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U.S. Ports Are Congested, Making It Difficult To Pick Up Goods

Author : Bozhou Marine

Update time : 2022-01-15 13:44:16

800 people are absent from work in the western United States port, the port congestion is worsening, and it is difficult for customers to pick up goods

The next two weeks are scary

Currently, the Omicron variant is "spreading like wildfire" across the United States.

On January 3, the number of new infections recorded in the United States was 1.03 million, the first record of a single-day increase of one million. A week later, on January 10, the number of new confirmed cases of the new crown in the United States in a single day was close to 1.5 million, a new high.

Fauci, the top infectious disease expert in the United States, issued a warning on January 11 local time, saying that at the current speed of the spread of the epidemic in the United States, the Omicron strain will eventually find "almost everyone".

The ports of Los Angeles and Long Beach, the two major ports in the western United States, have been completely occupied by the epidemic. Although they carry 40% of the US imports, they are already overwhelmed.

Pacific Maritime Association (PMA) chief executive Jim McKenna said about 150 dockworkers were tested for COVID-19 at ports in West America on January 4, and about 100 of them were positive.

PMA said that under the impact of the epidemic, 800 terminal employees at the Ports of Los Angeles and Long Beach were unable to show up for work on January 10, accounting for 1/10 of the daily attendance. Reasons for absenteeism include being diagnosed with COVID-19, being in isolation, awaiting screening results, or being unwell.

The association analyzed that, affected by this, on January 10, the terminal manpower was tight, and 13 cargo ships could not find anyone to load and unload the goods, so they could only suspend related operations.

Cargoes can’t get down, and the port is even more congested. According to the Marine Exchange of Southern California, the number of container ships waiting to call at the port increased to 102 that day, approaching the record high of 106 on January 1. Before the outbreak, at most one ship was waiting to dock.

In addition, because the two major ports in the United States and the West fail to quickly handle incoming ships, some shipping companies will transfer to nearby small ports to unload, so port congestion will also spread to nearby small ports. As the epidemic in the United States worsens, it is expected that the follow-up is likely to lead to further deterioration of the existing congestion situation.

Jim McKenna, CEO of PMA, said that Asian factories cut production during the Lunar New Year period, and ports in the United States and West may be able to take the opportunity to clear some accumulated cargo, but most shipping giants believe that the situation in the port is difficult to solve, and the flood of goods will continue until the first half of this year, or even It lasts a whole year.

Shipping may go up

Recently, many foreign trade people who need to ship to the United States have received notices from freight forwarders: Affected by the epidemic, Matson Shipping originally planned to sail from Ningbo and Shanghai from 1.19 to 1.20. It will be cancelled, and the next boat will be postponed until 1.26-1.27.

According to the latest data released by Drewry, in the next 4 weeks (weeks 2-5), the world's three major shipping alliances have successively cancelled several voyages. 15 voyages, the least Ocean Alliance cancelled 8.5 voyages; a total of 44 voyages. During this period, 58% of blank sailings will occur on the trans-Pacific eastbound trade routes, primarily to the US West Coast.

Under the situation that supply and demand are already out of balance, the suspension of shipping and port jumping means another wave of increase in freight rates.

In response to the current situation of the West American port, some people in the industry have said that when the shipping company estimates that the waiting time of the ship will be further extended, the freight rate is bound to increase again, and it is likely that a port congestion surcharge will be imposed.

On January 7, the Shanghai Shipping Exchange's export container freight rate SCFI index continued to increase by 62.94 points to 5109.6 points in the latest week, reaching a new high for six consecutive weeks. The Eastern Front also continued to climb.

Drewry's latest composite world container index rose 1.1% to $9,408.81 per 40-foot container, still 80% higher than the same period last year. The WCI average composite index assessed by Drewry so far this year is $9,409 per 40-foot container, $6,574 above the five-year average of $2,835 per 40-foot container. Among them, the freight rates of Shanghai-Los Angeles and Shanghai-New York increased by 3%, reaching US$10,520 and US$13,518 per 40-foot/box, respectively.

Sea-Intelligence, a well-known consulting agency in the industry, has made a judgment on the future trend of the market by analyzing the cyclical changes of the China Export Containerized Freight Index (CCFI) from 1998 to 2019 before the outbreak of the epidemic - freight in the container shipping market may take 2 years to return to normal levels. "As freight rates have been rising for 17 months now, it may take up to 30 months for freight rates to recover."

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