What's Going On? Port Congestion.
Port congestions are wreaking havoc everywhere across the globe, and as a result, global supply chains are incredibly congested. The whole shipping cycle has seemingly come to a stop, with ships waiting for days, and sometimes up to weeks, to anchor at the shore and unload their cargo. As a crucial part of the supply chain, delays at ports can be rather detrimental to the entire shipping process, which can be demonstrated by the congestion at US ports.
The worst port jam the world is currently experiencing is the congestion at US ports. The backlog of container ships stuck in California continuously breaks its records and has no sign of stopping anytime soon.
What Causes Port Congestion?
Port or terminal is overbooked
- Lack of capacity will lead to processing delays, and eventually clogged ports.
Shortages in equipment and staff
- If there is a shortage of specialized handling equipment and working staff members, productivity levels decrease dramatically, which encourages port congestion.
- With a shortage of tug boats or guide pilots, container ships will also find it difficult to dock, which results in a clogged port.
- There can also be a shortage of truck drivers, whether it be for transporting filled containers or returning empty containers.
Unpredictable delays, mainly bad weather and disasters
- Bad weather can cause delays as ships will not be able to anchor to port properly, and disasters such as container fires will also lead to a port jam.
Sudden closure of certain ports
- From blank sailing to disinfecting ports, there could be multiple reasons for ports to close certain terminals or pause work altogether.
But COVID-19 has been the main culprit of the current port congestion crisis
- It snowballed and triggered multiple reasons for port jams. From a lack of space to fewer staff members working due to pandemic restrictions, and many others.
- And the main reason that ports shut down to be disinfected recently has been because staff members received COVID-19 confirmations.
Why Has Port Congestion Been the Worst in America?
The short answer: Americans keep buying things.
America imported an immense amount of product over the past eight months, and it's one of the reasons why this catastrophic port congestion is happening. The Port of Los Angeles reported a 30% increase in imported cargo in the first nine months of this year, and while there are the most container ships stuck in California, many other ports are breaking all-time import records and running out of space.
Despite the dramatic increase in imports, the inventory to sales ratio hasn't gone down. Sales have become more intense. Retail sales were up 14.5% over the first nine months of 2021 in comparison to the same time in 2020. So businesses continuously bought more inventory, and American consumers purchased them.
What's the Next Step?
There isn't much that carriers and shippers can do to alleviate the bottlenecks, and it appears as if waiting for worldwide port congestion to ease up is the only option.
And adding more ships and containers to the already saturated industry will only make things worse. The issue is not a lack of capacity, but rather that ships and containers are in the wrong places. With port jams, containers already have nowhere else to go, so adding more to the supply chain will only worsen an already terrible situation.
But working with an experienced freight forwarding company like SFI can help!
Our real-time freight visibility and container tracking features will show you where your containers are, and how they're holding up. With this information, you can at least alleviate some stress involving freight transportation. If you need any assistance regarding freight forwarding, contact SFI today, and we'll take care of your shipping needs. Email us at email@example.com or call us at (909) 594-3400.