On January 28, a record 60 vessels were anchored or positioned outside the ports of Los Angeles/Long Beach, unable to berth due to paralyzing congestion at the port complex. A surge in Asian imports, labor constraints due to Covid, and the ripple effect of supply chain disruptions throughout the system are delaying the movement of cargo—both imports and exports—most severely at LA/LB, but also at the Port of Oakland and the NW Seaport Alliance, which comprises the ports of Seattle and Tacoma. Perishables shippers, including food and wine, are among the hardest hit. Fresh produce is spoiling aboard vessels before it’s even discharged. Perishables exporters who require reefer containers are being left stranded as ocean carriers reposition empty containers back to Asia rather made available to U.S. exporters—a development that is now being investigated by the U.S. Federal Maritime Commission.
The upcoming Chinese New Year (Feb 12-26) could provide some relief, as the annual holiday typically provides a lull in trade activity. However, some traders think China may discourage a slowdown in manufacturing this year in order to maintain a recovery in the economy. On the other hand, reports of a recent spike in Covid cases could mean that manufacturing operations will slow for up to a month in order to contain an outbreak.
Ultimately, whatever happens will affect the ability of ports, carriers, shippers and others to recover from this debilitating congestion—or not.