There are many byways and highways in the flow of trade. Unfortunately, “zero-COVID” restrictions and lockdowns have either backed up these access ramps or clogged up the roads. That’s the obvious impact.
But there is a multitude of undercurrents within the flow of trade that influence capacity and productivity. In a first-of-its-kind logistics and maritime data project, CNBC debuted its Supply Chain Heat Map, where all facets of the supply chain are tracked to highlight these undercurrents.
The CNBC Supply Chain Heat Map comprises real-time data from FreightWaves’ SONAR rail and truck data; global freight booking platform Freightos, creator of the Freightos Baltic Daily Index; logistics provider OL USA; supply chain platform Blume Global; third-party logistics provider Orient Star Group; marine analytics firm MarineTraffic; maritime visibility data company project44; maritime transport data company MDS Transmodal UK; ocean and airfreight benchmarking and analytics firm Xeneta; Sea-Intelligence ApS, a leading provider of research and analysis, data services and advisory services within the global supply chain; and air and freight logistics provider Seko Logistics.
Two of the undercurrents highlighted in the map are the tightness of containers out of Qingdao and Ningbo, China. Another is the continued constrained trucking capacity in Shanghai.
“If trucking is limited and cannot transport the raw materials necessary for production, that impacts the volume of product that is available for transport,” said Alan Baer, CEO of OL USA. “If I am not able to secure a container so it can be loaded with product or get that container placed on a vessel, that slows down the supply chain. The choice of the destination port is also critical.
“Every piece within the flow of trade matters. It is all connected.”
Shanghai’s government has pledged the city’s reopening will be “phased in” with hopes of returning “to normal” by mid-to-late June. But what exactly is “normal?” Nothing is normal in this pandemic.
Over the past seven weeks, we have seen various forms of “reopening” by the Chinese government, and the results have been far from normal. Factories open only to shutter days later because of the lack of trucks available to transport raw materials.
Seko’s Jasmine Wall, general manager of growth, marketing and communications for the Asia Pacific, told American Shipper, “Some members of staff have received permits to leave their homes to go shopping with a two-hour permit, but the majority remain under full lockdown.
“One of our longest serving members of staff has now been in home lockdown for 72 days (their building was locked down before the official closure of the city) with still no hopes of a shopping permit due to there still being positive cases in their building. … So, this ‘gradual reopening’ greatly depends on the number of cases in your area/building.”
The heat map tells the truth about the movement of containers. Until people return to work, the dwell times being tracked by project44 will continue to climb.
Shanghai is not alone in the increased dwell time of containers. The Port of Yantian is also experiencing some hiccups. The dwell time of both exports and imports continues to tick up after a tugboat collision with a bunker barge on May 17. This has created ongoing disruptions to operations for 13 berths in Yantian.
US Supply Chain Heat Map
In the United States, the Port of Oakland is experiencing the most delays in both vessel turnaround and container dwell times. Warehousing and trucking capacity were cited by the port as reasons behind the slowdown.
At the Port of Los Angeles, dwell times for imports continue to tick up. One of the reasons for the increase? The rails.
“Rail boxes are waiting more than six days to get on a train,” explained Gene Seroka, Port of Los Angeles executive director. “That’s triple the dwell time compared to pre-pandemic days. Rail volume is up sixfold since February.
“We need more rail assets in place at America’s busiest port complex. It’s important that all stakeholders redouble efforts to maximize rail cargo off our docks and into the domestic economy.”
BNSF and Union Pacific both serve the Port of Los Angeles. BNSF has been embroiled in a labor dispute over its attendance policy for months.
According to Greg Regan, president of the Transportation Trades Department, AFL-CIO (TTD), around 1,000 workers have resigned since February. In a recent meeting, Union Pacific updated the Surface Transportation Board that it has met almost half of its 2022 goal to hire 1,400 new train crew members.
FreightWaves SONAR shows the declining intermodal volumes in most major lanes. The steepest decline is in the outbound LA lanes.
“The LA-Chicago lane is one of the most imbalanced,” explained Mike Baudendistel, head of intermodal solutions for FreightWaves. “On average each day, about 2,500 intermodal containers of all sizes travel in the LAX-CHI lane (left chart), virtually all of which are loaded.
Meanwhile, about 1,900 return back to LA from Chicago, of which about 500 are repositioned empty.”
As a result of the sloth-like movement of trade on the West Coast coupled with the ILWU labor talks and the threat of a strike, logistics managers are looking for port alternatives. Both the East Coast and Gulf Coast ports have seen an increase in trade. Even with the increase in container volume, the Port of New York and New Jersey has chipped away at both its export and import container dwell time.
Pervinder Johar, Blume Global’s CEO, told AmericanShipper when Shanghai opens up from its COVID lockdown, the West Coast ports are going to once again experience a significant increase in volume.
“I believe that though we have seen improvement in the flow of freight from ports nationwide, that may be short-lived,” Johar said. “Congestion on the West Coast has been trending in the right direction for weeks, but if this sudden influx of activity from Shanghai to the West Coast occurs in conjunction with any sort of labor action at the ports, that progress will be disrupted.
“This ramp-up in shipping will coincide with negotiations between the ILWU and the PMA. We are already seeing some front loading, with Asian manufacturers shipping out goods early to mitigate predicted port congestion. Instead of routing through West Coast ports, more of these shipments are heading to ports on the East Coast, simply shifting capacity issues from West to East.”
The buildup in waiting TEUs off of Savannah, Georgia, is an indication of such demand.
“In Week 19, the port saw an average of two container vessels, equaling 20k waiting TEU capacity,” said Alex Charvalias, general manager of MarineTraffic. “In Week 20, there was an average of 13 container vessels, equaling 100k-plus waiting TEU capacity.
“Given this major increase of waiting TEU capacity week over week, we’re estimating that waiting times at port will increase by 100% to an average of three or more days.”
The Port of Charleston, which has seen its own share of congestion woes, has successfully chipped away at the delays over the past several weeks.
“There is a further drop in the number of container vessels from Week 19 at 1.8 days to Week 20 at one or fewer days,” said Capt. Adil Ashiq, executive for North America-West Coast at MarineTraffic. “The same positive impact is also seen with port operational times from Week 19 at 1.4 days to Week 20 at 1.2 days.”