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One ‘door’ closes and another one opens…

One ‘door’ closes and another one opens…

BY Peter Raven, Editor-In-Chief, CargoNOW

The Port of Los Angeles, has finally begun to reduce its container and shipping logjam which started building up as far back as November 2020. It was reported that in February of this year, there were as many as forty container vessels at anchor outside the port and the average time sitting was about eight days.

Today however, the situation has improved with the number of ships at anchor outside the port having dropped significantly and this will be further improved when the issues with rail connectivity from the port are progressively resolved.

In the origin port however, the situation has deteriorated. The Port of Yantian in Shenzhen has continued to suffer problems over the past week due to what seems to be the effects of a COVID-19 outbreak in the region. The impact of reduced port productivity is resulting in a reported 20,000 container backlog and a string of shipping lines diverting to other terminals in Guangzhou.

It is presumed that the reduction in port productivity is the impact of Chinese lockdown policies on the ability of staff at the port to get to work.

In addition, congestion is now occurring in parts of Europe, with the Port of Hamburg in particular reportedly suffering from a mix of higher container volumes and protests blocking the roads into the port. Some shipping lines have temporarily begun to divert services to neighbouring terminals.

The issue of congestion being experienced in a number of ports is part of a broad based east-west problem across the world. Consumer demand at the global level continues to be very unbalanced, with the US, in particular, continuing to experience near-boom conditions whilst China has focussed on supporting state-owned enterprises rather than private consumers. On the positive side, these problems also point to continued robustness in global trade, quite different to the fall in intercontinental traffic predicted last year. This is likely to require a continued level of investment in new capacity in logistics infrastructure such as ports and also equipment such as shipping containers which are in short supply due to an imbalance in trade volumes across the world.

 

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