By Supply Chain Dive
This brief was published by Supply Chain Dive October 11, 2021.
Import volumes at major East Coast ports continue to climb following a surge in demand last year, according to data from each port. Persistent congestion at the Ports of Los Angeles and Long Beach has drawn further interest in the East Coast, as importers look to mitigate shipping delays.
The Ports of New York/New Jersey, Virginia, Charleston and Savannah handled a combined 900,326 in imported TEUs in August, nearly 11% more than they handled the year before. The ports say investments they are making to boost efficiency and capacity will help counter congestion issues.
Judah Levine, head of research at Freightos, said in an emailed analysis "the epic delays at LA/Long Beach have sent many importers looking for other options. But that shift in volumes is now causing congestion at West Coast alternatives like Seattle and Vancouver, and East Coast ports like New York/New Jersey and Savannah."
Frenzied import activity to meet U.S. consumer demand isn’t exclusive to the Asia-to-West Coast shipping lane, and neither are the congestion problems plaguing the current ocean freight environment.
Flexport said in a market update last week that East Coast terminal congestion is "not easing with Savannah now counting 27 vessels waiting for berth." The Georgia Ports Authority, which marked August as its second-busiest month in history, will add 1.6 million TEUs of capacity that will come online starting in December to better handle the surge.
"In three months, this investment will begin to deliver the additional capacity we need to better accommodate increased volumes and demand for our services," said Griff Lynch, executive director for the Georgia Ports Authority, in a statement accompanying the announcement in September.
South Carolina Ports President and CEO Jim Newsome said in a statement that more than $2 billion in infrastructure investments in recent years has helped it handle rising volumes. But it’s not immune to global supply chain stress. Green Worldwide Shipping noted in a market update that Charleston is encountering a severe chassis shortage causing delays in drayage.
"The slowdown in cargo velocity that we are currently experiencing due to a number of supply chain constraints is concerning as we head into the peak season this fall," Newsome said.
Any challenges East Coast ports may be facing haven’t deterred importers looking to avoid snags tied to the Ports of Los Angeles and Long Beach and the record volume levels they are encountering, with project44 saying carriers are "increasingly using the Panama Canal to reach the East Coast" to alleviate congestion challenges. Along the India-to-North America shipping lane, Flexport said importers should consider rerouting freight bound for the West Coast to the East Coast.
The Florida Ports Council is encouraging ships to unload at the state’s seaports to avoid Los Angeles and Long Beach congestion.
"Instead of waiting off the coast of California, cargo vessels can offload and move their product to Florida and other discretionary markets in the same time it takes to find space in an increasingly congested California," said Michael Rubin, Florida Ports Council President and CEO.
Importers who shift freight to the East Coast will have to contend with heightened shipping costs that are following the increase in demand. Freight prices from China/East Asia to North America’s East Coast were at $19,421 last week, up from $4,684 YoY, according to the Freightos Baltic Index. Demand isn’t expected to cool off any time soon, said Stephen Edwards, CEO and executive director of the Virginia Port Authority, in a statement.
"We are nearing the height of peak season and do not anticipate a let-up before year’s end," Edwards said. "Knowing that, we are focusing on remaining agile and fluid in our operations and continuing to invest in new assets that will increase our efficiency."