TEU in a single year is something unheard of.

HSU: Imagine 20 million containers, each one 20 feet long, stacked with stuff. Americans have gone on a shopping spree, and the docks are packed with containers. It's like a parking lot. Hacegaba recently announced a surcharge of $100 a day for containers that are left too long.

HACEGABA: We're approaching the holidays. We need to do everything that we can to move those boxes out.

HSU: He's urgent for a reason. The dockworkers need that space.

FRANK PONCE DE LEON: The problem is that we can't bring anymore ships because there's no more room on the docks.

HSU: That's Frank Ponce de Leon. He's a former crane operator who speaks for the International Longshore and Warehouse Union, the dockworker's union. Normally, he says, they'll operate four or five cranes on each ship and get all the cargo off within a few days, but they've had to slow their pace.

PONCE DE LEON: We're working one crane or two cranes, and it's taking, you know, that much longer.

HSU: To unload a ship to free up a spot for another ship. It's been almost a month since President Biden announced the ports of LA and Long Beach would move to 24/7 operations, which is the norm in many other parts of the world. But it hasn't happened. Ponce de Leon says the dockworkers are available around the clock, but the companies that run the port terminals have not called on them to work 24/7. Bottom line, he says, the dockworkers are not the holdup.

PONCE DE LEON: We need everybody within the supply chain to pull their part.

HSU: And that includes the truckers, whose job it is to move the loaded containers off the port. But they are having space issues, too. It has to do with their chassis - the wheeled frames that truckers use to haul those heavy containers. Kent Prokop is vice president of Container Freight Transportation - that's a trucking operation in Long Beach.

KENT PROKOP: We've got 500 of them literally held ransom by empty containers that we're unable to return to the port.

HSU: Empty containers are sitting on those valuable chassis. You have to have an appointment to drop off empty containers, and appointments are really hard to come by right now.

PROKOP: We just have to keep checking and checking and checking.

HSU: Why is it so hard? You guessed it - there's nowhere on the terminals to put the empties. It's so bad, containers are being parked wherever there's available space.

PROKOP: You'll see empties everywhere - on neighborhood streets, in parking lots. I mean, they're all over the place.

HSU: The steamship lines responsible for taking the empty containers back to Asia have not done so. Some of their ships have been stuck in the bay for days, waiting for their goods to be unloaded. Outside the ports, the space crunch continues.

BOB SCHROEDER: Even if they get the container off the port, there's no place to put it at the other end.

HSU: That's Bob Schroeder, CEO of the warehousing company WSI. He says warehouses everywhere are full. His are so full, even the aisles have become unpassable.

SCHROEDER: A little like overstuffing your closet. You can't get to the stuff in the back.

HSU: What's behind the jam? Well, for one thing, warehouses are short workers, but a big part of it is us. We're shopping more online. Warehouses are overwhelmed with orders. It's the holidays. Also, companies are ordering a lot more stuff. They want more stock to have on hand just in case.

SCHROEDER: Everybody wants their inventory available to them like Kleenex coming out of a box, one at a time any time I want it.

HSU: So when do we get back to normal? How do we free up space? Peter Tirschwell of the economic research firm IHS Markit says there's no quick fix. The other week, he was moderating a panel with the U.S. heads of two big ocean carriers.

PETER TIRSCHWELL: And I put the question to these guys. I go, is there light at the end of the tunnel that you can see right now? And both of them said no.

HSU: For too long, Tirschwell says, nobody invested in the supply chain itself to make it better and stronger.

TIRSCHWELL: Because nobody really cared about it. The system worked.

HSU: Until it didn't. Now ships are being forced to loiter. Dockworkers take extra days to unload them. Trucks sit idle waiting for chassis. Warehouses are jammed. As the hunt for space continues up and down the supply chain, who pays the price? Most likely, it's us. Andrea Hsu, NPR News. Transcript provided by NPR, Copyright NPR.