Major US port hits container record as supply chain disruptions continue to roil US

The Port of Savannah hit a container record last year, handling 5.6 million container units of imports and exports, an increase of 1 million container units from the year before amid continued supply chain disruptions.

The Georgia Ports Authority provided the data on Tuesday, noting the 20% increase in shipping containers moving through the Port of Savannah in 2021 as seaports across the U.S. struggled to keep up with the surge in cargo that packed container yards and forced ships to wait at sea.

Reporting on "Mornings with Maria" on Thursday, FOX Business correspondent Ashely Webster noted that the situation has "improved" at the port since his last visit about three and a half months ago when the port was "completely packed with containers, with more than close to 40 ships anchored offshore." Webster reported that on Thursday morning he saw only one ship anchored offshore waiting to come into port.

Executive director of the Georgia Ports Authority Griff Lynch told Webster during a live interview on "Varney & Co." that while every major port is experiencing a backup of ships, the Port of Savannah is "fortunate that we have the expansion capability," which is helping to navigate the situation. 

He told Webster that a few months ago more space was needed "in order to get the cargo moving and once we did that, we’d be able to get those ships caught up, well more space has come." 

He noted that while more capacity has been added, "we are only part of the way done." 

Lynch has said retailers rushed to refill inventories and kept ordering in an attempt to keep shelves stocked while online shopping also continued to grow amid the coronavirus pandemic, contributing to the record volumes at The Port of Savannah during all 12 months of 2021.

"It literally is three to four years of growth in one year," Lynch said in an interview with The Associated Press, stressing that "it didn’t come out without pain."

He went on to note that the port’s container yard is still largely full and said the outlook for 2022 remains uncertain. 

Lynch expects strong cargo volumes to continue in the first quarter but noted that some forecasts predict a slowdown driven by inflation later in the year.

"I would not say that I would expect the supply chain issues to be completely worked out by the end of this year, I do not expect them and I have not expected them," Federal Reserve Chairman Jerome Powell said on Wednesday responding to a question from FOX Business during a news conference. 

"What I would say, and I have been saying is that I expect progress to be made in the second half of this year mainly, progress because we are not making much progress" he went on to say. "Things like the semiconductor issue, they’re going to be quite a long time, I think they’ll go more than through 2023."

Powell’s comments on Wednesday contradicted claims from the Biden administration last month that there has been "significant progress" by his Supply Chain Disruptions Task Force. 

In a document released last month, the White House struck an optimistic tone on gas prices, supply chain issues, and inflation – factors that have caused him polling issues and subjected him to intense Republican criticism.

Late last year, Powell acknowledged inflation was no longer transitory as the supply chain crisis raged. 

"Bottlenecks and supply constraints are limiting how quickly production can respond to higher demand in the near term. These problems have been larger and longer-lasting than anticipated, exacerbated by waves of the virus" he said during the December meeting. 

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The consumer price index rose 7% in December from a year ago, according to a Labor Department report released earlier this month, marking the fastest increase since June 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.5% in the one-month period from November.

Price increases were widespread. Although energy prices fell 1.1% in December from the previous month, they're still up 29.3% from last year. Gasoline, on average, costs 49.6% more than it did last year. Food prices have also climbed 6.3% higher over the year. 

Ports have become one of many bottlenecks in global supply chains as ships have been filling up with boxes carrying everything from electronics to frozen chickens. The backlogs have been leading to some empty shelves at stores.

The Port of Savannah, which has the fourth-busiest U.S. seaport for cargo shipped in containers, experienced shipping traffic jams last fall when as many as 25 ships at a time waited off the Georgia coast while up to 85,000 containers piled up on the terminal awaiting transport amid the surge in trade. 

The port authority added more workers and equipment, and the agency set up inland sites to temporarily store cargo and free up space at Savannah’s container terminal. The agency won approval from the federal government to use $8 million in leftover grant money to set up four container yards in different parts of the state.

Webster noted on Thursday that "the cost of shipping freight continues to rise," which will likely lead to higher prices for the consumer as inflation has soared to the highest level in four decades. 

Container freight rates have soared 130% globally year over year, according to the Freightos Baltic Index.

Wholesale prices rose at the fastest pace on record in December, the latest evidence that inflationary pressures are continuing to plague the U.S. economy.

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The Labor Department said earlier this month that its producer price index, which measures inflation at the wholesale level before it reaches consumers, surged 9.7% in December from the year-ago period. It marked the highest figure on record since the government began tracking the data in 2010.

Still, there are some signs that inflation could be decelerating: On a monthly basis, prices rose just 0.2% in December following a revised gain of 1% in November. Economists surveyed by Refinitiv expected producer inflation to rise by 9.8% on an annual basis and 0.4% from the previous month.

Food prices declined 0.6% in December after climbing 1.2% in November, while energy prices dropped 3.3%, following a 2% gain the previous month. 

Powell has said the Fed mistakenly expected that supply chain bottlenecks driving up prices for goods including cars, appliances, and furniture would not last nearly as long as they have. Once unsnarled, prices for things like used cars, which have soared in 2021, would come back down, Powell noted.

However, for now, those supply chain problems have persisted, and while there are some signs they are easing, Powell has acknowledged that progress is limited. He noted earlier this month that many cargo ships remain docked outside the ports of Los Angeles and Long Beach, the nation's largest, waiting to unload.

The Los Angeles area saw a backup of a record 157 ships in October of last year. 

Webster reported on Thursday that the ports in Long Beach and Los Angeles are "still struggling" with more than 100 ships offshore as the omicron variant has posed added challenges. 

He also noted that the truck driver shortage is contributing to those challenges at U.S. ports as it has been difficult to find the resources needed to transport the offloaded cargo to retailers and warehouses across the country. 

Last week, American Trucking Associations President and CEO Chris Spear argued that the slow return to work is "exacerbating the supply chain's ability to meet demand."

Speaking on "Mornings with Maria," Spear explained the impact on the supply chain due to the "chronic shortage of talent," which has led to cargo sitting unused and unloaded at U.S. ports. He noted that the trucking industry is "short 81,000 drivers."

Port of Long Beach executive director Mario Cordero also provided insight into the supply chain issues he is facing while speaking on "Mornings with Maria" last month. He noted that the crucial harbor has been "making progress" with capacity constraints and predicted that by the middle of this year there will be "some sense of normalcy," stressing that the progress will be contingent on the track of the coronavirus and its impact on the labor force.

Cordero had been warning of an industry "crisis" over supply chain disruptions.

Speaking with "Mornings with Maria" in September, Cordero noted that there was a "confluence of factors" on why the situation developed into a "crisis," explaining that the disruption to the supply chain is "very much" due to the COVID-19 pandemic. 

Cordero also pointed out that another big factor is skyrocketing consumer demand in the United States, especially pertaining to online orders amid the pandemic as more people opted to shop from home.

He also pointed to "the healthy appetite of the American consumer," which he acknowledged is "good news," but noted they are "purchasing at numbers that were not foreseen," which is contributing to the supply chain bottleneck. 

In September, Cordero pointed out there were as many as 73 vessels at anchor. Last month, he noted that the number was at around 28, acknowledging the situation is "much better" compared to several weeks ago. 

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Earlier this month The Wall Street Journal reported that the prospect of continued COVID disruptions in China, the world’s second-largest economy, is increasing worries that bottlenecks will continue to weigh on the supply chain and will ripple through the global economy. 

China has a zero-tolerance strategy for combating the coronavirus pandemic and has been experiencing a flare-up of cases, which is leading to major manufacturers shutting factories at a time while workers are in short supply as officials impose city lockdowns and mass testing on a scale that was not experienced in nearly two years, according to the Journal. 

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FOX Business’ Edward Lawrence, Suzanne O’Halloran, Andrew Mark Miller, Megan Henney and The Associated Press contributed to this report.