December 19, 2023 Is it Time to Worry About Port Congestion Again?

The necessity for shippers and stakeholders in the supply chain to proactively find solutions to combat US port congestion.

by Bryn Heimbeck, President and Co-Founder of Trade Tech

Mr. Heimbeck strongly asserts the necessity for shippers and stakeholders in the supply chain to proactively find solutions to combat the persistent problem of entering the dreaded “congestion zone.” In the subsequent discussion, he underscores the significance of confronting this challenge directly.

He emphasizes the timeliness of the Council for Supply Chain Resilience, which has been announced by the White House. There are several critical realities that the US Supply Chain Market is currently confronting, such as:

• Carriers have an enormous number of new vessels on order and coming on line now.
• New tonnage is driving freight rates down, although they seemed to plateau over the summer peak season.
• According to Reuters, the US Economy experienced an impressive growth rate of 5.2% in the 3rd quarter, and there are indications of continued strong growth.
• The Panama Canal’s low water levels have significantly reduced the number of vessels able to pass through, leading to a decrease in traffic at US West Coast ports.
• Container movements are up from the end of last year according to Descartes’ Datamyne. (See chart.)

The pivotal point here is the level of container throughput in the ports. This was the main bottleneck in 2020 – 2022, and it will continue to be a challenge until the ports’ capacity is expanded, either through capital development or process changes yielding greater efficiency.

Further, it is worth mentioning that container volumes in October have reached the same level as when port congestion started in 2020. Although it is expected that seasonal volumes will decrease from November to February, if normal conditions prevail from March onwards and the economy keeps growing, with carriers rerouting vessels away from the Panama Canal, then we can anticipate port congestion similar to rush hour traffic in a big city. Congestion is an inevitable result when traffic volumes exceed a known point.

Call To Action

Now is the time for the industry and the government to move forward quickly in exploring innovative ideas and approaches to improve cargo management. Instead of waiting for years for capital projects to be implemented, focusing on process changes offers a more promising solution to alleviate port congestion.

As such, it is crucial to give serious consideration at leveraging the data received by US Customs from ocean carriers and NVOCCs in compliance with the 24 Hour Rule. This data includes all legal shipments, adheres to the standardized requirements of US CBP, is either complete or otherwise rejected, and yields full accessibility visibility that so many in the market have called for.

About the Author
Bryn Heimbeck has been a pioneer in the Global Logistics and Supply Chain Industry for more than 25 years, championing the Cloud, Digitization, and the Internet as the most powerful new technologies available to this industry. 

Heimbeck partnered with co-founder Kevin Clark in 1997 leveraging the Internet to create a global transportation management system on a single, globally accessible, multi-tenant platform which is connected to ocean and air carriers as well as Customs agencies around the world.

Trade Tech is the result of Heimbeck’s initial career in the shipping and logistics business. This created his first hands-on experience with technology to improve the management of large volume cargo flows.  His experience taught him that logistics customers need consistency and predictability in their supply chains, and that digitization and automation are powerful tools for a Forwarder to deliver on the customer’s expectations.  Heimbeck has grown Trade Tech’s global presence to include nine offices around the world.

About Trade Tech
Since 1997, global logistics solutions provider Trade Tech has been developing world-class applications that link shippers, importers, Customs House Brokers, consignees, NVOCCs, carriers, truckers, warehouses, and forwarders, providing visibility of the movement of goods throughout the supply chain. The Trade Tech multi-tenant platform offers its customers a streamlined approach to elevate efficiency within their supply chains, enhancing visibility, increasing connectivity, reducing costs, and minimizing errors. Trade Tech customers enjoy access to the latest applications and data anywhere in the world every time they log on to the Trade Tech network – without any software downloads. For more information, please visit: tradetech.net.

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