Experts explain the link between labor shortages and current supply chain issues
10/12/2021 / By Ramon Tomey
The ongoing congestion at ports in the U.S. West Coast has contributed to delivery delays and product shortages ahead of the holiday season. Labor shortages also contribute to the problem, with not enough port workers available to help unload goods from containers.
As such, two shipping experts have sat down to talk more about the impact of labor shortages at cargo vessels on the bigger supply chain disruption.
FreightWaves Director of Market Experts Anthony Smith sits down with Campbell University professor and shipping expert Salvatore Mercogliano to talk about the supply chain disruption originating at California ports during a fireside chat.
Mercogliano has shared his thoughts on the ongoing issue and how labor shortages among vessels made things worse for all stakeholders during the chat.
“The entire world distribution network relies on about 1.3 million seafarers to move the world’s goods. Typically, foreign mariners employed on these vessels sail for anywhere from two to six months. You saw mariners out there for over a year on a vessel, and understand a lot of these … massive vessels have very small crews of 20 to 25 crew members on board that work every day,” Mercogliano says. He adds that foreign mariners on these vessels have no reliefs when they are on board.
Mercogliano mentions that the ongoing Wuhan coronavirus (COVID-19) pandemic also adds to mariners’ woes. “One of the things we’re seeing is potential for that system to have a breakdown. We’re seeing issues right now with the fact that back in 2020, there were about 400,000 mariners that were sailing long over their relief days.”
He explains that COVID-19 outbreaks in ports, travel restrictions and inability to get vaccines mean that mariners simply cannot get off their vessels. Because of that predicament, mariners are tempted to find another job.
“What that means is if you lose the employees to man those vessels like we see in trucking and rail right now, that can have a catastrophic effect on the movement of goods,” Mercogliano warns. (Related: Shipping workers warn of imminent global transport systems collapse.)
Vessels are not the only ones impacted by labor shortages
The negative effects of labor shortages are not only limited to foreign mariners aboard cargo vessels. Their land-based counterparts are also feeling the heat of insufficient labor to keep up with the demand. (Related: Second wave of a global “shipping nightmare” now taking shape – expect SHORTAGES of everything.)
The Ports of Los Angeles and Long Beach in California are currently experiencing record congestion, with many ships off the coast of San Pedro Bay waiting to dock and unload their containers. Unfortunately, a dearth of available hands to help in unloading only worsens things. Two truck drivers have reached out to CBS Los Angeles to share their predicament.
Walter Martinez tells the local L.A. channel: “I’ve got friends right now that are in line … from [9 a.m.] and they can’t pull the load yet.” He adds: “The people inside, they get paid by the hour – but not the drivers.” Another driver, Oscar Ovalle, slams the port’s refusal to mobilize other workers to help unload cargo. He says: “There’s one crane for 60 trucks and it’s ridiculous. They have two other cranes sitting.”
Delivery company FedEx is now bearing the brunt of labor shortages coupled with increased demand. It has resorted to rerouting more than 600,000 packages daily to avoid overwhelming its major shipping hubs.
FedEx COO Raj Subramaniam points his finger at under-staffing problems for the “widespread inefficiencies” at the shipping company. Due to the labor shortages, FedEx hubs are then forced to divert 25 percent of packages that normally arrive. He cites the Portland hub as an example, which now currently operates at “65 percent of the staffing needed to handle its normal volume.”
Subramaniam explains that the diverted packages must then undergo rerouting and processing, “which drives inefficiencies in our operations – and in turn higher costs.” He adds: “These inefficiencies included adding incremental linehaul and delivery routes, meaning more miles driven and higher use of third-party transportation to enable us to bypass Portland entirely.”
Collapse.news has more articles about how labor shortages play a role in the disruption of supply chains worldwide.
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cargo vessels, collapse, delivery trucks, foreign mariners, labor shortage, package deliveries, relief days, shipping industry, supply chain, supply delays, supply lines, transportation
This article may contain statements that reflect the opinion of the author
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