US ports face empty container pile-ups as supply chains recover

SHIPPING analysts are warning that North American ports could become overwhelmed by a build-up of empties as transpacific supply chains return to pre-Covid normality, reports London's Global Trade Review.


"If transportation time is back to 'normal' by early next year, we will see the release of 4.3 million TEU of excess containers into North America, which cannot be expatriated, within the planned network operations," said Sea-Intelligence CEO Alan Murphy.


"This will potentially overwhelm empty container depots in the US, an issue which is already beginning to materialise," he said.


"With a massive shortage of empty containers, carriers had to order new containers to be manufactured in Asia, and these were then fed into the extended supply chains,"


"As transportation time is now getting shorter, these additional containers will be released back out of the supply chain, and they will start to pile up, primarily in Europe and the US."


The average time taken to deliver cargo soared to 112 days in February this year, nearly three times the average before Covid struck, according to the Denmark-based consultantcy.


As of late August, the most recent point for which data is available, that figure had dropped to 88 days, Mr Murphy said.


The Covid slowdown had left containers "tied up" in longer supply chains, and with demand from western markets outstripping supply from Asia, carriers were unable to return empty containers quickly enough to be refilled, Mr Murphy said.


Said Container xChange CEO Christian Roeloffs: "There is already congestion, like every year, because it is the peak shipping season, and everyone is trying to make sure that retailers have enough inventory on the shelves for the upcoming holiday and Christmas season."


At the same time, ongoing labour negotiations with west coast dockers have led many freight forwarders to reroute cargo to the other side of the continent, spreading congestion issues to the east coast.


There is also uncertainty around consumer demand, which Mr Roeloffs says is softening due to inflation and fears of recession.



US ports face empty container pile-ups as supply chains recover
US ports face empty container pile-ups as supply chains recover