The United States faces a stream of international trade that will weigh on earnings. U.S. ports have been among the busiest in the world, but a slowing economy and a race to complete new projects have forced a race to complete new projects, and a slowing economy has forced a race to complete new projects.
The ports of Los Angeles and Long Beach are seeing far more containers than they can handle this year, which could cause shipping delays that extend into the United States’ future.
The Reuters article below talks about the first port slowdown on the U.S. West Coast in 17 years, and this slowdown extends far into 2022, likely causing logjams for ship deliveries on the West Coast until after the 2020 Presidential election.
As the surge of products from manufacturers and retailers seeking to replace depleted stocks extends beyond shipping’s typical seasonal lulls, leaders of several of the biggest U.S. ports anticipate congestion choking marine gates to persist far into next year.
During this year’s peak shipping season, ports are already swamped by record numbers of containers arriving in the United States, and the number of vessels waiting for berth space at Southern California’s gateways is growing as logjams spread across warehouses and distribution networks across the country.
Port officials, such as Mario Cordero, executive director of the Port of Long Beach in California, who have spoken with shipping lines and their cargo customers, say the drop in container volumes that usually coincides with China’s Lunar New Year in February, when factories shut down, is unlikely to provide much relief.
Mr. Cordero said, “I don’t see significant alleviation with respect to the congestion that the main container ports are facing.” “A lot of people think it will last until the summer of 2022.”
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“We believe at least halfway through 2022 or the whole 2022 may be very strong,” said Griff Lynch, executive director of the Georgia Ports Authority, which runs one of the nation’s biggest maritime gateways at the Port of Savannah.
According to the Global Port Tracker study published by Hackett Associates for the National Retail Federation, major U.S. ports were expected to handle the equivalent of 2.37 million imported containers in August. The number is the highest for any month since records began in 2002, and NRF estimates that total incoming volumes for the year will total 25.9 million 20-foot equivalent units. That would shatter the previous high of 22 million boxes set in 2020.
As ships load up with boxes carrying electronics, home furnishings, Christmas decorations, and other products, ports have become one of several bottlenecks in global supply chains.
Hundreds of thousands of containers are stranded on container ships waiting for a berth or piled at ports awaiting transport to inland terminals, warehouses, and distribution hubs by road or rail. When the boxes do move, they are frequently snarled in congested freight rail yards and overflowing warehouses.
According to Bob Biesterfield, CEO of C.H. Robinson Worldwide Inc., North America’s biggest freight broker, shortages of truck drivers and warehouse employees are exacerbating shipment delays at a time when the demand to replace stocks is at an all-time high. He added, “I don’t believe it’s something that gets repaired in the next four to five months in line with the Lunar New Year.”
Congestion has led to a global scarcity of shipping containers and skyrocketing maritime freight prices. Following concerns from U.S. companies experiencing inventory shortages, shipping delays, and increasing prices, the Biden administration appointed a ports envoy last month to explore ways to enhance cargo flow.
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The Los Angeles and Long Beach ports, which handle more than a third of all U.S. seaborne imports, have been the most congested. According to the Marine Exchange of Southern California, forty or more ships have been waiting at anchor off the shore there on any given day in recent weeks, a pandemic-era record. A lone ship at anchor was uncommon before the epidemic.
The oceanside congestion, according to Gene Seroka, executive director of the Port of Los Angeles, may increase as the high holiday-shipping season continues. For the 13th month in a row, the port has smashed cargo handling records. In comparison to the same dates last year, ports anticipate to handle 35 percent more incoming containers the week starting September 5 and 80 percent more inbound containers the following week, according to Mr. Seroka.
Americans are moving their spending away from services like restaurants and vacations and toward home renovations, workplace equipment, and other consumer items, which is driving the increase. Importers are also storing up on extra goods, according to port officials, after the flaws in just-in-time supply chains were revealed in the early weeks of the epidemic.
The logjams may only be broken when the Covid-19 epidemic is over, said to Sam Ruda, port director of the Port Authority of New York and New Jersey. He said, “That’s basically what will influence the length of what we’re witnessing on the ground today.”
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Paul Berger can be reached at Paul.Berger@wsj.com.
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The U.S. ports are firmly entrenched in the process of reinventing themselves to keep up with the ever-evolving shipping industry. With the recent announcement that the Port of Los Angeles (which handles more than 30 percent of imports) is now installing an automated customs clearance system, port officials are well aware that the next step is fast-tracking the implementation of an automated cargo filing system.. Read more about los angeles port congestion today and let us know what you think.
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