US West Coast ports are under excessive stress, indicating further congestion ahead as the holiday season nears
In the coming months, which are the most crucial for the industry, there will be higher demurrage and detention charges, higher spot rates and surcharges and intermodal delays before it finally settles
Shipment delays will extend beyond the holiday season as the industry grapples with shipping logistics bottlenecks and container availability
Container xChange, an online platform for container logistics, anticipates further congestion at the already clogged US West Coast ports of Los Angeles and Long Beach amid consumer demand surges and retailer stockpiling ahead of the holiday season.
CAx (container availability index) data revealed a 60% increase on average in the inbound-outbound ratio at the ports of the US West Coast in August 2021 as compared to the same period in 2020, surpassing pre-COVID levels.
This indicated that the inbound containers at the Los Angeles and Long Beach ports, the two busiest container ports in North America, have increased 60% compared to the same time last year.
This is the highest CAx at the ports observed over the past three years. The CAx is an index or tool for monitoring the import and export moves of full containers around major ports.
Johannes Schlingmeier, co-founder and CEO of Container xChange, said the 60% increase points to excessive stress on the ports, “and therefore indicating further congestion is expected in the coming months as we approach the holiday season in the later part of the year.”
Late last month, Gene Seroka, executive director of the Port of Los Angeles, confirmed that cargo moving through the port was at record highs and that there was not enough space for all the imports coming to the US.
High import levels are driving this surge in congestion as retailers stock up ahead of the holiday season.
“The all-time high in cargo congestion at the US West Coast ports is a result of the global supply chain disruption and its domino effect,” said Christian Roeloffs, the company’s co-founder and CEO.
“The ever-higher imports owing to higher demand, grappling with the infrastructural and human resources struggles are further adding to the stratospheric congestion which is ultimately leading to further delay in vessel arrival,” Roeloffs added.
“It also indicates that in the coming months, which are the most crucial months for the industry, there will be higher demurrage and detention charges, higher spot rates and surcharges and intermodal delays before it finally settles.”
Container xChange said: “The data corroborates well to the coming holiday season congestion chaos. We must expect delays in shipments further beyond the holiday season as the industry grapples with the bottlenecks of shipping logistics and container availability. The shipping woes are here to stay and so are the delays in our holiday gifts. For users, it means booking much in advance, even if it means paying extra.”
Photo by Charles Csavossy