Updated: Nov 23, 2020
Long-term congestion is now proving to have more serious implications in both the far east and at major US ports.
Backlogs at Los Angeles-Long Beach are making it difficult to acquire basic equipment, such as chassis, and truckers have been increasingly difficult to hire. Between the requirement of dual transactions, long turn times, and general confusion, even high wages aren’t enough to bring on new truckers. On the East Coast, New York – New Jersey is equally congested due to additional volumes from extra loaders stalling there, as well. Our partners across the Pacific are not faring much better. This long and extraordinary peak season has left carriers with a severely dwindling supply of available equipment in Asia at the ports of loading.
“We are seeing equipment availability and space shortage reach a critical point,” said Anthony Fullbrook, president of OEC Group’s Northeast region. “Bottlenecks are popping up all across the supply chain and everyone needs to be prepared for this difficult environment to persist until at least Chinese New Year.”
Another developing issue that will have global repercussions is shortages in the global container fleet. The initial shock of COVID-19 threw a wrench into predictable, cyclical container supply and demand. Containers simply weren’t needed, so manufacturers relaxed production of new units, and carriers preemptively began increasing their scrapping cycle for the most beat-up units. When demand shot up just a few months ago, manufacturers of new containers were slow to replace scrapped inventory, let alone keep up with additional demand, adding further pressure to existing inventory.
“In the end, customers need an advocate to ensure that their cargo gets to its intended destination as quickly as possible,” said Peter Hsieh, regional vice president of sales and marketing for OEC Group. “These days, customers need to choose a recognized market leader with a known voice to work on their behalf, otherwise their cargo may be delayed for much longer than originally intended.”