Carriers will be increasing capacity from Asia to US West Coast ports by 22 percent. The influx of the additional capacity will last through the end of the year. US East Coast ports will also see an increase in capacity through the end of the year by 14 percent. Carriers had hoped these additional measures would help shippers meet the surging demand which is expected to last through Q1 2022. While the additional capacity is welcome news for shippers, the impact of adding more capacity to an already stressed US infrastructure has created even more challenges for all stakeholders.
US ports have been struggling all summer to keep up with the number of ships to be unloaded. On any given day, there can be 40 ships anchored outside of Los Angeles and Long Beach ports awaiting space at the terminal. The backlog of ships is causing severe congestion issues at the ports. Simply put, there is not enough port space, truckers, available chassis or rail capacity to handle the number of containers being imported into US ports.
All projections show strong US container imports through the end of this year. The months of August, September and October will likely set monthly records for the number of containers imported into the US. Industry analysts warn that the congestion is going to get much worse during these months. Some service providers are reacting by announcing “congestion” surcharges. The providers claim the surcharge is necessary to help offset the added costs associated with infrastructure delays when moving a container to its final destination.
The congestion issues facing all facets of the US supply chain will continue to reduce the effective capacity available in the Asia to US trade. Adding more ships to the trade is no longer the answer to the problem. Fixing the antiquated US infrastructure is the only real solution. Unfortunately, improving the US infrastructure requires long term solutions which will take years to implement. As usual, shippers will be forced to navigate around the congestion issues in hopes of getting their product delivered in time for the holiday shopping season.
