Swamped U.S. Seaports Are Bracing for an Earlier Peak Shipping Season

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Gateways thinned by record cargo and congestion say this year’s crush will arrive weeks earlier, as importers try to ensure their goods arrive before the fall shopping season.

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Vessel backlogs at the heart of US supply-chain congestion have dwindled in some places, but have been nursed in others, including East Coast ports, while other problems that pervade logistics networks remain. Warehouses are full. Trucking companies and railroads have smaller workers and equipment. And container yards at ports are clogged with hundreds of thousands of boxes.

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According to the Pacific Merchant Shipping Association, in April at the nation’s busiest port complexes in Los Angeles and Long Beach, California, containers sat in yards for six days before being picked up by truck and nine days before being taken by rail.

“When you remember last year—the fall of the third and fourth quarters, that was our biggest hurdle, people getting their cargo off the dock,” said Jean Cerocca, executive director of the Port of Los Angeles. “We have to start digging into this backlog very quickly.”

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But across the country, Gateway officials say they are better prepared to deal with the impending import boom after more than a year of closed docks, vessel backups and juggling record import volumes.

Ports note that they have changed operations to better deal with congestion before they get out of hand. They have extended operating hours to handle more containers and installed pop-up container yards to store overflow boxes. Port officials say there is better and more frequent communication between maritime shipping lines, retailers, truck drivers, warehouses and third-party logistics operators in the supply-chain.

Despite those assurances, shipping customers are wary — and prepared for more delays.

Three-quarters of shipping industry professionals surveyed by The Container Exchange said this year’s peak season will be as bad or worse than last year. target Corporation

Officials, during a recent earnings call, projected more than $1 billion of expected freight expense this year amid increases in fuel and shipping costs, and said they expected a reduction in supply-chain pressures by 2023. do not.

But there are signs of a slowdown in shipping demand. Retailers like Target and Walmart Inc.

Some are withdrawing orders because consumer spending has shifted from goods to services. Analysts at JPMorgan Chase & Co said in a recent report that they expect slowing growth, especially in sectors such as home goods and electronics that have seen slowdown in demand.

A slowdown in imports could give ports the breathing room they need.

“I can’t see a big peak season right now,” said Craig Grosgart, senior vice president of Global Ocean Freight for Itasca, Ill.-based freight forwarder Seiko Logistics. Container shipping line Ocean Network Express, he said, recently increased Seiko’s weekly space allocation on ships by 15%, suggesting there is more space on the ships.

Even a gradual increase in container volumes this peak season could present a challenge for the ports. According to research and consulting firm Beacon Economics, import volume at the major US ocean gateway was up 6.6% during the first quarter compared to the year-ago period, marking the start of a record year.

Dozens of container ships are currently waiting to be unloaded at ports on the West, Gulf and East coasts, even as a month-long Covid-19 shutdown in China has dented imports in some of the country’s biggest manufacturing hubs. reduces production. London-based Drew Shipping Consultants estimates that goods worth the equivalent of 26 container ships were not shipped from China in April alone.

The backup of container ships at Los Angeles and Long Beach, which marked supply-chain congestion last year, fell to 28 ships on Monday, the lowest since Aug. 2, according to the Marine Exchange of Southern California. This is down from a high of 109 ships in January – although it was unusual to wait for any ships to disembark before the pandemic.

Small backups have spread to other ports as shippers look for a way around Southern California’s congestion.

Last week, an average of 18 ships a day waited at the Port of New York and the coast of New Jersey, according to port data. Port officials said at the port of Savannah, the fourth-largest gateway for maritime imports, 16 container ships were waiting to unload on Monday.

Georgia Ports Authority executive director Griff Lynch said the Savannah was caused by a spike in backup vessel traffic that coincided with a week in which the port took one of its berths out of operation for a reconstruction project. This suggests that there is a slight reduction in cargo operations before the seasonal rush.

Port officials are watching to see if imports pick up after sugar factories start production. Gulf and East Coast ports are also poised for a surge in cargo as shippers divert cargo from the West Coast, where months of labor negotiations between dockworkers and cargo-handlers could be disrupted.

The talks, which began earlier this month, are expected to last through the summer. Mr Lynch said East Coast ports are already seeing a combined bump of 10% to 15% in cargo.

Write [email protected] . on Paul Berger

Credit: www.wsj.com /

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