While many ports remain severely congested, others beg for cargo as shippers seek to skip particular locations for faster turnaround.
The present interruptions in the supply chain, particularly at ports, continue to be a focus for businesses all across the world, but there is more disparity than most people think. While some ports with direct access to important routes sought after by shippers are utterly packed, others are asking for additional cargo.
For example, the Port of Oakland issued a request for extra cargo in mid-October after seeing its lowest vessel call total since 2015. As a consequence, according to the port, September import volume was down 13% from September 2020, while exports were down 18%.
However, the Ports of Los Angeles and Long Beach are severely congested, and have even imposed a fee on ships that take too long to leave the ports. According to the New York Times, these two ports handle 40 percent of all maritime traffic. Their main destinations entice shippers to optimise their efforts in an effort to reduce transit time, as the entire sector is labor-strapped.
Furthermore, the Port of New Orleans did not have any blockages, but saw an opportunity due to congestion at other ports. The port’s vice president and chief commercial officer disclosed that cargo has climbed 40 percent in the previous several months, and the port is courting oversea shippers with the promise of avoiding congestion.
The present issue for the Port of Los Angeles is that empty containers take up space, diminishing availability for new containers to come in. This is where the new levies, which go into effect next Monday, Nov. 22, come into play. Gene Seroka, the port’s executive director, stated during a news conference on Nov. 16 that the port had 65,00 containers sitting vacant.
Seroka also disclosed during the press conference that, while the port has the 24-hour operating capacity that President Biden advocated for in a new initiative to reduce congestion, it lacks the manpower to do so. The program’s success is hampered by a lack of enthusiasm among nighttime warehouse employees and truck drivers.
I wrote on the disparity in profitability between merchants and shippers two weeks ago, when increased demand combined with congestion benefits some but harms others. This week’s situation is quite similar and demonstrates how many holes exist in the supply chain. The future depends on a radically different strategy, one that does not just ignore the difficulties at hand.