Global Port Congestion: The Rush Hour is All Year Long
Road traffic is the modern person’s bane. Ask the Suez Canal Authority and they’ll tell you it’s not any different on the water. On 23 March 2021, the Suez Canal was blocked by the ship The Ever Given due to heavy winds and poor visibility. This cargo ship, which was 400 meters long and weighed 220,000 tons, was said to be holding $9.6 billion worth of goods. Due to this blockage, world trade witnessed a loss of $54 billion and speculations of an impending economic crisis ran rampant. After all, the Suez Canal is an extremely crucial route for global trade as it alone is responsible for over 12% of it. Even though this ship was eventually set free from its position on 29th March 2021, the Suez Canal blockage incident has added to the strain caused by the pandemic and the lockdowns on the global supply chain.
What is Port Congestion?
Ports play a very crucial role in the transportation of goods and services. Ports have become an inherent part of global trade and business as 90% of the world’s trade moves via sea freight. Today, a large number of ports are equipped to handle multiple vessels at the same time. This can sometimes cause a situation known as port congestion. Port congestion occurs when a shipment arrives at the port and is unable to load or unload because the port is already full. In such a scenario, the ship is required to wait in a queue until the port allows them to berth. This waiting time has been on the rise, especially last year through the peak of coronavirus.
The Current Situation of Global Congestion
Port congestion has become a widespread phenomenon around the world. In the past 50 years, global trade has witnessed an increase of 1452% of container ships. Due to the COVID-19 pandemic, the ports and global traders suffered a severe hit last year. The average wait time of shipping has increased by 20%, which is more than 83 hours. Studies show that the waiting time significantly increased in the second half of 2020. It has been observed that the large vessels were the most affected by this congestion.
The Causes (and Solutions) of Global Port Congestion
The problem of global port congestion is real. And it causes serious problems for the global economy.
The Size of the Vessels
Over the past 10 years, the capacity of the ships, as well as the size of these vessels, have increased. Hence, these larger ships take more time to load and unload causing traffic. Despite this, the size of the ports globally seems to be the same as they were 10 years ago. Streamlining the loading and unloading procedures can reduce wastage of time and ensure efficiency.
Lack of Operational Coordination
Port congestion is also caused because of the lack of coordination when it comes to operating the terminal. Getting these systems more organized and incorporating new-age technology into the day-to-day communications can assist to resolve these issues. Redistributing cargo is another viable option. This can be done by coordinating with the operators in the port regularly for up-to-date information. This can also provide you with feasible options for your inbound and outbound supply chains without having a major escalation in your costs. An alternative approach to this is to do transportation demand planning. Strategically analyze your company’s global carriage activity to reduce costs and inefficiency. This can be more successfully done by proper pre-planning and by forecasting your demand. Additionally, a focus on inventory management can provide greater flexibility in the long term.
Another problem that has arisen in the maritime industry is disputes and industrial actions taken by labourers that often halt or delay the process of loading and unloading at the port. Several acts have been introduced to tackle the problem of labour disputes which discourage such behavior among labourers.
All in Good Time
The covid pandemic has caused a huge delay, costing time and money while disrupting the supply chain. As world trade is set to grow in 2021, the ports must operate fully and efficiently to avoid any unnecessary delay or additional charges. Unfortunately, there’s no quick fix to solve the challenges of global port congestion, but that doesn’t stop us from trying! Contact us today for more information on our hassle-free logistics solutions that take the strain of importing/exporting away from you and your business!