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02 16 2022
The unresolved port congestion in the U.S.A. |Aquasky

In early September 2021,  Morten Engelstoft, CEO of APM Terminals, a port and terminal operator under Maersk, pointed out that due to the previous relief package promoted by the United States, the demand for goods has risen, which has further evolved into a vicious cycle of commodity shortages. In July 2021, compared with the same period last year, imports increased by 20%. This also means that there will be a large number of commodities entering, causing extremely tight port capacity, warehouses, and manpower, making the situation in port congestion worse.

The Port of Los Angeles in California and the neighboring Port of Long Beach, also known as the Los Angeles-Long Beach Port Complex Area, is the largest container port complex area in the United States. The loading amount is about 40% of all the goods to the USA. This is an important indicator that shows the US trade situation. Gene Seroka, executive director of the Port of Los Angeles, pointed out that the cargo throughput of the Port of Los Angeles has soared by 50% compared to before the epidemic. As consumer demand continues to rise, stores have also rushed to replenish goods.

 

The main imported goods at California ports are electronic products and other kinds of goods from mainland China. Since other ports do not have enough space, machinery, and manpower, it is still difficult to consider transferring to other ports. To alleviate the port congestion problem, Mario Cordero, the executive director of the Port of Long Beach, announced in mid-September that the Port of Long Beach would extend its night operating hours. The Port of Los Angeles also announced that it would extend the weekend camping hours. The two ports are also cooperating with truck operators to improve freight efficiency. Union Pacific Railroad also joins the 24-hour operation.

 

Some cargo owners have already transferred their goods to ports on the east coast. But the cost is not cheap, because the route is longer. The transit time will be extended by several weeks. Moreover, the freight is much more expensive than shipping to the west coast. However, the port of Savannah, the third-largest container port in the United States on the east coast, is also in the port of plug crisis. About 80,000 containers are waiting to be unloaded, which has increased by 50% compared with the past.

 

Gary Hufbauer, Senior Fellow, Peterson Institute for International Economics, also pointed out the obstacle faced by the port, such as lacking skilled dockers, truck drivers, and railway staff to load and unload containers. Even if the US government tries to recruit people on maternity or paternity leave to alleviate the shortage of port workers, there are still insufficient truck drivers.

 

The situation of such congestion caused a new wave of discussions in the United States on the state of the supply chain. The Biden administration is currently actively resolving this supply chain chaos. However, some experts pointed out that the problem of the logistics handling capacity of American ports has existed for many years. Gary Hofbauer also said that years of insufficient investment will gradually cause the port's capacity to deteriorate.

 

At present, according to experts’ estimates, the state of Port Congestion may remain unchanged throughout 2022. Sam Ruda, director of the Port Authority of New York and New Jersey, said that perhaps the congestion in the port will not end until the epidemic slows down.

 

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