Container entering a port

Is Port Congestion Finally Easing?

The pandemic brought with it a tidal wave of challenges, many of which are still impacting the supply chain.

Companies have adapted with perseverance in the face of huge ecommerce spikes, manufacturing slowdowns, high demand for warehousing space, driver shortages, and a massive backlog of shipping containers at ports waiting to be unloaded — not to mention high container freight rates, long turnaround times, and container shortages.

But there’s a bright spot emerging at the end of the tunnel: After nearly three years of port congestion and port delays, we’re finally seeing things ease. 

What’s causing port congestion to abate, and what can we expect to see moving forward?

Port congestion update: What has changed?

Inflation is on the rise. This means consumers are buying fewer goods, and retailers and shippers are seeing a buildup of dead stock. This is a huge shift from the early days of the pandemic, when businesses were scrambling to fill warehouses to avoid running out of inventory in case of future manufacturing slowdowns or shutdowns.

With lower demand for goods, current port congestion is beginning to ease, with 35% fewer container ships queued in North American ports. As vessel wait times lessen, ports operate at reduced capacity, and container turnaround decreases, freeing up capacity in the market.

Likewise, container freight rates have fallen — by up to 13% on routes like Shanghai-Rotterdam and Shanghai-New York — and container prices are 64% lower than this time last year. In fact, container shipments from Asia to the U.S. for all products except rubber products in September are down year on year. According to Nomura Bank analyst Masaharu Hirokane and data from Descartes Datamyne, this is likely because U.S. retailers are reducing inventories due to the risk of an economic slowdown

It should be noted that while port congestion is easing, it’s still above average for now. As of mid-October, there were fewer than 100 container ships waiting at North American ports, but 99 waiting offshore. Pre-COVID, these numbers were in the single digits.

What does the future look like for port congestion and port delays?

If these trends continue and retailers stock less product than usual, port congestion should continue to slacken through the end of the year. It’s quite a different scene from the past 2.5 years, when skyrocketing demand caused port delays, nonstop shipping container shortages, and high container rates.

And as imports continue to decrease — U.S. imports fell 12% in September versus August — space that was tied up is now available for cargo, which will help bring down ship backlogs throughout the rest of 2022. We’re also seeing sliding container demand and prices now that there are extra empty containers waiting to be filled.

How GlobeCon can help

The nature of ports is always complicated, pandemic or not. But no matter what’s going on, GlobeCon can help you get your shipments where they need to go on time. With industry-leading technology, superior warehousing and logistics flexibility, and customized solutions, we’ve been a trusted industry leader since 1988.

We treat each container as if it were our own and offer you complete transparency into every stage of handling your shipments, providing some certainty in uncertain times.

Need a reliable partner at the ports of Los Angeles and Long Beach? Contact us.