Pool Industry Feels Trickle-Down Effects of Container Delays

The trickle-down effect of container ship delays can be felt far and wide throughout the pool industry. A veritable conga line of cargo ships now sits in a holding pattern outside of Southern California’s busiest two ports. Last week the ports of Los Angeles and Long Beach reported over 100 ships waiting to unload their containers. The news of this record-breaking supply chain crisis will come as no surprise to those in the pool industry who have been feeling the pain of delays all summer long.

The two southern California ports both account for roughly 40% of container ships entering the United States. The last year has seen an incredible surge in traffic come through Southern California. It was unusual for ships to wait more than a day for a berth at the Los Angeles complex prior to the outbreak of Covid-19. These days, locals in Southern California have become used to seeing the flotilla of container vessels moored offshore awaiting entry into port. Each day, new arriving cargo ships add to the growing backlog.

The story is the same all throughout the West Coast. The traffic bottleneck of container ships in San Francisco has gotten so bad that in June, the US Coast Guard had asked ships not to enter the bay at all.

A recent review of 351 ports around the world rated the Los Angeles complex #328 behind Tanzania. The neighboring Long Beach facility fared even worse coming in at #333 behind Turkey and Kenya. The frustration at the inefficiency to unload these ships has prompted President Biden to announce the ports will begin running 24/7 to keep up with demand. However, whether this will actually come to pass in time for the holiday season remains in question.

“It’s not a single lever we can pull today to open up all the gates,” said Gene Seroka, Executive Director for the Port of Los Angles, indicating that the exact timeline for changing to round the clock operations still remains unclear. 

How Delays Are Affecting The Pool Industry

News of cargo delays has prevailed throughout the media for months. It’s only within the last few weeks that the number jumped from 30 ships to 60, to now over 100 ships now waiting according to the most recent report. Anthony Reid, a pool builder in Los Angeles, has been waiting for materials for months and described the aggravation the situation is causing. “I’ve got 5 customers waiting for decking and everything is on a boat sitting 20 miles away,” said Reid, “I can wave at it but can’t touch it. It’s the most frustrating feeling imaginable to have to tell a homeowner who has been waiting for months they have to be patient. Truthfully, I have no idea when they are going to unload. I’ve been tap dancing so much on the phone these past few weeks, I feel like Sammy Davis Junior.”

Reid isn’t the only one struggling to meet commitments to clients, countless other builders are in a similar situation. Pomona-based builder Frank Druthers has been feeling the backlash on social media and Google. “Some customers are more understanding than others. We’re all relegated to waiting for these ships to unload,” said Druthers, “It’s an awful feeling being at the mercy of the ports but this is our reality right now.”

Adjusting to a New Reality of Rising Costs

Some builders have had more success than others at maintaining supply chains during the recent crisis. While some have been able to continue operating without much disruption, many others have had to adjust. The new norm seems to be paying higher than normal prices for shipping. In addition, the waiting time for receiving materials has gone up by months.

Paying More & Waiting Longer Is The New Norm

The average cost of shipping a container from Shanghai to Los Angeles is now $18,345. For those keeping score, that’s roughly six times higher than it was a year ago. One company recently got a quote from an ocean carrier for $32,000 for a single container. While rerouting may seem the best solution, that has gotten more expensive too. The average price for shipping a 40-foot container to the East Coast has gone up to $19,620.

What The Pool Industry Is Doing

During a Town Hall meeting, we co-hosted with the Talking Pools podcast, the subject of the ongoing logistic delays and cargo issues plaguing the industry came up more than once.

Alpha West representative, Korey Wax suggested that professionals that have established solid relationships with their distributors may have an easier time than those who haven’t. “Pool companies are relying on the relationships with individual branches,” said Wax, “The people that are really suffering are the guys that don’t have a relationship because they’ve been ordering off a web portal. When they go into a random branch, the manager and counter guys don’t recognize that individual so those supplies are magically not there because they are being reserved for their core customers.”

Lingering uncertainty about delivery dates is causing builders to settle for whatever alternative products are available. Out of sheer desperation, businesses are experimenting with new materials in lieu of products that have extended waiting times for delivery. Consequently, there are others that are willing to pay higher than premium prices to ensure that they have the materials on hand to accommodate demand.

Fake News – There Are Not 200,000 Cargo Ships Waiting To Be Unloaded

In a recent survey of builders, 90% reported being directly impacted by delays. However, in the same survey, 40% reported they believed the delays were inflated or overblown in the news. One false image that has been shared thousands of times on social media has definitely inflated the numbers. An image that went viral involved grossly misstated figures with misleading information. The image being circulated on Facebook said that there were over 200,000 cargo ships waiting to be unloaded in the U.S. This is obviously wildly inaccurate; there are less than 56,000 merchant vessels in the entire world, let alone 200,000 offshore.

Real News – There is a Container Crisis, Everyone Will Feel It This Holiday Season

Whether pool industry professionals believe they are directly affected or not, delays impacting prices is an absolute certainty. A wave of shipping consolidation over the past few decades means fewer alternatives. It is a fact that almost every single home in the United States depends on cargo that is arriving via the ports of Los Angeles or Long Beach. How much consumers ultimately pay is indirectly correlated to what is going on in the ports. Experts warn that consumers will almost undoubtedly see more out-of-stock notices, fewer deals, and longer delivery times this holiday season. 

What Caused The Bottle Neck

The bottleneck this year is due to an increase in imports. Consumer demand has shifted away from services and toward goods and home improvements. This has directly affected businesses’ ability to replenish supplies that were depleted last year during the early months of the pandemic. While analysts predict the situation to improve sometime in 2022, experts say the situation is bound to continue to get worse before it begins to get better.

Why We Can’t Just Re-Route Everything

Some of the builders we spoke to asked why container ships couldn’t simply be rerouted to the Gulf or the East Coast. This has been suggested by many observers who believe that the easiest recourse is to reroute cargo. Pragmatically, rerouting to New York and New Jersey is completely out of the question, their ports appear to be just as inundated. In a recent press conference, Governor Ron DeSantis invited ships to reroute and offload in Florida, which has several ports.

While some shippers have done so, that alternative can be extremely costly. Ultimately, most of the material coming in on these vessels is coming from Asia. Rerouting to alternate ports isn’t so cut and dry and typically adds weeks of additional transit time. Ships that opt to take a longer route face more expensive transit costs than shipping to the West Coast. The logistical issues of transporting that cargo with trucks cross country also becomes an inevitable issue that ultimately adds additional costs and concerns.

Realistically, there may not be a magic bullet or easy solution to the problem California ports are facing. Staffing problems unloading and transporting cargo have snarled traffic to a crawl in both directions. The container shortage has got to the point where Maersk (one of the largest shipping companies) recently sent notices to trucking and logistics firms pleading for the return of containers.