Now the tables have turned, and other ports face traffic jams
There is a record level of container traffic jams. Moreover, the industry is dealing with a backlog that continues to build each day. For example, up to 92 ships are stuck in queues that are littered across North American ports with Savannah accounting for 45% of the backlog . It is a mistake in these circumstances to only look at the big ports, such as Long Beach / Los Angeles, since they do not provide the full picture despite being the biggest container import gateways in America. Whereas these two ports have reduced the number of waiting for ships from a high of 109 at the start of the year to just 20, the overall trend in the industry is towards congestion.
Implications for logistics and international trade
Some analysts suggest that the current congestion among North American ports has re-entered record territory, especially regarding offshore traffic. It had been anticipated that the highs of February and January would represent the peak of the congestion. At that point, about 150 container vessels waited off the coastlines. However, about 70% of all those waiting ships were in Long Beach / Los Angeles. Now the tables have turned, and other ports face traffic jams.
By Thursday, it was reported that 153 ships were kept waiting. However, this time most of those ships were on the Gulf and East Coast ports. Another significant difference is that the earlier pileup on the West Coast was highly centralized. The visibility and publicity surrounding that phase of congestion meant that it was much easier to track or address. As a result, the current congestion is more evenly disbursed. That means it is not attracting as much attention, which may reduce the possibility of an early mitigation or intervention plan.
A new reality of significant delays at American ports
When port congestion seemed to be easing towards the end of May at the beginning of June, there was cause for optimism. Indeed, the queues had fallen back to within the double-digit margin. For example, 92 vessels waited offshore by the 10th of June. These were topped by Savannah in Georgia (25); Long Beach / Los Angeles (20); New Jersey / New York (18); and Houston (14). However, things soon took a turn for the worse. By the 8th of July, the queue had risen to 125 before hitting 136 less than a week later. By the 19th of July, 140 ships kept waiting. Currently, we are talking about over 150 ships caught up in the congestion.
Thursday morning brought daunting news from Marine Traffic which reports data on the position of ships. Savannah breaking record of 41 container ships offshore. Long Beach / Los Angeles was holding up 8. Houston was reporting 33. New Jersey / New York had 10. Vancouver in British Columbia had 16. Oakland in California had 15. Other ports collectively reported ten held ships. Indeed, queues were rising off Savannah and Vancouver. The East and Gulf Coasts ports accounted for 51 ships delayed. Both Houston and Savannah were reporting an upsurge in delays.
Significant differentials in waiting times across the time
Although the industry reported overall delays, the experience on each post differed. Vessels Value is a UK-based data provider and reported significant differences in waiting times when reviewing the top 10 terminals on the East Coast. Indeed, there were significant differences among terminals even in the same port. Four terminals on the East Coast were cited as examples of significant waiting times, including the New York and Elizabeth APM terminals in New Jersey / New York, the Savannah, and Garden City terminals at the port of Savannah.
Other ports were doing better in terms of waiting times, including the Maher and Port Newark terminals in New York/New Jersey. Another better-performing cluster included the Norfolk International and Virginia International Gateway terminals (Norfolk – Virginia). Similarly, the Packer Avenue terminal in Philadelphia was doing relatively well, and the Wando Welch terminal (Charleston – South Carolina) had relatively good waiting times.
Some experts blame port labor fears
There was speculation that fears concerning port labor may have instituted the shifts in waiting times. For example, the congestion in the East and Gulf Coasts picked up during June when new annual contracts were meant to start. This was also the last month of the West Coast labor contract that had been in place with the ILWU longshoreman union. Akhil Nair of Seko Logistics opined about the impact of early threats of possible ILWU strikes. This came when the West Coast was dealing with labor constraints.
Hence, there was an automatic shift in the contract season for those customers relying on traditional West Coast shippers. Some asked to be relocated to the East Coast, as a contractual hedge was bound to impact the operations of the shipping industry. Others posit that there may be an element of overcompensation. For example, the congestion on the East Coast has been associated with a shift in the supply chain design and the impact of those hedging for potential incidents. Alternatively, the hedging would focus on unpredictable/predictable activity on the West Coast and the associated incidents.
This is a crisis that is out in the open. For example, those visiting the beaches on Hilton Head Island are likely to witness large cargo ships on the horizon as they slowly make their way to the Port of Savannah only to wait for processing. This port is reporting days of 8 days. On Thursday morning, there were more than 40 ships from the likes of Liberia, Hong Kong, Portugal, and Singapore waiting their turn. The implication is that thousands of 20-foot and 40-foot containers are sitting out the wait. Soon the consumer will begin to feel the heat.