May 19, 2021
Written by: Brenda Barnes, Export Manager, Geo. S. Bush & Co., Inc.
Congestion at the seaports is in the news and has been for several months now. Most of what is seen on television are the ports of Los Angeles and Long Beach, California. Maybe that is the case because they seem to be in the worst way, with more than 30 ships at anchor waiting for a berth on any given day. Some of these ships at anchor are breakbulk ships, but for the most part, they are container ships. Other congested ports affecting shipping are Oakland, CA; Vancouver, BC; Houston, TX; New York; New Jersey; Savannah, GA; and Norfolk, VA. If you are interested in seeing how many ships are at the terminals and anchored, a good website to use is https://h5.shipfinder.com.
What happened? COVID hit the longshore labor. Just in Southern California alone, over 600 members of the ILWU tested positive. This meant there weren’t enough workers to work the ships as they would normally. It took longer to unload and load the ships with reduced labor, but the ships didn’t stop coming. They came and anchored, waiting their turn.
Now you know the terminals are full of ships, but the terminals are also congested with containers. Some containers have been buried on their docks and have taken months to get to the top so they can be released to the importer. When the ports are this backed up with imported containers, how many export containers might there be allowed to enter these same terminals? Well, initially, not many. Exporters, mainly the agriculture shippers, were hit hard because ocean carriers decided it would be best not to take the full containers to their destination. Instead, they take the empty containers back to China, where they could be used for more imports quicker than if the containers came in loaded. Once there was evidence of this happening, the agriculture community had the ear of the FMC (Federal Maritime Commission) who, then got started reminding the ocean carriers of the Shipping Act of 1984.
However, we are still in this congested situation. Containers are hard to come by, delays still abound, bookings are being canceled due to lack of space and equipment, and the imports are still coming in. The ships are being worked with the entire labor force now, but it takes about three months to clean up the backlog once the increased shipments go back to normal levels. Imports are still higher than usual, and that is not letting the congestion get sorted out. Is this due to the latest stimulus checks? Some believe it is the case. Many are saying the shipping situation will get back to normal by summer, but we are not far from summer at this point. Will it really happen? All the while the ocean carriers are increasing their prices because they can: supply and demand.
This situation has caused havoc for Letters of Credit and outbound cargoes being shipped under them. L/C’s have had to be extended and/or shipment periods extended. Some exporters are forced to airfreight cargo so that the supply does not run out at the destination. This has created a tighter air freight market and increased air costs.
I’m looking forward to Summer – how about you?
Brenda Barnes is the Export Manager for Geo. S. Bush & Co., Inc. Since 1988, Ms. Barnes has worked in the international-trade industry, choosing to focus on exports for well over 30 years. She currently serves on the Board of the Columbia River Custom Brokers and Freight Forwarders Association (CRCBFA). In addition, she is currently the Vice President and Export Chairperson for the CRCBFA. In addition, she is the Transportation Chairperson for the U.S.A. Dry Pea and Lentil Trade Association, the Export Chairperson for the Pacific Coast Council and serves on the Board for the Merchants Exchange Scholarship Committee. Ms. Barnes served as a member of the 14th Term with the Commercial Customs Operations Advisory Committee (COAC) and was reappointed to the 15th Term. This term she serves as a subcommittee chairman for the Rapid Response Subcommittee. She also has been on and still serves on a number of the working groups within COAC: Export, E-Commerce, Trusted-Trader Partnership, and Blockchain.
As a third-generation and native Oregonian, Brenda graduated from Oregon State University with a BA in Business Administration and a minor in German.
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