The Urethane Blog

Port Logjams to Continue

Top US Port Head Warns Shipping Logjams To Continue Through “Summer 2022”

by Tyler DurdenTuesday, Sep 07, 2021 – 10:50 AM

Containerized shipping has become the ugly story of the chaotic supply chain facing U.S. importers and Chinese exporters. Hopes are quickly fading that trans-pacific supply chains will normalize this year or even in 2022. 

According to the Wall Street Journal’s Paul Berger, who spoke with industry experts, trans-pacific supply chains will remain swamped through at least the summer of 2022. 

Port leaders, such as Mario Cordero, executive director at the Port of Long Beach, California, warned:

“I don’t see substantial mitigation with regard to the congestion that the major container ports are experiencing,” Cordero said. “Many people believe it’s going to continue through the summer of 2022.”

The latest data from Marine Exchange of Southern California & Vessel Traffic Service of Los Angeles and Long Beach ports shows container ship congestion is worsening. This comes as U.S. importers are ordering products from Asia ahead of the holiday season. 

In three recent notes, Vessel Congestion At LA Ports Soars As More Ships Join Queue” and “U.S. West Coast Port Congestion At Record High Amid Transpacific Trade Route Disruptions” and “California Congestion Nears New High, East Coast Gridlock Worsens,” we highlight the latest build-up of vessels, now reaches new heights. 

Figures from last week showed 44 container ships were moored at a berth space outside Los Angeles and Long Beach ports, surpassing the record of 40 set in early February. Average wait times are on the rise, from 6.2 in mid-August to 7.6 days earlier this month. 

Data from the Global Port Tracker report produced by Hackett Associates for the National Retail Federation showed that U.S. ports handled 2.37 million imported containers in August, the most on record, dating back to 2002 when records began. 

The National Retail Federation expects 25.9 million containers will enter the U.S. in 2021, surpassing 2020’s record-setting 22 million. 

And it’s not just bottlenecks at ports that are disrupting the global supply chain, Bob Biesterfield, chief executive of C.H. Robinson Worldwide Inc., one of the largest freight brokers in the U.S., warned of a labor shortage of port workers, truck drivers, and warehouse workers that are adding to shipping delays. 

Biesterfield believes that global supply chain issues aren’t going to be “fixed in the next four to five months in accordance with the Lunar New Year.” 

There’s also a global shipping container shortage that Goldman Sachs continues to warn about which has pressured shipping costs higher. 

Sam Ruda, port director at the Port Authority of New York and New Jersey, warned that congestion at U.S. ports might end when the pandemic diminishes. However, Dr. Anthony Fauci and peers at the FDA and CDC (most notably CDC Director Dr. Rochelle Walensky) have recently warned about a new mu variant which may indicate that virus continues to evolve. 

It appears ocean freight won’t normalize anytime soon – maybe not until the end of 2022. 

But-but-but supply chains disruptions pushing inflation higher were only supposed to be “transitory” – the Federal Reserve continues to lose whatever credibility it has left.