Another year of difficulty and uncertainty in logistics is drawing to a close – but as we move through what might usually be the busiest peak season of the year – the message in shipping is more of the same, as tight capacity and high levels of port congestion have become the norm.
In the face of this situation, having the latest information can help you navigate uncertainty. So, let’s take a look at the current transpacific shipping headlines.
Port congestions: Over 80 vessels waiting to dock at Los Angeles and Long Beach ports
Currently there are around 80 vessels anchored waiting to berth at the Los Angeles (LA) and Long Beach (LB) ports, with an average wait time of between 18 and 24 days. This means more than 200,000 cargo containers are currently waiting to dock at these major ports for global trade.
But it is not just the Californian ports feeling the strain right now. The Port of Seattle is still averaging around 21 days wait time – as bottlenecks at shippers’ warehouses impede the pickup of import containers and cause yard congestion.
In an attempt to keep operations moving and fluid, the terminal requires a double transaction on all empty returns; but this has placed additional pressure on chassis availability in the area.
"As volumes into North America have soared and remained extremely strong since the end of last year, it has put a lot of pressure on all the supply chains, ships, terminals, trucks, chassis, rail and warehouses. We have opened off-dock depots in the past months, increased our truck and chassis capacity, and worked with terminals for longer opening hours and dedicated gates. We need to continue this drive as some work is still to be done. We also encourage our ocean customers to pick up their containers from the port as soon as possible to reduce congestion, which is so much needed today."
China power shortage normalises and Vietnam reopens
In better news across the pacific, the impact on production from China’s power shortages has begun to normalise as factories adjust their shifts to maximise production. A recent fall in coal prices has helped ease the energy crunch and as a result, we expect the demand impact on China to North America trade to be minimal for now.
Elsewhere Vietnam’s reopening, while cases in North America are expected to rise post-Thanksgiving celebrations. While labour constraints are being resolved, production capacity is still hovering in the 40-60% range – with the availability of raw materials now representing the primary limiting factor, along with stretched container equipment capacity.
The shipping demand outlook
Looking at the broader outlook of demand in the region, the trends we have seen throughout the year are largely continuing. For example, as we exit the traditional Q3 peak season, demand volumes have remained elevated as shippers transition from moving seasonal/holiday goods, to general inventory replenishment.
Elsewhere, strong demand on Transpacific Eastbound trade is expected to extend through to the end of the year and into Q1 of 2022 as we move towards the Chinese New Year (Lunar New Year).
The relentlessness of this demand – which has been experienced across this year and last due to strong consumer demand – is keeping congestion and vessel port wait times at high levels as seen below:
Pacific Southwest (PSW) wait times are at +18 days
Pacific Northwest (PNW) – +21 in Seattle and +7 in Vancouver
East Coast – Savannah approaching +7, Philadelphia, Houston and Charleston at +3 days
It’s not just North America feeling this strain, wait times in East China are extending upwards of three days too.
As vessel rotation times continue to expand, it’s expected that ocean capacity constraints and schedule reliability issues will be with us as we move into 2022.
Continuing from our earlier update on pressures at the Ports of Los Angeles and Long Beach, the high number of container vessels off the coast of Southern California is creating both a maritime safety and air quality risk in the area. Now, the queuing process is being revised, so that vessels can slow steam and spread out across the Pacific as they make their way, as opposed to crowding in congested waters of the ports while they wait to berth.
Truck and chassis shortages persist as rail congestion improves
Across The United States and even into Canada the trucking situation is difficult. For example, in Newark, the situation now requires upwards of 14 days lead time to secure truck capacity with no guarantees in place for either overweight, hazardous or reefer cargo. Across the border in Canada truck capacity remains extremely tight with Vancouver rail dwells sitting between 5-7 days. And in the Midwest, securing either truck capacity or chassis for Chicago exports is proving extremely difficult with the Ohio valley currently experiencing the most severe shortage of 40’ chassis seen across the entire network.
In bright news, the rail situation is improving, with rail dwells down significantly in the South Atlantic and in Prince Rupert in British Columbia, where rail dwell time now ranges from 0 to 4 days.
For more insights and updates like this, take a look at our Knowledge Hub!