Container ship congestion easing at Pacific coast ports as shippers look to Atlantic

HOUSTON (ICIS)–The backup of container ships at the Pacific coast ports of Los Angeles and Long Beach has reached a new low as some shippers have shifted volumes to Atlantic coast ports, which are also beginning to see increased congestion.

Container rates from east Asia and China to the US West Coast edged lower this week while rates to the East Coast ticked higher, according to online freight shipping marketplace and platform provider Freightos.

Judah Levine, head of research at Freightos, said shippers are expecting continued strong demand from US consumers, which is likely to maintain upward pressure on rates in the coming months.

Prices for shipping containers from Asia remain two to three times higher than year-ago rates.

Ongoing pressure resulting from Russia’s invasion of Ukraine continues to cause uncertainty across trade routes amid diversions and cancellations around Black Sea ports.

Container shipping analyst John McCown said in his monthly McCown Report for February that container imports into the 10 largest US ports was up by 15.6% and was driven by increased volumes to the East Coast.

McCown noted that February was the ninth straight month in which the year-on-year percent change in volume at Atlantic and Gulf Coast ports outperformed Pacific coast ports and offered three reasons.

First, the initial surge of volumes during the early months of the pandemic disproportionately benefited Pacific coast ports, which is impacting current comparisons.

Second, shippers have elected to change routes to avoid the much-publicized congestion at West Coast ports.

Third, he said a subtle but consistent underlying coastal shift continues.

“That trend results from reduced linehaul costs of moving containers in all or more water vessel service to the east/US Gulf Coast compared to cross-country intermodal service via the West Coast,” he said.

However, current data available from some Atlantic coast ports shows the backlogs are still within recent levels.

At the port of Charleston, there were about 30 vessels at anchor on 18 February.

As of 25 March, there were about 22 vessels outside of the port, according to VesselFinder.com.

Source: VesselFinder.com

The port of New York & New Jersey had seven container ships at anchor on 24 March, according to the port authority.

The ports averaged 10 container ships waiting per day for the week ended 18 March.

Weekly average wait time at anchor for the same week was 3.39 days, which is below the year-to-date average wait time at anchor of 3.85 days.

At South Carolina Ports, including the port of Charleston, there were 23 container ships anchored offshore, with five docked.

Congestion at the US Pacific coast ports of Los Angeles and Long Beach continues to wind down, according to the Marine Exchange of Southern California (MESC).

As of 25 March, there were 39 containerships backed up at the twin ports, which is a new record low, MESC said.

The ports are delaying consideration of the “container dwell fee” for another week as they have seen a combined 64% decrease in aging cargo on the docks since the programme was announced on 25 October.

The ports were planning to charge $100/container, increasing by $100 increments per container per day until containers left the terminals.

Container ships are relevant to the chemicals industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.

CHINA COVID OUTBREAKS
The chemical industry is continuing to focus on China, as recent COVID outbreaks and that country’s Zero-COVID policies led to the closure of some factories.

Shenzhen, where the major port of Yantian is located, lifted a 7-day lockdown on 21 March.

Levine said that ports in the region remained operational during the lockdown and seem to have avoided significant backlogs like what was seen at the port of Yantian in May.

Global shipping major Maersk notified customers that it will omit port calls to the ports of Yantian and Shekou.

Focus article by Adam Yanelli

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Thumbnail shows container ships. Image by YONHAP/EPA-EFE/Shutterstock.