Presently, one major news making wave in the supply chain sector is the tremendous port congestion at the US west coast ports. This congestion is expected to last till the peak summer season, therefore, presenting a very difficult period that will continue till the start of the traditional peak season. Over sixty container vessels were queued up at the San Pedro Bay on February 18th waiting for a slot at the busy ports of Long Beach and Los Angeles. At this point, the sheer volume of imports, the lack of warehouse space and the pandemic situation are some of the factors contributing to this crisis. Additionally, the backlog to move the shipments is worsening by the day.
As per the Twitter handle of the Port of LA, it “processed 835,516 Twenty Foot Equivalent Units in January 2021, an increase of 3.6% compared to January 2020. It was the sixth consecutive month of year-over-year increases as US consumer spending continues to drive demand for goods.
The opinion of the industry experts
Paul Binghamm, the IHS Markit Transportation Economist believes that the ports on the West Coast are still struggling with the effects of the pandemic. Moreover, in certain cases, there is also a lack of longshoremen. Earlier, The Los Angeles port confirmed that around 10% of the regular workers (800 workers) stopped coming to work primarily due to COVID concerns. “The COVID count here was approaching 1,000 last week. They’re not all out. But they have to go into quarantine when they get a positive test,” continues Mr. Bingham.
According to Fabio Santucci, the CEO of Mediterranean Shipping Company in the US, “We have been using all of the vessels in our fleet and more….it’s not that we didn’t have enough containers or there was not enough chassis available, it was the increased street dwell and over utilisation that has been above and beyond the normal average causing the supply chain issues.”
Data from the Port of Los Angeles reveals that the average waiting time for ships is currently as high as almost eight days!
Port congestion in Singapore
Currently, the Port of Singapore is the latest post that has been hit by this congestion crisis. To begin with, the turnaround of the container ships has more than doubled leading to significant delays. The wait time for ships of 18,000TEU has risen from the usual two days to five to seven days! According to a spokesperson from PSA International, some of the factors responsible for this situation are as follows:
- An unforeseen surge in shipment demand
- Worldwide congestion at ports, warehouses and depots
- Renewed lockdown measures
- Scarcity of empty containers
- Unreliable sailing schedule of ocean vessels
As a result of the port congestion, the spot container freight cost has considerably increased. PSA is now taking certain measures to improve this situation. These measures include priority discharge of time-critical cargo, express delivery of shipments to factories, SMS/email notification for important container updates etc.
“Closer collaboration and increased cargo movement visibility will go a long way towards keeping supply chains flowing smoothly and safely,” says Seow Hwee, a PSA spokesperson.
Stay tuned to have a deeper look into the port congestion problem in our next blog!