Global News Continued US import growth points to summer port congestion

Nonstop growth in US imports from Asia through the first four months of 2022 — during what typically is a slack period in the eastbound trans-Pacific trade — have major ports and transportation providers warily eyeing the possibility of renewed supply chain gridlock this summer. New data suggests those concerns are valid, particularly if still-rising imports collide with the start of peak shipping season and the return of normal cargo flow from post-lockdown Shanghai.

US imports from Asia totaled 6.5 million TEU this year through April, up 2.7 percent from the same period last year, according to PIERS, a JOC.com sister product within IHS Markit, now part of S&P Global. April imports of 1.7 million TEU, highest in 13 months, were up 6.5 percent over April 2021 and the third-busiest month on record for Asian cargoes into the US.

Data also showed that imports this year have declined into the West Coast while rising — in some cases substantially — at ports along the East and Gulf coasts, fresh evidence of shippers diverting some freight away from the West Coast ahead of longshore contract talks that began last week.

David Bennett, COO at the forwarder Farrow, said the strong imports Farrow handled in April, and even larger volumes that have been moving in May, have him baffled.

“The volumes indeed are stronger than what I would have anticipated,” Bennett said.

The Port of Los Angeles on Tuesday said it handled 887,357 TEU last month, the second-busiest April in its 115-year history. For the four months through April, the port handled more than 3.5 million TEU, which it said was 1 percent ahead of its record pace of last year.

“While we don’t expect any abrupt changes, the situation in China may lead to a lull in volume with a fairly quick bounce back once the lockdowns end,” Gene Seroka, the port’s executive director, said in a statement.

In a subsequent interview with JOC.com, Seroka said Los Angeles hopes to prevent a rerun of last summer’s terminal congestion by asking drayage carriers to make greater use of available gate hours, 53 percent of which go unused, and urging railroads to increase intermodal capacity to the Southern California gateway to increase cargo flow.

“We’ve got to get those containers off the terminals,” Seroka said. ‘Broken’ US supply chains Seroka and Bennett foresee a convergence of peak season shipments, continuous replenishment by retailers of online shopping merchandise, and a possible sudden boom in shipments from Shanghai, the world’s largest container port, in the second half of the year. They are concerned about the impact any further growth in volumes will have on a trans-Pacific supply chain already under immense pressure from Asian imports that were up 31.2 percent in the first four months of 2022 compared with pre-pandemic 2019.

Bennett said it would not take much to send major US ports and inland supply chains into gridlock. “The supply chain is broken, it’s been broken, and it will remain broken” if US ports, especially those on the East Coast, do not quickly address their congested terminals and vessel backlogs, Bennett said.

Retailers since the beginning of the new year have been diverting some of their imports from West Coast ports to the East and Gulf coasts as a hedge against possible disruption linked to West Coast longshore contract talks that began last week. That is typical behavior in a year when the contract between the International Longshore and Warehouse Union and the Pacific Maritime Association is set to expire.

In the first four months of the year, US imports from Asia declined 3.7 percent to the West Coast while jumping 9.6 percent to the East Coast and 35.4 percent to the Gulf Coast compared with the same period in 2021, according to PIERS.

Those ports are experiencing the largest import surges and struggling with some of the worst congestion and vessel backlogs. Asian imports through April increased 12.8 percent in New York–New Jersey, 8.8 percent in Savannah, 11.4 percent in Norfolk, and 38.2 percent in Charleston year over year. Houston, which saw Asian imports spike 46.3 percent in the first four months of 2022, has experienced intermittent trucking and chassis shortages and longer gate times, but has largely escaped the long lines of vessels waiting to berth outside major West and East coast gateways.

Imports from Asia during the same period declined 3.9 percent in Los Angeles–Long Beach, 7.2 percent in the Northwest Seaport Alliance of Seattle and Tacoma, and 7.7 percent in Oakland. Although West Coast ports are also experiencing terminal congestion and vessel backlogs, the issues are not as severe now as they were during the 2021 peak season.

In Los Angeles–Long Beach on Monday, for example, 35 container ships were backed up off the coast or slow steaming toward Southern California, four of which were at anchor awaiting berthing space, down from 109 vessels on Jan. 9, according to the Marine Exchange of Southern California.

Seroka said shipping lines demonstrated last year they were able to relatively quickly divert vessels from other trade lanes into the booming trans-Pacific, and he believes there will be an injection of additional capacity to the West Coast if the International Longshore & Warehouse Union (ILWU) and Pacific Maritime Association (PMA) agree to a contract before the peak season begins.

“They’ll just reshuffle the decks and move vessels here from other trade lanes,” he said.