News

October 17, 2021

Bloomberg’s Port Congestion Tracker shows a typhoon in Asia spawned another wild week for shipping in a year with multiple challenges — a vessel wedged in the Suez Canal, a dozen major storms, rolling Covid lockdowns disrupting key manufacturring hubs in China and Vietnam, a shortage of truckers and dockworkers, and a resurgence of consumer demand.

The latest congestion won’t be isolated to Asia for long, as delayed ships loaded with merchandise soon start sailing for the U.S. and Europe.

Even if shipping strains ease in China, that “could still mean new surges of vessels arriving at congested ports like Los Angeles-Long Beach, shifting the backlog to the destination ports,” said Judah Levine, head of research at Hong Kong-based Freightos.com, an online shipping marketplace.

President Joe Biden last week urged the L.A. port to run a 24/7 operation. In the U.K., containers filled with goods and outbound empties were piling up so high at the key port of Felixstowe that at least one container carrier had reroute cargo through ports in mainland Europe.

“Data on sea and air shipping costs, container throughput and transport utlization point to an ongoing supply shock for the global economy,” Michael Hanson, senior global economist at JPMorgan Chase, told clients in a report on Thursday.

Friday’s queue of ships around Hong Kong and Shenzhen was the largest recorded there since Bloomberg News began tracking the area in April. The current count surpasses highs reached in May when the Shenzhen port of Lantian was gripped by a Covid-19 outbreak.

U.S. ports have some of the highest congestion rates in the world, the data show.

The Port of Savannah, Georgia, on the East Coast had 25 waiting ships versus just six in port late Thursday, leading all major ports with an 81% congestion rate. On the West Coast, the adjacent ports of L.A. and Long Beach had a combined congestion rate of 56% Friday, as ships waiting outnumbered the ships in port.

“Port congestion, equipment shortages and extreme container freight rates are just the symptoms of a deeper problem that includes trucking shortages and limited warehousing space,” said Simon Heaney, senior manager for container research at Drewry in London. “Covid has stressed all links in the chain and these issues take time to resolve as there is no latent capacity that can be turned on like a tap.”

By Kevin Varley and Brendan Murray © 2021 Bloomberg L.P.