Over the last year and a half, we have written several times about the US-based port congestion in relation to COVID-19 as well as a lack of dockworkers and truckers. However, the port congestion issue does not stop there. As of today, global port congestion is still causing havoc to the industry. From China to Germany, parts of Africa, and New Zealand, ships are piling up while ports struggle to handle the massive influx of consumer buying caused by the pandemic.
In an effort to better understand this issue, in the following paragraphs, we will take a look at the history, the current trend, and what to expect.
The History
It is estimated that nearly 90% of global trade is carried by ocean liners. This is no small feat considering that shippers move thousands of tons in goods, while cargo ports have thousands of acres in dock and warehouse space. Traditionally, in the past, when congestion occurred, the industry had plenty of capacity to handle it.
In fact, in the 65-year history of the industry, the worst backup recorded was in 2004 when there was a staffing shortage at Union Pacific Railroad. At that time, San Diego’s port had 65 ships waiting. Luckily, this issue was mostly solved within just a few days. However, seeing as that was just one of the world’s ports coupled with a quick resolution time, the 2004 backup is nothing compared to what is happening today.
The Current Trend
Recently, it was announced that there are more than 300 ships waiting to unload worldwide. The congestion issue is not something new, and this global issue has been occurring for more than a year now.
For example, in 2020 Q4 southern California announced 170 hours of ship time, which is up nearly 50 hours from the previous year. Similarly, Felixstowe in the UK announced 92 hours of port time, which is up nearly 34%. Even ports with typically high productivity rates have been reporting slowed times. Unfortunately, bottlenecks and delays at this rate and length of time are a sign that there are major supply chain infrastructure problems that need to be addressed. Solving these issues is crucial. not just to the success of the industry but to the livelihood of the world.
What To Expect
As we head into peak season -- post-summer holidays -- it is hard to tell how the shipping industry will handle even more consumer buying. However, some short and long-term suggestions include using smaller ports like Port Hueneme instead of the Port of Los Angeles, beefing up workforces, and implementing global technology systems. With that, it is fair to say, shipping times will continue to be lengthy for the foreseeable future.
With the shipping industry in a volatile state, it can be difficult to manage your supply chain and logistics. Partnering with a reliable industry expert such as ClearFreight, can help ensure your investments are being taken care of. Our team members are constantly in touch with carriers, staying on top of pricing and transit times. We take pride in helping our customers get the best rates and transit times available, all while providing superior customer service. Contact us today to hear how our supply chain solutions and industry knowledge can help make logistics easier for you.