Main Ports Port Congestion Status

During the pandemic, the biggest and long-term impact on container ship freight rates is port congestion. Due to the impact of Covid-19, port operations fell, and at the same time, tight vessels and cargo volume combined, raising freight rates.

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1.     Effect of transport volume transfer due to fears of a strike in the US West Coast

 

Ref) ILWU Issue (Updated on 6/28) (tistory.com)

ILWU Issue (Updated on 6/28)

Ref) ILWU Issue (Updated on 6/15) (tistory.com)

ILWU Issue (Updated on 6/15)

 

 

The ILWU-PMA negotiations for the western US ports, which have been consistently discussed in previous articles, are still at a standstill.

Ahead of the contract negotiation expiry date (July 1, 22), shippers transferred cargo to the US East Coast to prevent damage from strikes in advance. As shown in the figure above, it can be confirmed that this phenomenon has occurred since February 22nd.

In other words, congestion at the West Coast (LA/LB) port in the US started to decrease from April 22 due to the transfer effect and concerns about FMC, and the congestion vessel at the East Coast (New York) port in the US increased rapidly from May to September 22.

 

However, both the West Coast and East Coast of the US have been rapidly declining since October 22, due to a decrease in cargo volume due to concerns about an economic downturn.

 

1. Loss of West Coast (LA/LB) decline: -77% in November 22nd compared to November 21st (recent peak)
2. Decrease in New York: -32% in November 22 compared to July 22 (recent peak)

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2.     Port Congestion of major European ports

Wage negotiations for port workers are fierce due to global inflation. Among them, port strikes are continuously taking place in Europe. Let's take a look at the congestion status of three major European ports.

 

Rotterdam (August 22nd), Antwerp (May 22nd), and Hamburg (September 22nd) can confirm that port congestion recorded the highest point in recent years. Despite the fact that there is a freight rate increase that prevents ships from operating in time due to continued detention in ports, the effect of congestion in all three ports has been noticeably decreasing since October 22nd due to the recent global demand reduction issue.

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3.     Chinese Port Port Congestion

Let's take a look at the demurrage status of China's representative port (Shanghai). You can immediately see the impact of the Shanghai port due to the Chinese lockdown in April 22nd. As the port did not operate properly, container ships continued to wait in the port (outer port/inner port), and in April 22, a whopping 403,000 TEU ships were waiting.

 

However, in the case of China, it should be noted that as of November 22, as the zero-corona policy continues, it is still recording a higher level of deduction than the average of 21, 20, and 19 years, respectively.

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4.     Global Port Congestion Ratio

Finally, let's look at the ratio of ships waiting in ports around the world to the current container capacity. The last two cases stand out. The first recorded 36.9% in October 21, and the second recorded 37.2% in July 22. In other words, since such a high level means that many ships are waiting in the port, the effect of 1) an increase in freight rates or 2) the lay-up effect due to a decrease in cargo volume can be compared.

 

As of November 22nd, it was 33.4%, which is still higher than the pre-pandemic period (16-19 years).

 

Thank you.