Port congestion in North America worsened in late July compared with a month ago, with traffic having shifted from the West Coast to the East Coast.
The Savannah, Georgia, port accounted for 43 of the 153 ships, followed by 26 in Los Angeles/Long Beach, 24 ships in Houston, 18 vessels in New York/New Jersey, 17 in Vancouver, British Columbia, 15 in Oakland, and 10 ships at other ports.
The port congestion has halted falling spot shipping rates. Shipping rates for the China to East Coast route, for example, were hovering around the $10,000 level in late July, while the Europe to North America East Coast rate had jumped by 2 percent, to exceed $8,400.
Though the rates are far from the $25,000 level seen during the height of the container congestion months ago, they indicate an inflationary pressure on supply chains, which can potentially push up prices of commodities and consumer products even higher.
Eastward Shift
Port congestion had earlier peaked in North America during the months of January and February, when there were nearly 150 ships waiting at various ports, with two-thirds in the queue at the Los Angeles/Long Beach ports on the West Coast.According to July 28 data, the majority of the 153 ships were waiting at ports in the East and Gulf coasts. While there were 59 ships on the West Coast, accounting for 38 percent of the total vessels, the East and Gulf Coast ports accounted for the remaining 94 ships, or 68 percent.
The recent McCown Report by Blue Alpha Capital points out that U.S. port congestion has transformed from a phenomenon mostly affecting the West Coast to something affecting all coasts. The eastward shift began in June.
Moreover, West Coast labor contracts with the International Longshore and Warehouse Union, which covered 22,000 dockworkers, expired at the beginning of July. This also contributed to the eastward shift due to worries about labor disruption in the West Coast ports.