“The ports shutting down is worse than Lehman Brothers failing. Both can lead to catastrophic failures of all counterparties depending on them. But with Lehman, the government could just print tons of money to flood the banks with liquidity,” Ryan Petersen, chief executive officer of logistics company Flexport, warned Friday after touring logjammed U.S. West Coast ports.
Petersen said his firm hired a boat captain to tour Los Angeles and Long Beach ports, which account for 40% of all shipping containers entering the U.S. He said during the three-hour loop through the ports, passing every single terminal, “we saw less than a dozen containers get unloaded.”
He said the twin ports have hundreds of cranes but only “seven were even operating and those that were seemed to be going pretty slow.” He said the bottleneck that everyone now agrees on is “yard space” and that “terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.”
“The bottleneck right now is not the cranes. It’s yard space at the container terminals. And it’s empty chassis to come clear those containers out,” he said.