The ocean freight industry is stuck at a rate of only one-third of ships making their berthing windows on time (a six-year low.) An analysis of some of the busiest trade routes in November saw ships on the eastbound trans-Pacific to the U.S. West Coast trades with an average delay of more than 13 days. East Coast trade lanes from Asia saw delays of eight to nine days. That equates to 10.4% and 18.7% on-time performance, respectively.
Unfortunately, there’s little positive news in terms of vessel backlogs, either. The Port of New York and New Jersey is seeing an increased number of larger container ships, which is forcing more vessels to sit at anchor, waiting for available berth space. Currently, the wait at anchor time is double the year-to-date average.
More ships aren’t the only factor. Bad weather, delays at other ports, and staffing shortages—partially because of COVID outbreaks—further exacerbate the problem. But the Fed is spending $230 million to help speed things along with Port Infrastructure Development grants, helping to expand ports and increase cargo throughput across 19 states.
We could see further improvement thanks to ocean carrier CMA CGM instituting 24/7 operations at its terminal gates. They’re also offering incentives to Intermodal truckers and importers to get their containers removed from the dock within eight days. According to comments Biden made to the Supply Chain Disruptions Task Force, the number of containers sitting on the docks for eight-plus days is close to half of what it was previously. This is despite more containers than ever are moving through the ports. Thanks to the $17 billion that’s been put aside to modernize ports in the new Infrastructure Investment and Jobs Act, we should see continued improvement in the future.
Finally, diversification in sourcing has helped companies navigate through multiple supply chain issues in 2021. Restructuring has included investments in new reshoring and nearshoring efforts instead of significant reliance on Chinese trade. For example, Tempur Sealy increased its U.S. manufacturing capacity, and in a bid to avoid bottlenecks during the holiday season, toymaker Mattel nearshored its manufacturing.
For more on these top stories, check out the article highlights below.
