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Asia Container Turn Times Accelerate as US Remains Mired in Congestion

Containers are now moving in and out of China at faster speeds, as shippers desperately source capacity, but port congestion in Europe and the U.S. continues to slow the return of boxes to Asia, stymieing the recovery of global ocean supply chains. This comes via a joint report conducted by logistics technology company Container xChange and Fraunhofer-CML, an applied research organization.

As the rush to get exports to buyers soared last year, the average median time containers spent in Chinese depots dropped to just five days, down from 61 days in 2020, according to the report. China was not alone among leading exporters in seeing rapid box turnarounds last year–Vietnam, Singapore, Thailand and Indonesia recorded average median times that containers spent in depots of nine, 11, 16 and 19 days, respectively.

“Once containers reach Asia, they are being redeployed at record speeds,” Dr. Johannes Schlingmeier, co-founder and CEO at Container xChange, said. “However, the mismatch between supply and demand at many origin ports, including in China, means it is hard for U.S. and European importers to always secure boxes unless they have planned ahead or are working closely with their box supplier, forwarder or container line, to ensure they have both a vessel slot and a container available in advance.”

By contrast, severe congestion in many destination ports saw container dwell times at depots reach near-record levels in 2021. The worst performing countries in terms of the average median time containers spent in depots in 2021 were the U.S. and the U.K., which suffered average dwell times of 50 and 51 days, respectively, the report noted. The next worst performers were South Africa at 47 days, United Arab Emirates at 40 days, Pakistan at 31 days and Germany at 25 days.

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Containers are now moving in and out of China at record speeds, but port congestion in Europe and the U.S. hinders the return of boxes.
Container dwell times in 2021. Courtesy

Container shipping rates have bounced back after a slight downturn in the fourth quarter, with the Shanghai Containerized Freight Index (SCFI) breaking through the 5,000 mark at the end of December,” Schlingmeier said. “Port congestion is a major factor. Jefferies Equity Research found that in November last year, some 36.2 percent of box-ship capacity was at port. Until that congestion is cleared, we’ll continue to have major imbalances in the supply and demand of both vessel capacity and containers. As the Omicron variant brings more disruption, with Chinese New Year around the corner and some ports including Ningbo already facing lockdowns, we are expecting a volatile start to the year for ocean freight logistics.”

The depot dwell time results were among a series of data points contained in the second annual Container xChange/Fraunhofer-CML “C-Timing” study, which was undertaken to provide insights and forecasts on container shipping and supported by the German Federal Ministry of Education and Research.

The study found that in the US, the second-worst performer in terms of the average median time containers spent in depots in 2021, performance varied hugely by port. Across the country, average dwell times were 50 days last year, down from 66 days in 2020. New York recorded 61 days of container idle time at depots followed by Houston at 59 days and Savannah, Ga., at 56 days.

The twin ports of Los Angeles and Long Beach, on average recorded 40 to 42 days of container idle time. The Port of Long Beach and the Port of Los Angeles announced Monday that consideration of the “Container Dwell Fee” will be held off another week until Jan. 17.

The two ports have seen a combined decline of 45 percent in aging cargo on the docks since the program was announced on Oct. 25. The executive directors of both ports will reassess fee implementation after monitoring data over the next week. Fee implementation has been postponed by both ports since the start of the program.

Under the temporary policy approved by the Harbor Commissions of both ports, ocean carriers can be charged for each import container that falls into one of two categories–in the case of containers scheduled to move by truck, ocean carriers could be charged for every container dwelling nine days or more, while for containers moving by rail, ocean carriers could be charged if a container has dwelled for six days or more.

The ports plan to charge ocean carriers in these two categories $100 per container, increasing in $100 increments per container per day until the container leaves the terminal. Before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery remained on container terminals under four days, while containers destined for trains dwelled less than two days.

Any fees collected from dwelling cargo will be reinvested for programs designed to enhance efficiency, accelerate cargo velocity and address congestion impacts. The policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation and multiple supply chain stakeholders.

Steve Lamar, president and CEO of the American Apparel & Footwear Association, wrote a letter to President Biden on Monday praising actions taken so far on the container shipping crisis, but calling for more to be done.

Lamar noted that, according the The Maritime Exchange, 167 ships were queued up in a line stretching hundreds of miles to enter the Ports of L.A.-Long Beach, with wait times averaging 28.2 days at the Port of Long Beach from anchor to port. The Port of LA is reporting a record average 11.5 days to unload ships once at berth.

“Despite reports of import cargo being cleared off docks, our members still can’t access their import containers or return empty containers, yet are still being charged demurrage and detention fees for a situation that is completely out of their control,” he said.

“Your leadership in bringing all parties to the table and finding solutions has never been more important as the July 1 expiration of the current West Coast port labor contract looms over the current crisis,” Lamar added. “Even in the best of times, port labor contract negotiations have led to employer lockouts, worker strikes and worker slowdowns, all of which have wreaked havoc on shipping and supply chains. We need your leadership to ensure that both sides come to the table now to negotiate and reach agreement well before the July 1 deadline.”