Port Congestion In The World
From Dilara Dayioglugil, SODAC
October 4th, 2021
October is the busiest month of the year when it comes to traffic at the major U.S. container ports. Although this is an expected case every year, global supply chain crisis for container shipping is becoming an irreversible problem. The main reason is because congestion tends to move from ports to ports along capacity-constrained supply chains. It is estimated that at least the busiest seven ports face congestion regularly due to domino effect. For instance, congestion at U.S. West Coast (LA/LB) ports may be temporarily relieved with less ships coming from Asia to the U.S. However, congestion on the US West Coast will likely re-emerge as restrictions in Asia ease.
Since the beginning of the year, 2021:
1. Southern China
2. U.S. West Coast (Los Angeles and Long Beach)
3. U.S East Coast, Port of Savannah
4. Port of Seattle
5. UK (Tracking Shortages)
Additionally, the long waits at the ports during the pandemic, the extended service times, China's recovery in a faster-than-expected time , and the rapid increase in demand in the USA caused a capacity problem in the logistics industry. This situation disrupted the supply chain and led to the inability to prepare as many empty containers as necessary at the required place and time. The work of port, warehouse and truck companies with missing personnel due to the pandemic and the lack of additional ships also increased the problem.
H/T : The Economic Times
Port congestion, poor schedule integrity and container imbalances are making headlines but there are also other causes that are varied and complex and it is needed to be addressed -- labor disruptions, cargo surges from big ships, infrastructure needs, marine terminal productivity, and equipment shortages, demurrage.
Although in February, there may be a slowdown in demand due to the New Year holiday in China, which may give the shipping industry the opportunity to melt the accumulation, the need to replace dwindling inventories may make the usual four- to six-week break in cargo volumes during the New Year's holiday in China less possible. Moreover, ports consider that extending gate hours will create a solution, that only addresses part of the problem. Many operators and customers of maritime supply chains must cope with these times of constant shock, disruption and high uncertainty.
H/T : Global Maritime Hub
Logistics industry has few options to get back to normal.
1. Increasing the pool of equipment to have spare capacity (not efficient and it is costly)
2. Existing capacity to handle a larger volume of cargo
3. Slot management can ease the pressure
5.Transportation Demand Planning
The solution here is much more tightly connected with the inland situation - it will be useless to take the cargo to the port, unless there is enough truck, chassis and railway capacity, as well as storage space to move the cargo away from the ports.
If you need any consultancy during these the busiest times of the year, please feel free to reach out SODAC LAW.
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