Waiting for berthing for 30 days!

• 2022-04-11

On October 18 local time, Gene Seroka, executive director of the Port of Los Angeles, said that as of October 18, about 200000 containers containing goods had been overstocked near the coast of Los Angeles, because the COVID-19 epidemic continued to affect various supply chains.

Cerocca said that 25% of the goods stayed at the wharf for more than 13 days. Previously, the number of goods squeezed was more, almost twice that of today. The congestion continues to worsen. According to the latest data of the signal platform of the Los Angeles Port on October 18, 34 container ships are waiting for berths at the Los Angeles anchorage alone, and 10 or more are waiting outside the port,The average waiting time for berthing surged to 12.5 days. A container ship "Sinotrans Bangkok" has been waiting for berthing for 30 days.

As most of the global economy recovers from the COVID-19 epidemic, the demand for bulk commodities and goods rebounds rapidly, resulting in crowded ports around the world. As there are not enough ships or containers available, transport costs have soared and commodity prices have continued to rise.

Global supply chain ports are congested. In California, the number of container ships queuing for loading and unloading outside major ports has broken records.

The mayor of Long Beach, California, said: "Due to the global COVID-19 pandemic, major changes in production and decades long supply chain challenges, we are facing unprecedented freight surge in Long Beach and Los Angeles ports."

So, what is the cause of the large congestion in these ports? According to satellite images, alien ships are waiting to load and unload cargo in Long Beach and Los Angeles Port. These ships are container ships carrying goods from Asia across the Pacific to the West Bank of the United States. They are loaded with toys, tennis rackets, and almost everything you can imagine.

Janet Porter, chairman of the editorial committee of the internationally renowned shipping media Lloyd's List, said that the two ports handled a large number of goods from China, so once the congestion started, the situation might soon become worse. She said: "The whole transportation cycle has slowed down. Therefore, you need to wait a few days or even weeks to unload."

According to container trade statistics, compared with the same period before the COVID-19 pandemic in 2019, the number of goods shipped from Asia to the United States in the first eight months of 2021 increased by about 25%. Transaction volume between Asia and Europe remained basically unchanged. On the eastern coastline, there are also long lines of ships outside Savannah Port, Georgia, USA.

August is the second busiest month in history. In overcrowded ports, goods are transported inland after loading and unloading from ships, and these ports are also hit by the labor shortage caused by the COVID-19 pandemic. In terms of goods supply chain, the blockade of ports in China and other places due to the COVID-19 pandemic has also led to supply shortages.

Gary Hufbauer, a senior researcher at the Peterson Institute for International Economics, said that a direct problem faced by the port was the lack of skilled dock workers, truck drivers and railway workers to load and unload containers. He said that this largely reflects the shortage of workers caused by Delta mutation virus, but also reflects the shortage of drivers caused by retirement, especially truck drivers.

The sight of large numbers of ships waiting to be loaded and unloaded off the coast of California has triggered a broader debate about the state of the US supply chain. For a long time, people have generally called for upgrading infrastructure. The Chief of Staff of the White House of the United States once said that the Biden administration was addressing the "supply chain chaos" they inherited.

However, some experts pointed out that the problem of the logistics handling capacity of American ports existed before the COVID-19 pandemic. Gary Hufbauer said: "This reflects years of underinvestment. Port capacity will not deteriorate quickly, but the space for idle capacity may be less than 5%."

The White House has set up a working group to try to alleviate the bottleneck problem. The port of Los Angeles will now open for a longer time to improve congestion. But industry experts do not expect the backlog to end soon.

This spring, the purchase price of 40 foot dry cargo containers, most of which are on the market, exceeded US $6500, and the price more than doubled within a year, reaching the highest level since Drury Shipping Consulting began to monitor the price in 1998. The prices of refrigerated containers and tank containers also showed the same upward trend. Fran ç ois Batty, the Asia head of Unocal, the world's largest container leasing company, said: "In one year, the purchase unit price of tank containers rose from 13000 dollars to 21000 dollars."

According to the report, in order to solve the problem of shortage of "boxes and cabinets", the relevant Chinese authorities had asked domestic manufacturers to increase production as early as July. The cargo transportation activities rely heavily on Chinese manufacturers: China's dry cargo container output accounts for more than 96% of the global total output, the output of thermostatic refrigerated containers accounts for 100%, and the output of tank containers accounts for more than 90%.

According to the data of Drury Shipping Consulting Company, in the first six months of this year, China's dry cargo container production increased by 235% year on year, reaching 3 million TEUs.

Experts from Unocal Tank Container Company pointed out that "the manufacturer's order has expired, and the delivery period is also being extended. A few months ago, it took more than two months from ordering to delivering a tank container, but now it takes almost six months, or even longer."

It was reported that thanks to this strong demand, CIMC Group achieved a net profit of 4.39 billion yuan in the container business in the first half of this year, up 1739% year on year. The group's dry cargo container sales exceeded 1.1 million TEUs, with a year-on-year growth of nearly 220%.

Drury Shipping Consulting predicts that the production of new containers will increase 67% year on year this year. The factors that cause shipping chaos are not only the overall shortage of containers, but also the unreasonable allocation of empty containers - in American ports, empty containers are in flood, but in Chinese ports, empty containers are in shortage. It will take time to correct this phenomenon.

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