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U.S. ports face mounting congestion

Concerns grow that the ILWU and West Coast employers won’t be able to reach a deal without a work stoppage as both sides appear to be deadlocked. Despite the lack of progress, neither side has hinted that an impasse is developing. Concerns and hesitancies around the viability of West Coast ports have continued as more cargo flows are being directed to East and Gulf Coast ports.

Recent Biden administration involvement in negotiations with Class-I rail companies and over 125,000 rail workers suggest that politicians will not allow significant disruptions to occur in critical supply chain network in the event of an impasse in labor negotiations. The Executive Director of the Port of Long Beach Mario Cordero said this week that he believes the government will step into the ILWU-PMA negotiations in a similar fashion to the administration’s involvement in the railway dispute if negotiations fail. However, government officials are unlikely to get involved unless a significant disruption is threatened. If the ILWU and PMA continue negotiations without threatening disruptions, months of uncertainty will plague West Coast ports.

The labor negotiations have made East and Gulf Coast ports an attractive option, even amidst record congestion at many of the larger ports. East and Gulf Coast terminals and storage facilities have been unable to keep pace with the volume increase and many storage areas are at or exceeding capacity.

Figure 1: Daily count of waiting cargo vessels outside major North American ports, 2022 (source: Everstream Analytics).

The Port of New York and New Jersey has struggled with an excess of lingering containers and recently proposed a long-dwelling container fee if companies do not remove a certain threshold of empty containers from the port every quarter. While the proposed fee has been delayed, carriers have already responded by clearing empties from the ports between July and August, with more clearing planned by the end of October. Removing lingering containers has the potential to increase chassis availability and free up storage space to improve offloading and loading efficiency at the complex.

Figure 2: Weekly average of waiting times for major North American ports, 2022 (source: Everstream Analytics).

Landside operations at East and Gulf Coast port are still hampered by low chassis availability and high congestion at inland rail facilities. Rail carriers face high volumes of cargo at terminals in Chicago, Memphis, and Kansas City and have been unable to absorb the increase in East and Gulf Coast cargo flows. These inland areas handle the bulk of intermodal movements from East Coast ports Savannah and New York-New Jersey and are likely to continue to see high levels of cargo. Capacity levels could begin to show signs of improvement by 2023 as supplies of intermodal equipment will catch up with projected softening demand.

Waiting time trends 

Waiting times fell at West Coast ports with the Port of Los Angeles standing at 10 hours (0.4 days) on average and average vessel counts increasing slightly to six. The low wait times continue to highlight lower cargo levels at West Coast ports throughout 2022. The Port of Seattle also reported low figures, with average waiting times of five hours (0.2 days) and average vessel counts of two. The Port of Vancouver recorded an increase in waiting time to 2.6 days on average and average vessel counts of 14. West Coast ports have the lowest combined waiting times as well as the lowest combined vessel counts for ports on any North American Coast.

On the U.S. East Coast, the Port of Savannah reported heavy congestion, while the Port of New York-New Jersey reported slightly higher waiting times of 1.7 days. On the U.S. Gulf Coast, waiting times fell at the Port of Mobile to 3.9 days, and waits at the Port of Houston increased to 3.9 days.

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