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New Data Dives Into Container Shipping’s ‘Big Unknown’

A new Project 44 report said January saw a reduction in port congestion in the U.S. West and East Coast ports, as workers cleared a substantial backlog amid Covid outbreaks among port workers.

While there was some easing at U.S. ports, including Los Angeles and Long Beach, congestion shifted over to Asia’s marine gateways. According to Project 44 intelligence, the number of ships waiting to berth at U.S. ports, on average, fell to 7.4 ships per day in January from 14.1 ships per day in December.

“In January, there were signs of improving conditions at some ports, however, we still have a way to go before there is a return to normalcy,” Josh Brazil, director of supply chain insights at Project 44, said. “Whether or not there will be enough empty containers positioned in the right locations after the Lunar New Year is a big unknown right now. If they are not, we may see further delays.”

European ports also saw a month-to-month average decline to 5.6 ships per day last month from 6.5 ships per day in December. However, from December to January, Asian ports, on average, recorded an increase to 16.7 ships per day from 13 ships per day. Of the Asian ports, Hong Kong recorded the biggest increase, to an average of 22.5 ships per day in January from 17.5 ships per day in December.

Project 44 said January saw port congestion reduction at U.S. West and East Coast ports, as workers cleared a substantial backlog.
Congestion at U.S. ports versus Asian ports. Courtesy

This increase in congestion has been attributed to new Covid outbreaks in Asia and specifically in China. Project 44, an advanced visibility platform for shippers and logistics service providers, cited a Maersk update stating that container loading and discharge operations have been proceeding as usual at the Chinese ports of Ningbo, Tianjin, Shenzhen, Dalian and Guangzhou. However, Maersk said the district-level lockdowns and mass testing led to warehouse closures and trucker shortages.

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Project 44’s report said January was a mixed bag for berth time–the time ships spent in the port for container loading and unloading operations. Compared to the 2021 average, time at Canada’s port of Vancouver jumped due to weather issues, while the time that ships spent at berths in Long Beach and Los Angeles declined, in part due to a falloff in import volumes in December and the ability of workers and road carriers to clear out containers during the month.

While data indicates a marginal decrease in the ship berth time in Los Angeles, the average time that a ship in Los Angeles spends at berth is 10 times greater than it spends in Shanghai, “indicating the huge gap in port productivity at the largest port in the U.S.,” Project 44 said.

Although the report found a slight increase in available shipping capacity from December to January, this metric was still at around 82 percent of January 2021’s level.

“While this slight increase from December to January proved beneficial for shippers needing to replenish inventories ahead of the Lunar New Year on Feb. 1, the increase was not enough for retailers facing low inventory levels and strong demand,” Project 44 said.

Discussing container availability, the report noted that many outbound containers are empty and are being sent back to Asian ports and manufacturers to reload and ship as full containers back to U.S. ports. At the end of January, the Port of Los Angeles was saddled with around 62,253 empty containers to be shipped out, according to Project 44. The port shipped out 3.95 million empty containers in 2021 compared to 1.18 full containers.

“The period around the Lunar New Year is typically a quiet period for the ocean freight market due to the closure of many Asian manufacturing facilities in observance of the holiday,” Project 44 said. “While the ocean freight market will likely see a slight lull during February, we expect demand will pick up once again once manufacturing facilities reopen. The potential for further port congestion is likely in the coming month as U.S. retailers and other shippers replenish and increase safety inventories.”