The Rise and Fall of Congestion at Ports

Nothing’s a bigger head scratcher this week for BCO’s and shippers at the TPM22 conference in Long Beach, than why ocean carriers decided to deploy bigger ships without consulting hub ports on if they could even handle them in the first place. If you’ve been wondering why congestion was still piling up, it’s because the ship sizes on the Asia-USWC route can pinpoint the upgrade at the San Pedro Bay terminals. The vessels jumped from 6,000 Twenty-foot Equivalent Units (TEU’s) to 10,000 TEU’s and over. 

Ships waiting off LA and LB fell to about 60 vessels recently from the 100 or more they were, but a new surge of demands due to a rebuilding of inventory are moving from the record low levels, to ridiculous highs again in the coming weeks. Because of the delays, some ships in the LA and LB terminals went from waiting for 20 days as an average berth, to up to 2 months before getting permission to unload cargo. Halloween costumes were arriving at Christmas, advent calendars being de-vanned from containers in February, creating a madhouse for a while there. 

On the second day of TPM, Jon Pocari, port envoy of the White House said all of the system needed work, and that 24/7 terminals were a goal to be worked towards. That, unfortunately, is a long way to go, given the shakiness of the third shift. Due to this inability to offer sustainable 24-hour working ports, the hub terminals of North America are estimated to be operating at a third below productivity levels of the equivalent box ports in Asia and Europe.

The new ‘trade war’ between US and China that resulted in the Chinese new built chassis manufacturing source being cut, in favor of domestic construction, was deemed not such a good idea by US lawmakers, adding to the hindrance of operations from ship to terminal to truck or rail. 

Despite the dock and landside congestion afflicting the USWC ports the pressure is building on the BCO’s with the overshadowing threat of protracted labor contract negotiations to replace the agreement which expires on July 1st. 

Here at Nelson, we are keeping an eye on these broiling situations and steadily keeping you up to date with the rise and fall of congestion in the ports, and what is making the conflagration spread. We will strive to aid when we can to ease said congestion where possible. Meanwhile if you have any questions, please contact your Nelson representative today.