Skip to comments.Perfect Storm: (Ship) Congestion Plagues South China And US West Coast Ports
Posted on 06/12/2021 6:19:19 AM PDT by blam
Peak shipping season is ahead — and the parking lot of container ships moored off the US West Coast continues to worsen, with the epicenter of congestion based around Los Angeles/Long Beach ports. On the other side of the Pacific, in southern China, a surge in COVID-19 has caused some of the biggest port congestion in more than one year.
So now port congestion is seen on both sides of the Pacific as it’s hardly a secret that the recent collapse of trans-pacific supply chains will remain strained through the summer and one reason why prices for goods are soaring (as recently discussed in “It’s About To Get Much Worse”: Supply Chains Implode As “Price Doesn’t Even Matter Anymore” and “Port Of LA Volumes Are “Off The Charts.””)
But now, focusing at South China ports, exploding cases of coronavirus infections in Guangdong province, a top manufacturing and exporting hub, recently triggered local governments to increase prevention and control efforts that “curbed port processing capacity,” said Reuters.
Major shipping companies have warned clients of vessel delays, changes to port call schedules, and the possibility of avoiding some ports altogether.
Ocean Network Express (ONE), a container shipping company, warned customers in an advisory Wednesday: “The container logistics situation continues to deteriorate around all the ports in the area [South China port].”
Most of the congestion has been building at the Yantian International Container Terminal (YICT), a deepwater port in Shenzhen, Guangdong, China handing some of the largest container ships in the world, has reduced capacity at the port due to a recent outbreak of the virus, according to Seatrade Maritime News, citing ONE.
The world’s leading container line Maersk told customers to expect delays up to two weeks because of the reduced capacity of staffing at the port.
Refinitiv data shows 50 container vessels are moored in the Outer Pearl River Delta, waiting to dock at YICT. For comparison, this compares with 20 vessels for the same time last year.
Reuters quoted one exporter who said loading delays and slow deliveries continue to tangle global supply chains.
“Basically we had a similar experience last year so we have experience in responding, only the increase in transport costs are getting really astonishing. The freight fees are reflected in the increase in material costs which are up by around 15%-30% already,” said a sales manager at an electronics cable manufacturer in Shenzhen, a large manufacturing city in Guangdong.
The congestion and delays in South China came when container shipping supply chains were already at full stretch due to US West Coast port congestion. As a result, container freight rates have hit a record high and are expected to continue to rise further.
“The recent rise in Covid-19 cases in China has resulted in a shutdown that may add to the already record cost of shipping goods out of China. The delays have already resulted in pressurizing soaring shipping prices within China due to a lack of containers and increased export demand,” said Josh Brazil, the Vice President of Marketing at project44.
Port congestion on either side of the Pacific continues to deteriorate. It suggests that the normalization of trans-pacific supply chains will not happen anytime soon and will continue to add cost pressures for exporters in China and importers in the US – adding to the cost of products and ultimately pushed along to US consumers. Delays will also continue to create additional shortages…
Biden wants them on a ventilator. Fix that congestion right up.
Wow - the Bidinflation will get so bad that even the Stupid Party will be able to flip 30 House seats next year without breaking a sweat.
The congestion would go away if we stop buying crap made in China. Do without. It is amazing what you don’t need.
I think the CCP Virus outbreak is pure propaganda to cover for Biden’s monetary policy that is causing the inflation and disruption in the markets.
Over the past five or ten years the size of the ships and the number of containers they can carry have grown exponentially. The ability of the ports to keep up with that likely has not. So you double the number of containers, you double the time it takes to load and unload. Which is likely the reason for the backups.
Its not that hard to stop buying chinese parts....if you have a replacement.Replacements seldom exist.
I don’t see your logic. It should be more efficient to unload the same number of containers on fewer ships because there’s less time spent moving the ships into and out of position at the dock.
The place I work used to source all of its stuff in the US. The family had to sell the company. Someone working for the new owners got the bright idea to have Chinese makers reverse engineer a lot of the parts and supply us for half price.
That guy got a gazillion dollar bonus and retired early.
The parts have been junk ever since and sometimes we’ve had to go back to old suppliers, hat in hand, because of shortages over there.
But now, nobody can get parts, lead times are out to 4 months or more, lines are shut down, only 1 or 2 out of 6 lines are running ... People are expected to show up 48 or 50 hours a week only to sweep and clean because of shortages. People are leaving to go work other places ... it’s a hot mess.
The “C” word brings the reset into full bloom. Fear porn will continue to feed lockdowns and global manipulation.
This is not a test....
The Unions at the Ports of Long Beach and LA refuse to work weekends - other Ports run 24/7 - plus the Longshoremen refuse to let extra labor come in and work on the back log. It is a mess until more automation is installed at both Ports.
Do your Christmas shopping early this year!
The political tact is is a useful tool of the globalists.
I avoid China based items as often as possible.
If your infrastructure is set up to unload X number of containers a day, and now you're dealing with ships carrying twice as many or three times as many containers then your unloading time doubles or triples. You may have been able to process seven ships per week. Now you can process only two or three.
And Antifa has an effective, de facto blockade of the Port of Seattle ongoing.
Add these shipping price increases for every container sold at Target, Walmart, Amazon, Home Depot, Lowes, Office Depot, Staples, and every clothing store in every box store across America. Add these to the root-caused inflation already pushing prices up - Although NOBODY using their Washington “metrics” is doing that little calculation.
The cost of “doing business” is going much faster than the price of basic materials and basic processing equipment and basic fuel oil and gasoline and diesel is going up.
Inflation is no “temporary thing” driven by the increased demand caused by “Biden’s recovery from the pandemic” is it?
- the man driving the trucks and managing the trucking companies, the man stocking the grocery store shelves and running the gas stations, the man buying groceries and gas....
If your infrastructure is set up to unload X number of containers a day, then you’re unloading X number of containers that day, whether it’s 100 containers per ship or 150. Except now you’re spending less time moving ships without unloading. So you’re unloading X number of containers plus Y number since your actual unloading time has gone up.
If the port had been able to process seven ships per week, and the ships are now carrying twice as many containers, then there’s no reason to assume you can now only handle three because you’re processing ships faster. So more likely it’s four ships which equal eight of the smaller ones.
And if your ships have doubled in capacity then shipping companies need send only half the number of vessels to carry the same cargo.
Unfortunately, the reality that is clearly visible off the coast of Southern California shows that your reasoning is completely invalid. There was no backlog of ships before COVID-19. Ship capacity hasn’t magically doubled or tripled in two years. And consumer demand has been way down due to the economic affects of the pandemic, so if anything shipping traffic has been reduced in the last two years.
Union issues mentioned another thread above is a much more likely cause than some imaginary lack of infrastructure improvement.
Never underestimate the ability of the “stupid party” to snatch defeat from the jaws of victory.
They come by their name honestly.
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