Port congestion in key Europe, US gateways continues to deteriorate: Sea-Intelligence

Terminal congestion at major US and European container ports has grown to new heights, with little indication of improvement amid sustained demand for ex-Asia goods, according to Sea-Intelligence.

Globally, 11.5% of operational capacity was unavailable during November 2021, the most recent data showed, a decrease of just under 1% on the month, the maritime data firm said in a Jan. 11 statement. This is up from a standard 2% of capacity being off market under normal conditions.

"Basically, 2021 was a year where demand grew 7% year-on-year and at the same time capacity effectively was reduced by 11%," CEO Alan Murphy said.

Improvement seen in the fourth quarter of 2021, particularly after the Golden Week holiday in China, was reversed as the pre-festive period import rush commenced and has continued into the new year.

European ports in particular are grappling with record levels of congestion, which have been increasing since October, with few positive indications in sight. Despite marginal seen at US gateways in the last week, data from the Sea-Intelligence Terminal Congestion Index show that congestion continues to trend higher.

Freight rates have climbed in tandem with increased delays and terminal slowdowns. After coming off record highs during Q4, the Platts Container Rate Index, a weighted average of Platts' key container assessments, has trended upwards since mid-December, climbing 7% since Dec. 14. The PCRI was assessed Jan. 11 at $7,140.17/FEU, an increase of nearly 65% on year, but still well below the all-time high of $7,645.37/FEU registered during the lead up to the Golden Week holiday in October.

"We might well expect to see a continued upwards push on freight rates on this trade, as the congestion is likely to have a negative impact on reliability, and hence in turn on available capacity," Murphy said.

Congestion impacting container turnarounds

Port slowdowns have severely hampered container turnaround times, even as ocean liners skew their business towards high-revenue generating headhauls, making every effort to quick evacuate empty containers from destination ports.

"Severe congestion in many destination ports saw container dwell times at depots reach near-record levels in 2021," said Container xChange in a report dated Jan. 11.

During 2021, the US and UK had the highest dwell times per container, averaging at 50 and 51 days, respectively.

In the US, the adjacent ports of Los Angeles and Long Beach had an average dwell time of 41 days during 2021. The Port of New York had the highest dwell time at 61 days on average, Container xChange data showed.

"Container shipping rates have bounced back after a slight downturn in the fourth quarter," CEO Johannes Schlingmeier said in a statement. "Port congestion is a major factor."

China metrics positive

And while Asian loading ports continue to grapple with burgeoning vessel queues, container dwell times in China have plummeted from a high of over 60 days seen in 2020 to just five days in 2021.

"Once containers reach Asia, they are being redeployed at record speeds," Schlingmeier said.

But as cases of the Omicron variant are reported in Asian production and shipping hubs, market sources are bracing for further disruption and slowdowns.

"Ningbo and Tianjin port can ship containers, but it requires truck drivers to be on the whitelist," said one China-based freight forwarder.