26 January, 2023

Bukele alludes to shortage crisis in El Salvador due to global cargo transport problems

Ship waiting to unload in Port of Oakland.
photo VD: Alberto Barrera.

By Alberto Barrera

Pittsburg, California - El Salvador's President Nayib Bukele warned Monday that the cargo transportation crisis, that has caused supply delays globally, would generate a dangerous shortage of goods and rise in prices in the country.

“Beware of consumer demand for the holidays. If the supply chain crisis is not addressed, we will see a major shortage of goods and, Consequently, more inflation ", Bukele said in a tweet.

The pandemic generated delays in the delivery of products from Asia since last year due to the closure of factories, borders and restrictive measures around the world which was notable in December. In March the effect was greater with the jam for a week of a huge cargo ship in the Suez Canal that prevented the delivery of products in Europe. Freight transport was also facing a shortage of containers.

Cargo ship in San Francisco bay. photo VD: Alberto Barrera.

Bukele raised the issue when commenting on a note from the US television network CNN that said a three-day winning streak of US stocks ended on Friday., despite the fact that the three main indices of the Dow finished in green and it was "their best week since the end of June. The Dow is only one 2 % below the historical maximum reached in August ", said the business report.
And to that Bukele published another tweet in which he argued that “Wall Street just doesn't get it.. The earnings are not 'real', it's just more money that is issued with the same amount of shares. "

Then he forcefully explained: “A real crisis is looming in the SUPPLY CHAINS!! products, ports, combustible, boats, trucks, factories, workers, parts, means. It's right in front of us!”

In the San Francisco bay there are huge cargo ships parked due to jamming in the port of Oakland and many in the world, which according to experts is a supply crisis because the ships do not unload their freights due to the lack of containers and "chassis" on which they rely to take them to places where they are transported by trucks to their destinations.

The expert warning is that the most severe effects would be in poor countries and in economies that depend heavily on imports., especially to retail companies.

Carlos Barrera placeholder image, logistics advisor in El Salvador, told Voice of the Diaspora that because China has a 40 percent of world production exerts an important weight in global trade and that when facing problems due to the pandemic and then the crisis of lack of containers generates a chain effect.

Carson, California. Trucks lining up waiting for loads.
photo VD: Oscar Sandoval.

"By missing a link in the supply chain, it becomes more difficult to meet the demands and since the COVID-19 pandemic, the supply chain has been lost", he said but clarified that in the closure China continued to produce, although it did not have enough containers "to meet the demands" when many countries reopened activities.

He also alluded to the case of land transport that faces problems due to the delay in the departure of cargo at ports and prices have increased.
"Difficult situation is seen and felt in cargo transportation", said Oscar Sandoval, a middle-aged Salvadoran-American living in Los Angeles, who for six years has been driving his huge trailer within the United States, sometimes from coast to coast.

"Trucks making slow lines and long waits are made, Empty yardas (huge fields for trucks and loads), workshop without having to repair because there is no chassis (a platform on which a fork is mounted to move it onto trucks)”, He said.
He explained that the chassis that are needed "are with a container somewhere in the company so that they can be unloaded" and also how "the staff has reduced the unloadings are slower", He held.

"The hope is that when those ships fill the ports with merchandise there will be a lot of work and the prices will be very good", But it is just what worries Central American exporters who have been alerted to the high costs of maritime freight.

But Barrera said that the sector of logistics companies that assist exporters has found that there are no longer ships available to transport cargo until the beginning of January. 2022.

Carson, California. Trucks waiting to mount their loads.
photo VD: Oscar Sandoval.

"The export sector is being affected by the global crisis that has caused an increase in transport prices" and thus the competitiveness "of low-value and high-volume goods., since in many cases the value of the freight is equal to the value of the product ", Fecaexca said in a statement that brings together exporter associations from the five Central American countries, Panama and Dominican.

The BBC in London alluded in an analysis to the excessive increase in freight prices and compared that “in September 2020 Moving a freight from China to the United States cost USD $4, 469. One year later it costs USD $20,615. In one year the price has more than quadrupled. "

Barrera cited the case of the port of Los Angeles where he said that there is an average of 75 freighters stopped, what Sandoval responded to him in a chat that we maintained that “yes, yesterday I loaded into Long Beach and was hit by boats ". The same happens in the port of Los Angeles saturated with ships waiting to unload the transported products.

Land freight transport is also in crisis due to fuel prices, mainly in California, and besides there are not enough trucks. The prices of these vehicles have skyrocketed in the US market. “Here there has been a phenomenon that there are no trucks to buy and the few that there are, the prices went through the roof., and if you want a new one, they ask you for a year to deliver it ", He said.

From London the news chain "CNN Business" confirmed the current crisis around the world. “The cost of shipping is skyrocketing” and “that's worrying news for retailers and shoppers., especially for the Christmas season ", He said.

The problem is global and multi-factorial, and it is not known how long it will take to resolve., although all linked to the COVID-19 pandemic which is not known when it could be controlled.

Cargo ship passes area and intense mist under the Golden Gate Bridge. photo VD:Alberto Barrera.