If you’ve been keeping up with the market updates, you’re well aware that cargo has continued to move at record paces since the back-half of 2020 through today. You’ve probably also caught a glimpse at what appears to be a theatrical planned act of comedic events related to international shipping over the last year. Between the gantry crane collapse in Taiwan, record congestion at U.S. ocean ports, airport congestion, and now the COVID outbreak at Yantian port, it’s a lot.
What’s even more intense is that all these events are happening in as peak season approaches. And you know what peak season means – that’s right: congestion, congestion, congestion… And what better port for congestion than LA/Long Beach?
Delayed Yantian Cargo Expected to Congest LA Port During Peak Season
Yantian is one of the leading exporters of electronics in the whole world. In fact, an estimated 90% of electronics are shipped through the ocean port of Yantian, and when the massive COVID outbreak hit recently, it slowed everything down. Tons of ships awaited docking, and ships that were docked weren’t able to be unloaded in a timely manner. Industry experts have expressed concern that the effects of the Yantian outbreak and delays would carry through December holidays, and it’s appearing that may not be far off.
Los Angeles port did report experiencing a 13% decrease in total import and export volume from the record high of 1 million TEU’s achieved in May 2021. The decrease is largely attributed to the Yantian port COVID shutdown, which drastically reduced exports bound for California.
Long Beach port experienced similar yet even more drastic decreases of 20% in total import and export volumes during the month of June when compared to May.
It’s estimated that roughly a third of all vessels transporting to the ports of LA and Long Beach originate from the Guangdong Providence (where Yantian port is located.)
Decrease in June Port Activity: Why It’s Bad News
So, why is this shipment activity decrease bad news? Because the decrease in activity wasn’t due to lower consumer demand – it was simply due to lockdowns at Yantian. Shipment prep remained the same (and perhaps even higher than May) going into Yantian, but the lockdown forced everything to a screeching halt. As the port re-opens, all of the backed up cargo at the port is going to make its way into California and other parts of the world in what may appear to be a chaotic shipping frenzy.
What’s even more stressful than record numbers of containers flooding the ports of LA and Long Beach is the fact that regular peak season is almost underway.
Peak season, which runs roughly from August-October in preparation for December holidays, is always chaotic at ports. And with the record high shipping activity alone from the back-half of 2020 through today, it’s expected that peak season 2021 combined with Yantian cargo is going to cause absolute insanity at U.S. ports.
What to Do
The biggest advice for shippers right now is to focus on efficiency in your supply chain and logistics process. There really isn’t any wiggle room for unnecessary steps, delays, and nonessentials when operating in an already congested market at peak season.
If your logistics process is messy or inefficient whatsoever, now is the time to talk with your freight forwarder about devising a strategic plan to increase efficiency and mitigate risks. If you’re freight forwarder isn’t acting as a true source of value by offering customized strategic solutions as market conditions change, it may be time to start a conversation with someone else.
If you have any questions whatsoever about shipping, the current market conditions, future shipping forecasts, or how you can improve your logistics process, please don’t hesitate to reach out to one of our team members! We would love the chance to answer your questions and help your team in any way possible.
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