Import FAQ

Questions from importers…

imports port congestion

Is there an end predicted for cargo congestion?

Industry pundits do not have an end date for the current situation that’s affecting U.S. east and west coast ports, along with ports around the world. There are several factors that need to happen beyond industry control.

  • A decrease in consumer demand. U.S. retail sales continues to break records.
  • Stabilization of the labor workforce in all phases of freight forwarding, including dockworkers, truck drivers, rail yard staff.
  • The pandemic shifting to an endemic situation.

What are current shipment import trends?

LA/Long Beach ports: West coast labor negotiations begin the week of May 9. Workers say they will keep cargo flowing during the talks, stating the two sides are on good terms after cooperating during the pandemic-linked cargo surge. Automation appears to be the topic in question. As of March 29, the ship backlog in Southern California was below 50, but marine terminals tell JOC.com they expect the backlog to build again as ships delayed in Southern China due to COVID-19 restrictions join the queue off Los Angeles and Long Beach.

China: COVID-19 is impacting dockworkers, trucking and in turn port conditions. In Shanghai, manufacturers are resuming production and ports are open but full, with various delays and wait times, after the two-stage COVID-19 shut down. Shanghai shipments were diverted to Ningbo, thus affecting delays and full yard utilization there. A shipment surge on the West Coast is expected as workers return and port conditions in Asia stabilize.

East Coast Ports: Many shippers shifted imports to East Coast ports recently due to continued West Coast port congestion. This is creating new congestion challenges. Some carriers made unplanned cuts to East Coast port rotations in late March (the latest data available) due to this congestion.

European imports: Further impacting congestion, U.S. imports from North Europe in February grew 11.4% year over year to 141,482 TEU in February after rising 9% for the full year in 2021, according to data from PIERS, a sister company of JOC.com within IHS Markit.

Rail dwell times: West Coast port managers and terminal operators are urging the Class I railroads to immediately boost their deployment of railcars and locomotive power in Los Angeles-Long Beach, Oakland, and Seattle-Tacoma. In mid-April, 16,000 containers awaited rail transport at the Port of LA. Twice the number year over year with officials saying it is due to lack of equipment.

We keep hearing about disruptions related to shipments. What’s the latest?

Labor is a continuous challenge in the current economic and health climate, as noted above in relation to April’s COVID-19 outbreaks in Asian provinces. We are keeping a close eye on West Coast labor negotiations.

Other disruptions include:

  • Weather. This always plays a role in disruption.
  • Truckers. The demand for trucks, truckers and chassis was a challenge prior to the pandemic. The shortage has been exacerbated with port congestion and demand for trucks.
  • Warehouse. Space is in high demand as shipments arrive and await transport inland.
  • Empty containers. Empties sitting on docks instead of moving back into the supply chain also remain an issue that’s disrupting supply chains.
  • Conflict in Europe. Companies pulling out of Russia will impact all shipping space/allocations, from containers and tankers to dry bulk and gas transport.

Will shipping costs come down in 2022?

We do not expect the cost to ship to dramatically decrease. Freightos issues a weekly update. In the May 5 report:

  • Asia-US West Coast prices (FBX01 Daily) fell 19% to $12,596/FEU. This rate is 104% higher than the same time last year.
  • Asia-US East Coast prices (FBX03 Daily) decreased 7% to $15,973/FEU, and are 144% higher than rates for this week last year.

Are port operators or carriers doing anything to help the situation?

Yes, several ports began infrastructure improvement projects prior to the pandemic. Those projects continue and will have a long-term impact on the industry. At the beginning of 2022, we’ve started to see movement related to empty containers, with cooperation between carriers and creativity at the local level.

Containers
In January, carriers calling on LA/Long Beach have agreed to start hauling empty containers from competing lines back to Asia. This will help to clear container stacks at the ports. Last year Long Beach shipped 3.4 million TEU of outbound empties, an increase of 44.8% over 2019 and LA handled 3.9 million, an increase of 45.8% during the same period.

Port infrastructure

  • A $69 million infusion of federal funds will allow the Port of Virginia to begin work on the next phase of its dredging project, which along with other enhancements will allow the port to handle up to six post-Panamax vessels simultaneously in the coming years.
  • The Port of Charleston has been working to make truck operations more efficient for several years with a $1.2 billion capital improvement investment.
  • Georgia Ports Authority is accelerating the creation of additional container storage capacity in Savannah. In late September, over $34 million of investment dollars were approved to develop two parcels of land adjacent to existing facilities or expansion projects.

Truckers also are looking for new ideas to solve a long-term problem. We are seeing articles and hearing ideas from various partners about their plans to manage the congestion. Our trucker friends are looking to create trucker owned chassis pools instead of using the traditional leased chassis pool.

What are my options for planning shipments in the supply chain?

Plan ahead…Steamship line alliances

  • Consider future orders. Understand and know how the three steamship line Alliances work and their options. Diversify shipments within these Alliances. If one shipment experiences a delay, it’s likely a shipment on another carrier in a different Alliance will continue through transit. Use this infographic for information on Alliances.
  • Know the different port options available. LA/Long Beach is the most congested. Could a shipment move through the Panama Canal to the East Coast more efficiently?
  • Consider trucking from a different ramp. Midwest options: Louisville, Cincinnati, Chicago, Cleveland, Columbus, Detroit, St Louis.
  • Space is king. If you’re offered space, book it regardless of price.
  • Check out this article on our blog that outlines the current situation and recommendations.

Is air freight still an option to mix into the supply chain?
While it’s an option to move shipments faster, the cost has also skyrocketed. Relief in air freight rates early next year is not going to happen, according to consultants, analysts and data. The TAC index (provides independent, accurate and actionable global air freight data) for November saw rates increase 15% from October, with ex-China and Hong Kong seeing a 19% month-on-month increase. While both markets hit records to North America, beating even the Q220 PPE surge, China mainland only saw a 6% rise to Europe, while Hong Kong was up 22%.

If you have questions that are not asked and answered here,
contact your Cargo Services representative or our office directly.

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