Supply chain outlook and port updates
The queues outside of ports for vessels to berth is only one indicator of the clogged supply chain, but the one that is most easily measured. More systemic issues such as trade imbalances and inland infrastructure are at play, especially in the US market and in particular on the transpacific trade.
Over decades, shipping volumes have followed the lowest price, leading to larger container ships to deliver more capacity at once. The downside of this shift is the extreme pressure it puts on landside operations at ports, inland depots and warehouses.
With the unexpected swing in buying patterns during the past few years, the trade imbalance in the US (we have more imports than exports) has almost doubled and the ability to move cargo in and out has been slowed by equipment shortages and labor supply in all sectors of the supply chain.
This doesn’t bode well for a quick recovery. Improved transport flow would require a reduction in imports (consumer spending), better trade forecasting, consistent labor availability, and long-term investment in transport infrastructure.
New York – New Jersey
Vessel waiting times at the Port of New York and New Jersey and are averaging up to 3 days at APM terminal and between 1-3 weeks at PNCT terminal due to high import volumes and congestion as more import cargo has been routed to the East Coast.
This is having a significant impact on drayage operations, in particular the availability of empty container return locations.
Los Angeles / Long Beach
The wait time for containerships outside of Southern California ports is averaging 19-20 days with 39 vessels waiting off-shore. Volumes are expected to increase in June as the transpacific trade recovers as Shanghai reopens.
Hamburg Süd issued a customer advisory that due to continued congestion, the likelihood increases of the Port of Los Angeles / Long Beach implementing their Container Dwell Fee, which has previously been postponed since last November. Currently this charge is on hold until review again on June 3rd, 2022. Note this charge is separate from individual terminal container dwell fees. More details on terminal fees here.
The port of Oakland has opened up a pop-up yard at Howard Terminal intended to assist with the pickup of empty containers (CMA-CGM, Hapag, ONE, Wan Hai) and provide contracted storage for loaded export containers waiting for vessels. The US Department of Agriculture (USDA) is developing an incentive for exporters and will host a webinar soon. At present the USDA incentive amounts are not able to offset the trucker standby charges due to the yard waiting time and trucker line. While we welcome new initiatives to help support the staging of export loads as needed, it will take some time for the carriers and terminals to increase the operational accessibility and feasibility of this option.
Posted vessel wait times for more ports are published weekly in the link below or on Hillebrand’s website.
US West Coast Port Labor (ILWU)
The current master contract for port labor (ILWU) at all US West Coast ports is set to expire on July 1st, 2022. Negotiations started in early May but the main talks have been suspended from Friday May 20th to June 1st, 2022. The Journal of Commerce cited multiple sources that the ILWU requested the temporary break, but did not indicate the reason or respond to requests for comments. Port of Los Angeles executive director Gene Seroka indicated that stakeholders should not rush to conclusions with this new development. We will continue to provide updates when released.
Trade Lane Forecasts
In case you missed it, forecast information by trade lane, including details on space availability and ocean rate trends in the April Trade Dashboard has been published on Hillebrand’s website here.