June 2022 – Ocean Update
By NNR USA In Insight On 9th June 2022
Tip of the Month
We are expecting another chaotic peak season and no relief when it comes to congestion, shortage of equipment, and all other matters that the industry is facing so far. That being said, we recommend planning as early as possible for shipping your cargo.
The Covid-19 pandemic situation in Shanghai is now under control, with the lockdown lifted last week. Factory production is ramping up as raw materials are delivered to manufacture goods. We expect high demand for ocean containers and vessel space as products are ready to ship. The timing coincides with the traditional peak season imports to the USA for back-to-school and holiday season goods needed on the shelf in August.
The ongoing ILWU-PMA negotiations are still in the works with caution and anxiety from all industry stakeholders. It's possible we won't see any resolution on the West Coast until June 30, the day the labor contract expires. Labor union strikes are a possibility, though all parties are striving for resolution.
As a precaution, shippers are hedging against the risk of West Coast labor disruptions by shifting cargo volumes to U.S. East and Gulf Coast ports. The West Coast's share of U.S. imports from Asia has fallen to 58.2%, from 60% in 2021. East Coast ports gained a 1.1% share to reach 34.7%, and Gulf Coast ports grew their stake by 0.7% to 6.8%. Carriers also deployed more services to the U.S. East Coast, increasing by 40% over the 2021 full-year average.
- Major U.S. & Canadian ports continue to face challenges with congestion and equipment shortages:
- Los Angeles: Vessel wait time ranges 5-15 days due to yard congestion, high import dwell and labor shortage.
- Long Beach: Vessel wait time ranges 14-17 days due to high import dwell and labor shortage.
- Oakland: Vessel wait time ranges 7-10 days due to high import volume and labor shortage.
- Houston: Vessel wait time ranges 2-10 days due to high import volume, labor shortage and vessel bunching. Chassis shortages due to ongoing congestion.
- Chicago: Chassis shortages causing some delays in pickups and deliveries.
- Charleston: Regionwide chassis shortage causing extended delays in pick-ups, deliveries, and dray to/from rail facilities.
- Savannah: Vessel wait time ranges 5-8 days due to high import volume, vessel bunching, and construction.
- Vancouver: Vessel wait time around 35 days, yard is at 100% capacity.
Port Notables
Shanghai
- It would take about 3-4 weeks before 100% of the staff will be able to work from the office in Shanghai.
- Ocean export warehouses in Shanghai are fully operational. Nevertheless, there are still problems with trucks getting into Shanghai.
- Ocean Import warehouses are fully operational but very congested.
- Shanghai Yangshan terminal keeps normal operations.
- Shanghai WaiGaoQiao Terminal keeps normal operations with some delays.
- Customs Clearance keeps partial and limited operations in customs inspections.