News

For container lines and ports, what a difference a year makes| DC Velocity


A year ago, as ship lines entered 2020, they were laying up vessels and canceling sailings in response to soft volumes, while also facing the looming impact of new emissions standards that mandated use of ultra-low-sulfur fuels or equipping ships with exhaust-cleaning systems. 

Then the pandemic arrived. Volumes in an already tepid market fell off the deep end. Ship lines parked more vessels. Ports cut operations, sent employees home to work, and took other measures to adapt.

“When production [from Asia] slowed and ship lines canceled sailings, we saw double-digit drops in cargo” from the spring a year ago, recalls Beth Rooney, deputy port director for the Port Authority of New York & New Jersey. 

Then just as quickly as volumes disappeared, they returned—with a vengeance. 

“As we ended July in negative numbers, and turned the page to August, we went from a double-digit decline to a double-digit increase,” with strong volumes continuing through November, Rooney noted. That reflected shippers who were responding not only to the pandemic’s initial impact but also to concerns over a second wave. “In anticipation of another shutdown, they are throwing as much cargo into the supply chain as they can, creating a ‘just-in-case’ supply chain,” whereas before, the industry convention was to embrace just-in-time practices, which limited on-hand inventories. “The port as a community has had to adjust very quickly.” 

 “THE WEIRDEST ECONOMY” IN MEMORY

The initial pandemic-driven surge turned out to be the opening act in a historic uptick in ocean cargoes, catapulting 2020 into, in the words of one port official, “the weirdest economy” in memory. What was normally a spring and summer peak season was supercharged by pandemic-related consumer buying of goods of all types, as well as a crush of orders for personal protective equipment and related health-care supplies. Add to that massive inventory rebuilding by supply chain managers who shifted from just-in-time to just-in-case tactics. And then the traditional holiday shipping surge joined the party.

By November and December, demand, particularly in the all-important Asia-Pacific–to–North America trades, was off the charts. Containership lines pivoted and put every vessel they could muster on the water.

The flood of ocean cargo isn’t expected to ease soon. The consensus among industry executives is that the surge in cargo and the dearth of container capacity will continue well into 2021. And as the U.S. copes with a renewed surge in Covid cases, just-in-case supply chain stocking is expected to keep trucks and warehouses full into the spring.

All this has meant historic records—and unprecedented challenges—for many U.S. ports. In October, the Port of Long Beach handled over 806,000 containers, an all-time monthly record, says Mario Cordero, the port’s executive director. “That’s the first time we reached that milestone in our 100-year history,” he notes. “Add to that what L.A. [the Port of Los Angeles] moved and you’re talking about 1.7 million containers” moving through the Greater San Pedro Basin complex. “That’s more containers than most of our major gateways in the U.S. move in a year,” he says. 

And the beat played on. November’s volume of 783,523 TEUs (20-foot equivalent units) at Long Beach was a record for that month. In early December, the San Pedro Bay resembled a giant containership parking lot, with some 20 vessels at anchor waiting for a berth.

While the record volumes certainly presented—and continue to present—challenges, Cordero cites several complete or near-complete infrastructure projects that helped ease the congestion. One was the new $1.5 billion Gerald Desmond Bridge, which opened in the fall of 2020 and has three traffic lanes and an emergency lane in each direction (versus two on the old bridge). Some 65,000 vehicles a day cross the bridge, whose raised height also permits larger ships to…



Read More: For container lines and ports, what a difference a year makes| DC Velocity

Products You May Like