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North American congestion could get worse as winter deepens

CONTAINER lines and port leaders are warning that pressures on the North American shipping system are rising, risking even greater congestion in the winter months given the real possibility that Asia imports will stay elevated through at least the first quarter

28 December 2020 - 19:00
CONTAINER lines and port leaders are warning that pressures on the North American shipping system are rising, risking even greater congestion in the winter months given the real possibility that Asia imports will stay elevated through at least the first quarter.

Bottlenecks are beginning to form outside southeast ports, which until now have consistently maintained fluidity, reports IHS Media.



However, the worrying sign is that cargo is now stacking up at nearby warehouses, truck capacity is tightening, and chassis dwells are lengthening, said Uffe Ostergaard, Hapag-Lloyd's president, Americas.



Average turn times and berth productivity at major US ports are under pressure, reflecting increased strain on the container shipping system, he said.



'None of the metrics are very encouraging now. The supply chain bottlenecks are pretty bad now, and we're not even in winter yet,' Mr Ostergaard said. 'All stakeholders will need to collaborate closely to manage through the coming months as there is no idle capacity that can be injected short term.'



An 'unprecedented amount of import containers' has taken up all of the marine terminal space at the ports of Los Angeles and Long Beach, forcing employers to strictly ration longshore labour, with no immediate relief in sight, said Ed DeNike, president of SSA Containers, the operator of the largest Long Beach terminal.



Reflecting the mounting congestion pressures in Southern California, Zim told customers it had to cancel its expedited shipping guarantee which began December 7 on its new South China-Los Angeles services, citing labor and trucking shortages.



On the East Coast, truckers serving the Port of New York and New Jersey say difficulties in returning empty containers to ocean carriers are getting worse, and surging Asian import volumes are squeezing chassis supply.



Volume in Georgia, South Carolina, and Virginia is rising quickly, including all-time container records in Savannah and Norfolk in November. The gains are prompting concerns among drayage providers that a chassis shortage could be imminent if cargo owners cannot unload containers fast enough.



The chassis pool is holding up for now, according to port officials and drayage providers, but may not if the volume doesn't wane soon.



Maersk in a customer advisory warned that surging Covid-19 infection rates will further crimp labour availability at warehouses. Maersk also said it expects port delays to drive more blank sailings in December due to a lack of ship capacity and equipment.



The carrier noted that the shortage of containers in Asia for US export has expanded from 40-foot containers to include 20-foot and 45-foot containers in some areas, and even 40-foot non-operating refrigerated containers are in shorter supply.



Mr Ostergaard said Hapag-Lloyd expects US imports from Asia to stay strong through the first quarter, which means up to and beyond Chinese New Year on February 12. US retailers are now predicting year-over-year monthly growth in imports will continue at least through April, according to the latest Global Port Tracker, while non-vessel operating common carriers (NVOs) say the strength could last until the next peak season.


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