Supply Chain Snags Shift from West Coast to East

While fewer container ships may be sitting at anchor in the Pacific, supply chain congestion has shifted east.

Off the coast of Los Angeles, at the Port of Long Beach, just 21 container ships were backlogged in June, compared to a record 109, according to Marine exchange. Waiting hours fell from nearly 350 in January to about five in August. On the Atlantic and Gulf coasts, though, where access to more ports typically wards off congestion, snags have emerged.

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At the Port of Savannah, the country’s fourth largest water entrance for container imports, 5.8 million container units were moved in the fiscal year ending June 30, 8% more than the year prior, port officials told Yahoo Finance. The port hadn’t ever handled more than 5 million units. The increased traffic has extended wait times to historic lengths—200 hours on average, according to VesselsValue data.

Though cargo levels have come down since 2021, when consumer COVID-19 spending surged, they are still higher than they were before the pandemic.

"(P)orts…were already strained and already operating at pretty much near-maximum capacity, even before the pandemic," Nathan Strang, Director of Ocean Trade Lane Management at Flexport, told Yahoo Finance. Adding cargo where the situation is already crowded can exacerbate supply chain issues.

Strang also said that certain importers are failing to pick up their containers, contributing to snarls. “They're leaving them there and they're using the ports and the rail terminals as storage that is then causing... [an] artificial congestion... it is causing them to back up into the docks. And then that is causing the delays out onto the water."

But, certain factors may make improvements easier to attain. Labor shortages, for instance, are no longer a concern. And, the ports in Los Angeles and Long Beach are negotiating new contracts between 22,000 dockworkers and shipping operators, with signs of progress.

"The message is that there is a problem," Vivek Srivastava, Senior Trade Analyst at VesselsValue, told Yahoo Finance. "But with a bit of extra research, shippers and supply chain managers can find ports that are not congested on either coast, the West Coast or the East Coast. There are still ways to move your cargo into the U.S. without having to wait in long lines."