Shipping companies are just now starting to feel the pressure after months of this backlog.
Spacecraft Components manufactures products for industrial industries all around the U.S. including Las Vegas, L.A., Indianapolis and Scottsdale. But some components are not sitting on a ship in California, forcing it to change how it operates.
The same materials made in the U.S. may cost about 75 cents, compared to $3.50 made overseas according to Craig Wiseman, Spacecraft Components' president and co-owner.
The family-owned business imports some materials from countries like India, China, Vietnam & China.
Outsourcing helps keep costs low, but with the shipping backlog, the wiseman says he must make more products in house.
Some of my products from overseas is currently stuck on a ship at sea while running them here, but it takes my 75 cent cost and quadruples it to a much higher price. We re not shipping some of their product so that s putting new cars that belong on the tracks behind so some larger transit authorities back East, such as New York City Transit and Chicago Transit, can t get new cars or get parts for repair cars, Wiseman said.
Stephen Miller, an economics professor at the University of Nevada-Las Vegas, says the shipping backlog is a direct result of COVID -19 pandemic : there isn t enough manpower to clear the goods off ships and there is a shortage of long-haul truck drivers.
Miller said this is nothing that we've seen before. Think of an economy as working smoothly and operating, so that the supply chain is operating efficiently. The bottom drops out of the economy. And then boom. Spacecraft components exist on ships, but the articles purchased more expensive means sold in the U.S. importing goods by air rather than sea and raising prices to cover the difference.
It is also replacing jobs and switching to self-operating machines to cut costs.
We re too dependent on items offshore, and I think the consumer - me included - is felt the pinch all across the board from both material costs going up and shortages, Wiseman said.
Last week, President Biden announced that the ports would open 24 hours a day.
But economists say the supply chain takes time to adjust, and they will look at the data for years to come.
On the Savannah, Georgia shoreline, Georgia port is also dealing with a backlog. Meanwhile, the ports in New Orleans and Charlotte, North Carolina, are not facing as much a backlog as the California ports.