February 17, 2023
By Tomer Raanan
Number of anchored vessels off key US ports is far below its highs, but congestion lingers at other end of the supply chain.
A drop in demand has helped ease oceanside congestion, but has also left inventories stacked and warehouses full. In addition, other imbalances such as labour shortages and equipment availability pose a threat to supply chains’ recovery.
OCEANSIDE congestion at major US ports has fallen substantially since backlogs peaked last January on the west coast and during the summer at east and US Gulf coast ports. The vessel logjam in San Pedro Bay peaked in January last year with 109 box ships waiting to unload and was officially declared over by November, with no backlogs reported since then.
Meanwhile, Lloyd’s List Intelligence data shows about 15 box ships anchored outside the east and US Gulf coast ports of New York and New Jersey, Savannah, Houston, Virginia and Charleston, having hovered near 100 ships in September.
Last year began in much of the same way that 2021 did: major US ports were shattering monthly records and congestion piled up across supply chains. Nationwide imports began establishing — albeit at record levels —throughout the summer and started declining at an accelerating rate from September. While this has helped alleviate bottlenecks on the water, inland congestion remains stubbornly persistent.
“As demand volumes come down and congestion at the ports fortunately ease, we are unfortunately seeing bottle necks on the other end of the spectrum,” said Association for Supply Chain Management chief executive Abe Eshkenazi.
“Without high demand from consumers driving up sales, inventories are left bloated, and warehouses stuffed, ”he added. In addition, workforce shortages — especially of truck drivers — are still creating major chokepoints along supply chains, he told Lloyd’s List. “Any delay in the journey of a product to the consumer is detrimental to the overall flow of supply chains. As labour shortages persists, organisations will explore new tools to create efficiency.”
“Lastly, inflation and the cost of essential goods are top supply chain concerns as we continue to battle global crises like avian flu and the war in Ukraine,” he added. The availability of ocean chassis equipment is also shaping up to be a major issue, according to Paul Brashier, vice-president of drayage and intermodal at third-party logistics provider ITS Logistics.
Read the full article here.