Demand continues to be strong, and global shipping congestion will continue until the summer of 2022 and throughout 2022
It is reported that the leaders of some of the busiest ports in the United States predict that the severe congestion of the world’s major shipping channels will continue until next summer or throughout 2022, as manufacturers and retailers make the shipping industry seasonal in order to replenish depleted inventory. Demand is still strong in the off-season.
In this year's shipping season, the number of containers arriving on the coast of the United States has reached a record level, and the number of ships waiting for berths at Southern California ports is also increasing, and congestion has spread to warehouses and distribution networks across the country.
Port executives such as Mario Cordero, executive director of the Port of Long Beach, California, have talked with shipping companies and their freight customers. They said that usually during the Chinese New Year in February, due to the holiday shutdown of Chinese factories, there will be some container shipping volume at this time slowing down. But this time shipping congestion is unlikely to be much eased.
Cordero said: "I don't see any substantial relief from the congestion that major container ports are experiencing. Many people believe that this situation will continue until the summer of 2022."
Griff Lynch, executive director of the Georgia Port Authority, said: “We believe that it will be very strong at least in the middle of 2022 or throughout 2022.” The Port of Savannah under the Georgia Port Authority is one of the largest maritime gateways in the United States.
According to the National Retail Federation (NRF) "Global Port Tracking Report", it is estimated that major US ports will handle approximately 2.37 million imported containers in August, which is the highest monthly record since 2002. NRF predicts that this year's total inbound container volume will reach 25.9 million TEU, which will break the 2020 record of 22 million TEU."
Ports have become one of the many bottlenecks in the global supply chain. Thousands of containers are trapped on container ships waiting for berths, or stacked in terminals, waiting to be transported by truck or rail to inland terminals, warehouses and distribution centers. But when these backlogs of containers are moved, they will be packed into crowded freight railway yards and warehouses full of goods.
Bob Biesterfield, CEO of C.H. Robinson Worldwide Inc., North America's largest freight brokerage company, said the shortage of truck drivers and warehouse workers has exacerbated freight delays, and the need to replenish inventory has reached an all-time high. He said: "This is not a problem that can be solved during the Chinese New Year in four to five months."
Congestion has led to a worldwide shortage of shipping containers and a spiraling increase in shipping costs. This deadlock prompted the Biden administration to appoint a port envoy last month to resolve the issue of how to improve cargo transportation. Previously, US companies complained about inventory shortages, shipping delays and rising costs.
Congestion is the worst in the neighbouring ports of Los Angeles and Long Beach, which account for more than one-third of the total U.S. seaborne imports. According to data from the Marine Exchange of Southern California, on any given day in the last few weeks, 40 or more ships were waiting outside the port, setting a record during the pandemic.
Gene Seroka, executive director of the Port of Los Angeles, said that as the holiday shipping season continues, the port's congestion situation may further deteriorate. The port has broken the record of container loading and unloading for 13 consecutive months. Seroka said that compared with the same period last year, the container loading and unloading volume at the terminal is expected to increase by 35% in the week starting on September 5, and it will increase by 80% in the following week.
Americans shifted their spending from services such as catering and vacations to home improvement, office equipment, and other consumer goods, driving this growth. The person in charge of the port said that importers are also hoarding additional inventory, because the shortcomings of the just-in-time supply chain were exposed in the weeks before the pandemic outbreak.
Sam Ruda, Port Director of the Port Authority of New York and New Jersey, said: “Only when the pandemic is over, the deadlock can be broken. This is the real reason why the situation we see today continues.”