AMERICAN PORT CONGESTION WORSENS

Written by Sam Chambers                                                              30/07/2021

Summer is proving to be fearsomely hot for dockworkers on every coast of America, working record volumes of boxes with ships forming long queues at many gateways as peak season arrives on what has already been a peak year. The grave situation has been made worse by strained rail connections inland and rollover effects from earlier disruptions such as the Covid outbreak at key Chinese export hub Yantian, which saw the port work at just 30% of capacity for most of June.

The number of ships backing up outside San Pedro Bay, home to the ports of Los Angeles and Long Beach, America’s two main gateways, is increasing towards record levels experienced earlier in the pandemic. Current anchorage times have also broached the five-day mark, hitting already dire carrier schedule reliability figures.

In a video press conference on July 14, Gene Seroka, executive director of the Port of Los Angeles, said, “The past 12 months have been like the peak season on auto-repeat.” Seroka expects the same to continue: “Key economic indicators all suggest that US consumer spending will remain strong through the remainder of 2021,” he said. “Fall fashion, back-to-school items and Halloween goods are arriving on our docks, and some retailers are shipping year-end holiday products early. All signs point to a robust second half of the year.”

Earlier this month, National Retail Federation president and CEO Matthew Shay said, “Heading into the back-to-school season, we expect record sales as families purchase electronics, shoes and backpacks for in-person learning this year. However, as the drop in monthly auto sales indicates, retailers are facing product shortages and supply chain constraints.”

The Marine Exchange of Southern California tracked 28 boxships yesterday at anchorage waiting for berth space to open up at the twin ports, while further north a cluster of vessels are bunched together east of San Francisco waiting for available dock space at the key northern Californian port of Oakland.

Elsewhere on the east coast, Savannah, which has been battling sizeable ship queues all year, sees 16 ships at outer anchorages in the Atlantic.

Further, south a host of ships are lined up outside Houston, which suffered what it described as a hardware failure of its storage devices resulting in two box terminals being closed for four days through to Thursday afternoon.

In a new report, Fitch Ratings suggests port congestion will persist through the remainder of this year and possibly into 2022.

“Outbreaks of coronavirus variants that lead to revived restrictions and further shutdowns along the supply chain may further affect volumes. Margins could be pressured if congestion persists well into 2022 with decreases in yard efficiency and increases in labor costs,” the Fitch report warned.

Source: Splash247.com