Leaders of some of the busiest ports in the United States expect seaway congestion to continue until next year, as the sinking of goods by manufacturers and retailers looking to replenish depleted inventories pushes the usual seasonal steps of maritime transport.
Ports are already flooded by a record number of containers arriving off the coast of the United States during this year’s high shipping season, and the number of ships waiting to dock at southern California’s gateways is growing as logjams spread to warehouses and distribution networks across the country.
Port leaders, such as Mario Cordero, executive director of the port of Long Beach, California, who have spoken to shipping lines and their cargo customers, say the deceleration in container volumes that usually coincides with the lunar new year in the February, when China’s factories usually close and are unlikely to offer much relief.
“I don’t see substantial mitigation in terms of the congestion that major container ports experience,” Cordero said. “A lot of people believe it will continue during the summer of 2022.”
Griff Lynch, executive director of the Georgia Ports Authority, which operates one of the nation’s largest ocean ports in the port of Savannah, said: “We believe that at least mid-2022 or the whole of 2022 could be very strong.” .
Major U.S. ports were expected to handle the equivalent of about 2.37 million containers imported in August, according to the Global Port Tracker report prepared by Hackett Associates for the National Retail Federation. The figure is the highest for any month in records dating back to 2002, and NRF projects global entry volumes for the year will reach 25.9 million containers, measured in units equivalent to 20 feet. This would break the record of 22 million boxes in 2020.
Ports have become one of the many bottlenecks in global supply chains as ships are filled with boxes carrying electronics, home furniture, holiday decorations and other goods.
Hundreds of thousands of containers are trapped aboard container ships awaiting a mooring or stacked at terminals waiting to be moved by truck or rail to inland terminals, warehouses and distribution centers. When boxes move, freight railroad yards and full-capacity warehouses are often abandoned.
Bob Biesterfield, CEO of CH Robinson Worldwide Inc.
North America’s largest freight broker said the lack of truck drivers and warehouse workers worsens shipping delays, as the need to replenish inventories is maximum. “I don’t think this will be resolved in the next four or five months according to the lunar new year,” he said.
Congestion has contributed to the global shortage of shipping containers and increased shipping costs. The logjam urged the Biden administration to appoint a port envoy last month to address how to improve cargo handling following complaints from U.S. companies that were short of inventory, shipping delays and rising costs.
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Congestion has been worse in neighboring Los Angeles and Long Beach ports, which account for more than a third of all U.S. maritime imports. Forty or more ships have been at anchor off the coast there on a given day in recent weeks, according to the Southern California Marine Exchange, a pandemic-era record. Before the pandemic, a single ship anchored was unusual.
Gene Seroka, executive director of the Port of Los Angeles, said seafront congestion could worsen as the peak holiday shipping season continues. The port has broken container handling records for 13 consecutive months. Seroka said the terminals expect to handle 35% more incoming containers the week beginning Sept. 5 and 80% more incoming containers the following week compared to the same periods last year.
The increase is being driven by Americans diverting their spending from services such as restaurants and vacations to home improvements, office supplies and other consumer goods. Port leaders say importers are also being supplied with additional inventory after supply chain shortcomings just in time were exposed in the first weeks of the pandemic.
Sam Ruda, port director of the New York and New Jersey Port Authority, said the logjams could only be broken when the Covid-19 pandemic falls. “This is really what will inform you of the duration of what we are seeing on the ground today,” he said.
Write to Paul Berger to [email protected]
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