Freight News:
Glimmer of hope: Has the ship gridlock off ports finally peaked?
Port congestion — which dramatically worsened in the second half of 2021 — appears to have temporarily peaked, although it’s too soon to tell whether it’s a reprieve before the next runup, a high-level plateau, or the beginning of the end.
The number of container ships waiting for berths at the ports of Los Angeles and Long Beach fell to 84 on Monday, the lowest tally since Nov. 2, 2021, and down 23% from the all-time high of 109 on Jan. 9.
Whether due to seasonality or other factors, the recent pattern of ships waiting off Southern California has mirrored what happened the year before. The backlog grew throughout the fall, peaked around year-end, then began declining in the first few months of the year. In 2021, the queue numbers fell from February until the third week in June, then began climbing again.
Commenting on port congestion worldwide, John Coustas, CEO of container-ship owner Danaos (NYSE: DAC), told analysts on Tuesday: “We have seen a steady situation at the ports. It is not worsening but it is not getting better either. It has stabilized.”
To some extent, reduced congestion at some ports may be increasing congestion at others. As one freight forwarder told S&P Global Platts: “SoCal is still a mess [that] everyone’s trying to avoid, and that puts pressure on Gulf and East Coast destinations.”
On Tuesday afternoon, there were 20 container ships anchored off Charleston, South Carolina, more than triple the number a month ago.
Other congestion indicators
The New York Federal Reserve recently launched a monthly indicator called the Global Supply Chain Pressure Index (GSCPI), aggregating 27 different variables.
On Jan. 28, GSCPI numbers were retroactively tweaked through November and the December index number was released.
The GSCPI now shows a peak in October at 4.37 standard deviations above the average level of global congestion, followed by small declines over the next two months, bringing the GSCPI to a still extremely high 4.246 standard deviations above average. While the GSCPI has gone down, its pullback is much less significant than the decline in the West Coast queue.
Another congestion indicator is published weekly by Flexport: the Ocean Timeliness Index (OTI). There have been some small pullbacks from the recent all-time high in the trans-Pacific eastbound OTI, but not enough to confirm a downward trend in congestion. As with the GSCPI, the OTI shows far less of a recent reversal than the West Coast ship queue.
During the week ending Sunday, the OTI indicated that it took an average of 110 days for cargo to get from a factory in Asia to the exit gate of a North American port, the same time it took in late December. The latest transit-time average is down from the record of 114 days in the second week of January, yet still up 42% year on year.
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Source: https://www.freightwaves.com/news
Editor: Greg Miller, Senior Editor