The Ever Given jam is already seen as a simple anecdote in front of the great logistics crisis that we have globally. With ports collapsed, shipping costs are at all-time highs and the price to ship a container has multiplied. One solution that was applied was to increase the number of containers for each ship, but far from alleviating the situation, this is only making the problem worse.
According to data from IHS Markit, the ships are fuller than ever. In ports such as Long Beach in Los Angeles, a ship traditionally before the pandemic used to carry about 4,000 containers, now that number has increased to 7,000 containers, 70% more than average.
Ports are not ready to download so fast
In ports such as Rotterdam or Hamburg, the average increase in containers is not so pronounced, being 12% and 14% respectively, but it shows a global trend where ships are transporting a large amount of material. This causes that there are also more containers to unload from each ship, which increases the stress of the infrastructures of each port.
The port infrastructure is a great machinery where maximum effectiveness is sought and there is little margin for error; This avalanche of containers as a result of the increase in online sales is causing the tension in the ports to increase.
Each mooring in a port has a fixed number of cranes, independent of the number of containers that the ship has. There are some berths with more capacity than others, but the level of flexibility of the ports is lower than that of the ships and the sudden change in the level of transported containers has not been able to translate into a change in the infrastructure. Ports cannot increase their capacity to meet the demand that carriers have wanted to pick up.
We are not only talking about the number of cranes, also the space in each shipyard to stack and classify containers. The more containers, the more difficult it is to organize them and be able to get them to move to other places. In an ideal world, this increase in labor could have been managed efficiently, but in practice it has caused significant bottlenecks.
A tail-biting fish that is skyrocketing prices
Global shipments went from being stopped by the pandemic to resurfacing after the increase in online sales. And since then, container shipping prices have continued to multiply. It is a fish that bites its tail: congestion in ports contributes to higher prices and shipping companies charge additional fees to make up for longer waiting timesexplains John Butler, president of the World Shipping Council to the Financial Times.
Average time to unload a container depends on the region. According to IHS Markit data, in Asia it is less than half that in the US This may be due to several factors, from the fact that Asia is exported more than it imports, until most ports are more modern. While in the US the average time is about 76 seconds, in Asia it is 27 seconds for each container. In northern Europe this time is on average 46 seconds.
“The supply chain is definitely down and has been for some time. We are in crisis mode“Mario Cordero, director of the port of Long Beach, one of the most important in the United States, has recently assured us that is facing record queues, with up to 73 ships loaded with containers waiting to enter.
Images | Ian Taylor | Cameron venti