West Coast Port Congestion
Digital freight forwarder Shifi has reported continued West Coast port congestion rates and warns businesses that supply chain demands are far from over. The COVID-19 pandemic isn’t the only reason for this clogged supply chain. Possible reasons for this congestion, as noted in their report, are an increase in incoming vessels and the slow steaming of vessels to the West Coast.
Unless these issues are addressed, Levi believes that we will continue being stuck in this circle of West Coast port congestion .
To put things into perspective, let’s look at U.S. average transit and discharge times. Pre-pandemic transit times averaged about 16 days. The average transit time in May 2021 was 28 days. In November 2021, the average transit time was pushed to 45 days. This means an average 96 percent increase since May 2021 and a baffling 181 percent increase since pre-pandemic averages.
Meanwhile, the transit and discharge time from China’s major ports to West Coast ports is averaged at 33 days. Its current averages are a decrease from the 44 days seen in November.
What’s the most valuable commodity in the world of business, transport, and trade? The answer is time, and everyone knows time is priceless.
Here’s what Shabsie Levy, founder, and CEO of Shifi, told American Shipper earlier this month.
“Considering the increase in ad hoc vessels and new strings added along with the East Coast ports, it was amazing to see the transit time results. What’s amazing with the results in New York/New Jersey, some terminals are underutilized and operate only till 4 P.M.. Can you imagine how many more containers could be processed if those terminals were operating for longer?”
Going further, according to Levy, this West Coast port congestion is impacting freight costs themselves. The report reveals that freight rates are trending up.
The report notes, “The freight rates are on the rise again and this is attributed to the increased demand for space out of China brought about by the lack of ships to load cargo on as the ships are still waiting in Los Angeles and Long Beach.”
Fortunately, there is some good news that comes from the Shifi data.
The Biden administration has put repeated pressure on LA and Long Beach shareholders to move containers more quickly. Per Shifi’s data, there has been some improvement in container dwell times. Let’s turn the numbers again.
The Port of Los Angeles has seen dwell times dropping from 9 days to 4 days since October. In the same time frame, the Port of Long Beach has seen a drop from 12 days to 5 days. Though the ports of New Jersey and New York have never surpassed 6 days, their current dwell time is now 3 days.
So, there is some progress being made. Yet, the industry and officials will still need to work together until we’re able to go back to pre-pandemic transit and discharge times.
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