Cover Story
The coming weeks
Strike-shut ports recovering , trans-Atlantic capacity isn ’ t
By Greg Knowler and Michael Angell
Ports up and down the US East and Gulf coasts expect a generally smooth resumption of cargo flow after a threeday strike that began Oct . 1 . The shutdown of US ports from Maine to Texas is expected to cramp vessel capacity in the trans-Atlantic trade , however .
Port leaders say they have spare capacity and expect minimal disruptions in processing a backlog of more than 60 ships . Reduced volumes through the ports due to frontloading and diversions out of fear of the Oct . 1 strike threat — and the relatively short duration of the strike — will make the return to pre-disruption fluidity a matter of days , rather than weeks .
Bethann Rooney , port director for the Port Authority of New York and New Jersey , downplayed concerns about the impact of the strike on the East Coast ’ s busiest port , noting that the port often closes for two to three days for snow during winter .
“ After a closure , we ’ ve been able to recover in a very quick way ,” Rooney said at an Oct . 4 press conference , as the port and others opened and extended weekend hours to clear the backlog . “ I have not seen it take one week for every day of closure .”
Port of Baltimore officials also compared the operational impact of the stoppage to a winter weather-driven interruption . The Maryland Port Administration , which has extended hours to include Saturday to deal with the backlog , said delayed vessels are being “ quickly assimilated into the schedule .”
The Port of Virginia said it has opened its reservation system and expects a return to normal operations within 24 hours , “ with many components of the operation being restarted in parallel .”
‘ Heavily disrupted operations ’
The pinch is more on the water than at US East and Gulf coast docks . According to Sea-Intelligence Maritime Analysis , vessel capacity on routes from the Mediterranean and North Europe was already heading for a 10 % to 14 % reduction by the end of October , but additional post-strike delays in clearing waiting ships would dramatically increase the capacity cuts .
“ I have not seen it take one week for every day of closure .”
“ We can see that North European shippers should prepare for a capacity reduction of up to 14 % in week 44 ,” the analyst noted in its Sunday Spotlight newsletter . “ If clearing the US East Coast congestion adds another four days , this could potentially reach a temporary capacity reduction of up to 30 %.”
The three-day strike will reduce Med – US East Coast capacity by 10 % in the week starting Oct . 21 , with a full-week effect from worsening congestion resulting in a short-term 24 % reduction in capacity , Sea-Intelligence said .
The domino effect on the trans-Atlantic trade lane will be exacerbated by port congestion in North Europe . Kuehne + Nagel ’ s ( K + N ) digital ocean shipping platform , SeaExplorer , indicates “ heavily disrupted operations ” at Hamburg .
“ The yard utilization is at 112 %, with back-to-back vessel arrivals until mid-October ,” a SeaExplorer advisory noted , with rail waiting times at Container Terminal Burchardkai , Hamburg ’ s largest terminal , up to nearly 14 hours .
Operations at Southampton in the UK are also classified by the K + N platform as “ heavily disrupted ,” as high import volumes are creating bottlenecks in clearing containers , with disruption also reported at London Gateway . Several ports in the Mediterranean are experiencing “ slightly disrupted operations ,” including Barcelona and transshipment hub Algeciras .
The inland transport of containers in Europe has also been affected by severe flooding in September that impacted transportation networks and container terminal depots in central Europe . Seasonal low water levels on the Rhine River are also affecting container movement .
Barge operator Contargo reported cargo-handling delays of 73 hours at Rotterdam and 33 hours at Antwerp in the first week of October .
email : greg . knowler @ spglobal . com
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12 Journal of Commerce | October 21 , 2024 www . joc . com