Holiday Import Surge Cements Congestion at Ports on the U.S. East Coast

Holiday Import Surge Cements Congestion at Ports on the U.S. East Coast

November 24, 2021

Persistent backlogs at the west coast port complex of Los Angeles and Long Beach and heightened consumer demand in recent months have spread port congestion to key ports on the U.S. east coast, namely the Port of Savannah in Georgia and the Ports of New York and New Jersey in New York State.

Logistical challenges at the ports of Los Angeles and Long Beach have been intensifying amid persistent cargo congestion driven by pandemic-related shifts in transport operations, such as unpredictable COVID-19 outbreaks at transport hubs and manufacturing sites and an increase in imports due to high consumer demand. As a result, waiting times for vessels wanting to berth at the United States’ biggest seaport have reached 25 days in recent weeks. To avoid prolonged shipping delays, carriers have pivoted shipments to alternate ports, but delays at ports up and down the west coast and growing congestion at the east coast alternates have cemented the gridlock that shippers face. The continuation of peak season to stock up on inventory ahead of the holiday season that has been underway since August and high consumer demand in the run-up to Christmas will continue to bring high import volumes to the nation’s ports that will further exacerbate the existing congestion, resulting in further shipping disruptions that will last well into 2022.

Cargo backlogs on the west coast to persist amid record-breaking import volumes

On the U.S. west coast, the Ports of Los Angeles and Long Beach, also known as the San Pedro Port Complex, have been facing a record-breaking surge in cargo. Consumer demand began to skyrocket during the pandemic and is only expected to increase during the holiday season. Container handling had already increased by 30 percent at the Port of Los Angeles and by over 20 percent at the Port of Long Beach than what would be expected to arrive at this time of year by August 2021, the beginning of what is normally considered peak season for inventory restocking ahead of the holidays. The port complex has also faced intermittent labor shortages because of COVID-19 outbreaks and health restrictions intended to curb them, which have negatively impacted productivity at the ports throughout 2021.

By mid-November, the port complex continues to report record-breaking container throughputs, with more than 80 ships queuing offshore waiting for a berth. At the same time, vessel waiting times jumped to 12-24 days at the Port of Long Beach and 18-25 days at the Port of Los Angeles. Amid rising public scrutiny, a range of mitigation measures have been proposed in recent weeks, including a switch to 24/7 operating hours and the easement of weight restrictions on trucks moving goods across the state of California to reduce dwell times at terminal yards. However, it is likely that the congestion issues and processing delays at the port complex will persist for at least the remainder of the year as carriers and port authorities struggle to reduce the existing backlog while heightened consumer demand continues to drive increased traffic to the ports.

Figure 1: Waiting times at the San Pedro Port Complex, California, from August to November 2021. Source: Everstream Analytics

Meanwhile, other major west coast seaports have also been grappling with persistent congestion, offering little relief for strained global supply chains connecting this side of North America with transportation and manufacturing hubs in Asia and beyond. As of mid-November, vessels still face waiting times of up to 18 days at the Port of Seattle in Washington State, after reaching a peak of up to 30 days in October, while ships arriving further north at the Port of Vancouver in British Columbia have been waiting an average of up to seven days for a berth. The latter will also face additional delays in the weeks to come following operational disruptions to rail and truck movement in and out of the port area amid severe flooding across British Columbia, which is likely to worsen existing backlogs at the port. As a result, a range of ocean carriers such as Maersk, MSC, Hamburg Süd, Hapag-Lloyd, ONE, Yang Ming, and HMM decided to omit stops at these ports to avoid prolonged delays along their shipping routes between Asia, North America, and Europe.

Congestion and delays intensify at U.S. east coast ports amid high demand and lack of alternatives

The unprecedented demand and persistent backlogs at U.S. west coast seaports have also contributed to the rising congestion issues and processing delays at some of the busiest seaports on the east coast. Amid a spike in demand, and equipment and labor constraints, cargo movement has now slowed to a trickle.

At the Port of New York – New Jersey, the second busiest seaport in the U.S., queues of ships waiting for a berth reached an all-year high by the end of September, with double the normal number of ships anchored outside the port amid growing landside congestion and delays in moving containers out of the port area. During these peak congestion times, the port reportedly faced up to two to three weeks of delays for inland haulage dispatches for both imports and exports. By mid-November, vessels were also facing waiting times of up to 24 hours for a berth amid continuously high demand.  

As of October, extra ships were arriving at the port to pick up empties to alleviate yard congestion. However, many ocean carriers still limit the number of empty containers they will accept, forcing truckers to find other space in the yard to drop off empties. Truck drivers also need to find additional chassis capacity for the import containers as the empty ones typically remain on chassis, resulting in a notable loss of driver productivity. A representative of a trucking company pointed out that these additional steps required during the lockout of empties can increase the duration to get an import load at the port from one to two hours to around four hours instead. In the month of September, carriers did not accept empty containers for twelve days of the month, a notable increase from five days in July and three days in August amid the growing congestion at the port. HMM reportedly enforced the highest number of lockouts, blocking trucks from returning empty containers for ten days, with Yang Ming following with a total of four blocked days during the same period. CMA CGM, ONE, and Maersk also warned their customers about a lack of space for returning certain types of containers.

As a result of continued delays, truckers who do not show up for an appointment to pick up import containers will be charged a USD 62.49 administrative fee from October 1 as part of a three-month pilot program meant to improve efficiency and speed up the movement of goods in and out of the container terminals, but the results of the initiative are still pending at the time of writing.

Port of Savannah grapples with unprecedented volumes of import cargo in the run-up to Christmas

Already the fourth busiest U.S. seaport, the Port of Savannah has experienced a record volume of container traffic coming into its harbor, particularly in the latter part of 2021, as many carriers sought to avoid congestion at other ports. Although it is one of the few ports on the east coast with infrastructure in place to handle large container ships, the limits of the port’s capacity have become stretched as container traffic soared.

By mid-October, the number of containers at the port was around 50 percent higher than normal at this time of year, with as many as 80,000 containers sitting at terminals across the port area. As a result, high container stacks now line terminal yards far inland. In September, several thousand containers had remained at the port’s docks for at least three weeks, while around 700 containers had been left there for more than one month going into October.

According to congestion data compiled by Everstream Analytics, vessel waiting times have been consistently climbing upwards for several months from around five days in August as demand spiked when peak holiday shipping season got underway. Although the Port of Savannah boasts a total of nine berths for container ships, vessels now face average waiting times of eight days before they are allowed to enter the port, with as many as 20 ships queuing outside the port up to 17 miles off the coast during peak congestion periods.

Figure 2: Waiting times at the Port of Savannah, Georgia, from August to November 2021. Source: Everstream Analytics.

However, immediate relief is not in sight at the Port of Savannah. In August, the Governor of Georgia announced that regulations pertaining to trucker driving hours and load weight restrictions were being eased to help combat the surge in cargo, but longer hours and heavier loads have been unable to overcome the unprecedented mass of containers.

The mounting delays and congestion have also led ocean carriers including Hapag-Lloyd, CMA CGM, Ocean Network Express (ONE), and Yang Ming to announce port omissions on scheduled sailings to Savannah. Some carriers have opted to skip the port entirely, while others are skipping it in one sailing direction only. To avoid delays in Savannah, several carriers have also begun pivoting vessels to the Port of Charleston in South Carolina and the Port of Jacksonville in Florida. However, these smaller ports are less equipped to handle both the size and container capacity of larger ships, thus offering relief only to a limited number of vessels reaching North America. As of November, the former is also facing growing congestion, with 2.5 days of waiting times reported at the Port of Charleston amid the high demand.

Furthermore, while port omissions and alternative calls can improve schedule reliability for carriers, they come at an additional cost and ad hoc changes to shipping routes for customers, who are forced to move their cargo across longer inland transport routes to reach their scheduled destination. The result is that delays for east coast shipments are increasingly likely as pressure at its two busiest coastal entry points continues to grow.

Congestion at U.S. east coast ports likely to persist throughout the remainder of 2021

In addition to a range of short-term measures such as new rail tracks and temporary container yards, local and federal authorities also announced long-term plans to expand capacity and resources at the affected ports to ease congestion. For example, authorities at the Port of Savannah approved a budget of USD 34 million to expedite an infrastructure plan that would add around 1.6 million TEU to the port’s capacity. However, much of the permanent capacity increase will not be available until 2023 at the earliest – far too late to solve the port’s current problems.

With no quick fixes available, shipping disruptions in the run up to the holidays will likely escalate at U.S. east coast ports. COVID-19-induced labor shortages at transportation hubs will also pose a latent risk to shipping operations. As U.S. ports continue to experience an influx of delayed vessels in addition to those already scheduled, resources will likely not be sufficient to curb growing congestion levels.  

Companies dependent on shipping continuity through U.S. ports still have several options at their disposal to mitigate cargo delays.

  • Use intelligence monitoring tools to increase awareness of and decrease response times to pandemic-related developments and restrictions in key manufacturing and transport hubs that could result in production and delivery delays along your supply chain at the earliest opportunity.
  • Consider using alternative shipping modes, such as air freight, for time critical shipments to avert costly delivery delays or re-route ocean shipments to smaller seaports in the U.S. and neighboring countries from where they can be moved inland via rail and road transport. Using transportation planning capabilities allows companies to assess the risks associated with key routes and decide whether an alternative form of transport is better suited to ensure on-time and in-full delivery of critical goods.
  • Use supplier risk assessment tools to map supply networks and assess the effectiveness of implementing dual-sourcing or re-shoring strategies that make use of geographically diverse supplier and manufacturing locations to shorten shipping distances, where possible, and minimize the impact of cargo bottle necks.

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