Coming Down the Pike: More and more boxes on the way

LONG BEACH, June 8 – US container ports will eventually return to a more normal state following two years of disruption by the coronavirus pandemic, with greater balance between imports and exports expected than in recent years. But it will be at least another year – and possibly two – before anything like the pre-pandemic “normal” returns. 

That’s the view of seasoned experts and it means plenty of business for the US trucking industry, particularly the drayage sector, with little or no let-up in cargo coming across the Pacific for the foreseeable future. While there could be a spike or surge in throughput, there’s unlikely to be a dip – barring any further quirks of the unpredictable coronavirus pandemic.  

“If we were to look at the first four months of 2022 versus the first four months of 2019 pre-pandemic, in terms of us containerized imports from Asia, those volumes were up 31%, which is a growth rate that far exceeds anything that had been seen in the decade prior to that point,” said Peter Tirschwell, Vice President for Maritime & Trade at S&P Global Market Intelligence. 

Improvements coming 

As a result of that 31% growth rate, Tirschwell told the Agribusiness Supply Chain Forum, “you are now seeing a fairly disrupted situation right now in North America, which has to play itself out before there’s going to be any real normalcy that is restored.”

“As time goes on, I think that we could potentially see some moderating this year which would, hopefully, begin to restore the system back to some level of normalcy,” Tirschwell told the online audience on June 7. 

Gene Seroka, Executive Director of the Port of Los Angeles, sees the return to normalcy taking a little longer than the present year, telling CNN the same day that it will be “some time” before everything gets back to pre-pandemic levels and that means “probably the second half of 2023.” 

Seroka said his port has seen “no precipitous drop in cargo volume” through 11 weeks of the lockdown in Shanghai, saying that “the folks in China, specifically the central government and the ports have prioritized that cargo, including the trans-Pacific runs here to Los Angeles, and Southern California cargo volume output has been very steady.”  

Delays are inevitable

He did acknowledge that “with all of this cargo flowing, the lockdowns, and all the other variables in the supply chain equation, it’s taking cargo a little bit longer to leave the port of Shanghai to go inland in China,” referring to exports from the US, Europe and other Asia countries. 

That means there are “hundreds of ships” backed up outside the port of Shanghai waiting to be unloaded, reloaded and sent back to sea. But he downplayed the idea of any major surge in cargo heading back across the Pacific, saying that many of the ships off Shanghai are involved in inter-Asia trade. 

In any case, he said, “as the cargo continues to flow through these ports, delays are to be expected, but the folks on the ground are managing this very well.” 

Fanfare as Shanghai re-opens

Shanghai formally lifted its lockdown on June 1 and, according to VesselsValue, a shipping data provider, the average waiting time for a container vessel has been reduced by nearly 45%, dropping to 31 hours at Shanghai Port from a peak of 69 hours in late April.

On June 7, the South China Morning Post reported that most major shipping lines have made plans to return to the “dozens of harbors” along Shanghai’s 200-kilometer coast, “looking to secure more orders from exporters getting back on their feet” after the lifting of the lockdowns.

“There has been fanfare surrounding port operations in Shanghai because container cargoes and carriers are returning to the city in droves,” Xiong Hao, an assistant general manager at Shanghai Jump International Shipping, told the paper. “Exporters are eager to send their shipments overseas, even with the higher freight costs.”

Seroka acknowledged that there will be an “uptick” in the amount of cargo heading across the Pacific to the Port of Los Angeles, but “not as dramatic” as some observers have called for and he suggested his facility is up to the challenge. 

“The speed by which the cargo is being unloaded is now best in class,” he said. “Once again, we’re also seeing the flow of cargo improving on our docks, going out into the domestic economy here in the United States with those wait times of containers, starting to come down in noticeable levels.” 

Those improvements in discharging cargo have been achieved despite the spectacular rise in throughput, with Seroka noting that “We had our best first quarter on record and second-best April ever. And when we announce our May numbers this Friday, they will be sensational.” 

In a word, there will be no shortage of containers coming down the pike.