6/27/2021

Piling up cargo is making US inflation worse

 

 









Shipping containers are stacked high at the Port of Los Angeles

Frederic J. Brown/AFP via Getty Images

How about filling in the blanks with the English for the given words?

John Nephew thought he had a winner with a new tabletop game called Dice Miner. ………………….. (sin embargo) Importing the games from China turned out to be its own roll of the dice.

Nephew, founder of Atlas Games in Duluth, Minn., ordered a 40-foot cargo container full of games from Shanghai in December, anticipating delivery in about six weeks. ………………….. (en cambio), the games took nearly six months to arrive — an increasingly common example of the supply chain bottlenecks pushing inflation to its highest level in more than a dozen years.

When the cargo with his games finally arrived on the West Coast, the container was immediately emptied so it could be sent back to China for another load.

The games then continued on to Minnesota by truck, …………………..  (en vez de) rail, which would have been more economical. The final shipping cost was about $12,000, at least 50% more than the game maker had budgeted.

Businesses around the country are wrestling with similar challenges in getting their goods. Soaring demand from Americans for everything from iPads to cars is leading to a surge in freight crossing the Pacific, hitting business owners such as Nephew.

………………….. (Aunque) things aren't quite so busy on the East Coast, the cost of bringing a refrigerated container from Italy to New Jersey has soared to $10,000, more than twice the going rate before the pandemic.

"They say there are not enough containers in Europe" says Philip Marfuggi, CEO of the Ambriola Co. and a board member of the Cheese Importers Association of America. “It not only takes up to twice as long for shipments to arrive, but deliveries have become less predictable. Like the other day, I had eight containers show up. They should have been like two a week. And then all of a sudden, they all showed up at once."

All of this unpredictability creates costs and headaches for businesses that had grown accustomed to reliable, just-in-time delivery.

Federal Reserve Chair Jerome Powell said ………………….. (dado que) these "bottleneck effects" have been larger than he and his colleagues anticipated, the central bank raised its forecast for inflation this year to 3.4%.    ………………….. (De todos modos)  Powell expressed confidence that the cargo constraints won't last indefinitely.

"Prices have moved up really quickly ………………….. (debido a)  the shortages and bottlenecks and the like — they should stop going up, and at some point they in some cases should actually go down," Powell told reporters last week.

The Biden administration has created a task force to address the most urgent shortages – such as computer chips – ………………….. (al mismo tiempo) also looking for ways to build more resilient delivery networks for the future.

………………….. (Como) pandemic fears are receding and people are beginning to spend more of their money on travel and entertainment, demand for goods is expected to decline.      ………………….. (A pesar de eso),  it could take months to untangle the traffic jam.

Gene Seroka, executive director of the country's busiest cargo port thinks it will be early next year before cargo volumes shrink back to more normal levels.

That's bad news for business owners such as Nephew, who is already bracing for even higher shipping costs.

“…………………………..(Aunque) I had to pay 50% more to ship my Dice Miner games, that shipping price is going to look like a bargain within the next couple of weeks", Nephew says.

 


The Port of Los Angeles logged its busiest month in history in May.

Mario Tama/Getty Images

Adapted from NPR