Volumes up 11.9% since May
Port congestion remains a major hurdle for U.S. supply chains, with billions of dollars’ worth of products at anchor or inland, and the shift in use from East Coast ports to West Coast ports creating new pressures.
Shipping capacity between the Far East and the US East Coast has increased by 18.9% year-on-year in the last three months, according to sea and air freight research firm Xeneta.
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West coast has 59.8% of the Far East containers
The West Coast holds the leading market share for containers in the Far East at 59.8%, but continues to lose capacity to the East Coast as logistics managers move away from the West Coast amid fears of labor strikes.
In the past three months, container capacity also fell 1.7% on the West Coast. This is affecting the trucking and rail companies that serve the West Coast as fewer containers will have to move.
The railroad company BNSF, owned by Berkshire Hathaway and Union Pacific, serves the West Coast ports in particular.
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Rail and Trucking is booming
Meanwhile, East Coast rail and truck services are booming as traffic increases. Norfolk Southern and CSX are rail companies that serve ports on the east coast. Freight carriers, as opposed to trains, have the option of serving both coasts. “Volumes are up 11.9% this year so far and May alone was up 7.3% year-on-year as more ships and cargo head east,” said Peter Sand, chief shipping at Xeneta.
“This puts pressure on capacity and reliability comes at a price. So the East Coast is becoming a victim of its own success, leaving the West Coast with a breather to recover. Vessels moving from port to anchorage at destination port.
According to Project44, the average travel time from China to the West Coast pre-pandemic was 20 to less than 25 days on the West Coast and 38 days on the East Coast. Project44’s Josh Brazil, vice president of Supply Chain Insights said, “So we’re in a good place on the west coast right now, but as we move to the becomes longer. An increase in transit time indicates that congestion will cause further delays at the port.
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Port congestion expected to continue
Unfortunately, congestion is expected to continue as more ships call the East Coast in the coming months. The CNBC Supply Chain Heat Map tracks increased trade flows from the West Coast to the East Coast and the resulting congestion.
Time is money and unused ships and containers are both removed from the supply chain for quicker use. He is also one of the factors behind rising container prices.
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10 weeks and counting
Wait times in Savannah have increased for 10 consecutive weeks, according to Alex Charvalias, Supply Chain Transparent Visibility Lead at MarineTraffic. This has increased from his 1-day wait in May 2022 to now he has over 13 days. “There were no signs of easing in the weeks that followed,” Charvarias said.
Sea-Intelligence now reports that congestion on the east coast has worsened, with fewer than 1 of her 5 container ships (18.7%) currently arriving on time.
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US port technology is behind EU & China
“Ports in Europe and China are bigger and more automated, so they can handle disruptions better,” Brazil said. “These ports have unmanned chassis trucks to pick up these boxes, which really speeds up the ship’s unloading and loading process,” he said. The ship can be processed within 1 day. In Europe, it may take 2 days.
However, in the US, it may take 4-6 days for the Port of Los Angeles and other ports. Automation is he one of the issues in ongoing contract negotiations between West Coast ports and dockworkers’ unions. “So there is a big difference in what automation can do. Automation is a controversial issue because there are jobs associated with it. It will be controversial for a long time,” Brazil said.
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