Week 42 Freight Updates

The power crisis in China is bringing even more disruption to today’s supply chains as reports of higher-value goods receiving preferential treatment and lengthening lead times start to emerge. According to Jacky Yan, founder and CEO of Chengdu-based New Silk Road Intermodal, “the power cuts have already had a ‘big impact’ on manufacturing.” A combination of factors are putting extreme pressure on China’s energy consumption. Coal and gas accounts for three-quarters of the country’s energy usage and import prices have surged in recent weeks.

Then, there’s the latest COVID-19 outbreak at the Hong Kong International Airport that’s now also expected to add significant congestion and contribute to further delays for both import and export air cargo. With issues like these piling up one after the other, “the usual transit time from China to U.S. West Coast ports more than doubled, increasing from 16 days to 36 days in October 2021,” according to Shipping and Freight Resource.

As a result, efforts to address critical bottlenecks and ultimately improve cargo flow like the 24/7 operations at the ports of Los Angeles and Long Beach have a long way to go before the industry begins to see any real change. Hopefully, supply chain professionals can get these global port gridlocks under control in time to save the approaching holiday shopping season, so economies everywhere can have a chance to recover.

To learn more about this week’s top international shipping industry news, check out the following article highlights:

No end in sight for China power crisis as pressure grows on supply chains

Last month, factories across Guangdong’s Pearl River Delta manufacturing heartland and nine other provinces were forced to cut output due to government-imposed energy caps.

Air cargo delays 'likely' at Hong Kong terminal amid COVID-19 outbreak

Transit times at a Hong Kong International Airport cargo terminal “are likely to extend by an average of 2 to 3 days” due to quarantine rules stemming from a positive COVID-19 case.

36-day average transit time on China-U.S. West Coast route underscores the extent of supply chain breakdown

With the Biden Administration now stepping in to tackle the port congestion crisis at Long Beach and Los Angeles, China-U.S. West Coast transit data underscores how bad the situation has become, and how much work it will take to get cargo moving on time again.

U.S. port congestion requires synchronized expansion of assets, hours (sub. required)

While macroeconomic data is pointing to a slowdown in U.S. consumer spending, which in theory should relieve pressure on badly congested ports, a host of thorny issues within and beyond freight transport are stubbornly obstructing restoration of normal containerized cargo flow.

Global Port Gridlock Threatens Economies Everywhere

Global ports are growing more gridlocked as the pandemic era’s supply shocks intensify, threatening to spoil the holiday shopping season, erode corporate profits and drive up consumer prices.

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