Typhoons, Bullwhips & Post-COVID Consumption Stymie West Coast Ports


President Biden’s administration has been tackling supply chain issues since the very beginning of his time in office, and his latest priority is to ease the massive congestion that’s occurring at ports along the West Coast. As I write this, FourKites data shows that the wait for a berth at the Port of Los Angeles is currently almost 10 days, while the Port of Long Beach is experiencing delays of up to 13 days! As the situation at America’s ports gains attention from the highest levels of government, many consumers are likely asking themselves the question: “How did things get so bad?”

To the general public, these crippling delays at two of the largest ports in the Western Hemisphere felt incredibly sudden. However, FourKites data helps paint a picture of how this year’s busy summer set the stage for an out-of-control autumn. In a classic example of the Bullwhip Effect, high consumer activity dating as far back as June, coupled with typhoons and other key disruptors, led to the consistent, increased volumes that eventually strangled ports on the West Coast.

Like an overstretched rubber band, the extended high volumes led to compounding delays, which limited how quickly volumes could be processed. This, in turn, led to greater delays, which drove higher volumes of backlog. In this post, I will walk you through how all of these individual events combined to create a feedback loop — and together brought about the massive delays we’re currently seeing.


A Bullwhip in Berthing Delays

From our vast network of global port data, there’s a general pattern that we’ve observed over and over again: When a port has no existing backlog, an 80% increase in volume will usually result in only slight delays. When a port already has a three-day backlog to contend with, however, that same 80% increase can lead to exponentially more severe outcomes, such as re-routed vessels and cancelled orders. This is exactly what we’re seeing right now on the West Coast.

One of the best examples of this impact can be seen in the berthing delays experienced at the Ports of Los Angeles and Long Beach, which began to reach the three-day mark over the summer.

As you can see above, berthing delays at both ports show a dramatic spike in late September/early October, preceded by a series of gradually worsening spikes starting as far back as July. This was followed by subsequent above-average delays at ports up and down the West Coast. Peak delays occurred during the weeks of September 20 and 27, when berthing times reached 7 days at the Port of Los Angeles and 10 days at the Port of Long Beach, respectively.

Under these conditions, even slight irregularities can compound into exponential delays, as ports may still be processing empty containers and dealing with other impacts of a backlog. Naturally, if greater irregularities occur while the port is still recovering from or working through a backlog, the impacts can be even more severe.

In the case of the Ports of Los Angeles and Long Beach — which are already operating at increased volume due to high consumer demand — increasingly frequent, short-term disruptions have had a disproportionate impact on operations. In other words, as these events continue, ports grow more and more backlogged, even as consumption ramps up for the holidays and the winter months. This leads to a positive feedback loop, commonly referred to in supply chain as “the Bullwhip Effect.”


High Import Volumes Cause Exponential Impact

This perfect storm of high volumes and long backlogs led to the first compounding delay of the year. As berthing times spiked, traditional solutions such as increased overtime and imposed port storage penalties on demurrage and detention proved ineffective. Instead, other tactics had to be considered to ease the pressure on the ports.

In an attempt to reduce traffic coming into the ports, carriers and shippers shifted some cargo routes toward alternative berths on the East Coast, while others turned to air freight to improve the consistency of transpacific exports. For the time being, these approaches have proven effective in alleviating the strain on the West Coast without causing a statistically significant impact to operations on the East Coast. However, the additional lead times and cost of transporting the products are major points of decision for shippers and cargo owners along the trans-Pacific eastbound route (Asia to the US).

At the Port of Long Beach, FourKites saw a spike in load volume beginning the week of July 19 and culminating in a spike of 2x the typical load volume during the week of August 23. After a short lull, growth continued into the week of October 4, which saw the highest recorded load count at this location in 2021, at 5x greater than the weekly average. Load counts at the Port of Long Beach have declined in subsequent weeks, returning closer to annual averages, but remaining on the high side of the volume of imports.

The Port of Los Angeles saw a similar pattern of increased load volume, however the impact peaked a full month earlier. Beginning the week of August 23, the Port of Los Angeles logged 3x its average volume. By September 6, inbound shipments had grown to 5x the historic average. And by October 11 — one week after the 5x spike at the Port of Long Beach — volumes at the Port of LA had dropped to 2x the historical average, though volumes have remained above average since then.


Deep Dive: Port of Seattle

While port operators struggled to keep operations steady in California, similar effects were being felt as far north as Seattle, Washington.

  • During the time of the extensive berthing delays at the Ports of Los Angeles and Long Beach, the Port of Seattle saw a dramatic increase, with FourKites tracking 8x the average import volume the week of September 20.
  • Extending into October, Seattle reached a second high at 3x the normal volume during the week of October 11.
  • Berthing time at Seattle has kept within it’s typical less-than-1-day expectations, despite the volume increases in imports.


Home Free for Christmas?

The ocean supply chain is now the source of near-daily headlines, with extended congestion forecasts and earnings calls setting the record for number of mentions of “supply chain”. Amid all this consternation, ocean ports are, more than ever, one of the several centers of the supply chain’s attention.

As ports, carriers and shippers continue to work to resolve the underlying issues behind constraints at the ports and shortages on the shelves, we’re starting to see volumes creep slowly downward at the West Coast ports. But the problems are not yet resolved. Continued variability in berthing times suggest bottlenecks will continue on for months to come, and it’s possible that the high, 13+ day delays of today may very well be the lows of tomorrow.

Moreover, with the holidays fast approaching, we anticipate volumes will increase significantly through at least mid-December, as smaller shippers and last-minute product buys are pushed through from overseas. This month, many of the knowns and unknowns of holiday imports will enter the constrained West Coast ports. In the event that volume doesn’t meet the distribution center receive-date requirements to hit shelves on time, or to fulfill e-commerce orders, any excess stock will lead to post-holiday sales that will be larger than any year we have seen in the past.