By Arthur Chen      Photo：Artem Beliaikin

The problem of congestion at U.S. ports is going toward slightly better after reducing the demand for consumption of goods.

According to Kuehne+Nagel, the culprit of world supply chain problems is US ports! The ports of Los Angeles and Long Beach caused most of the congestion in delay of products moved . Addressing congestion at the Port of Los Angeles has been a priority for the Biden administration for months. Although the port congestion problem has slightly improved over Christmas sale, the congestion problem of the Los Angeles Port, the largest port in the United States, has not been effectively solved. According to LA/LB port officials, the containers take 90% of the available space right now in which 70% is considered optimal flow conditions. This means that most of the trucks and working labors are difficult to move efficiently in the port area. Checking the record, the ports of Los Angeles and Long Beach are the origins of global container traffic congestion. And U.S. ports are responsible for about 80 percent of the world's supply chain disruptions. That is to say, the global transportation chain disconnection comes from LA/LB port congestion, and the severe obstacle in American ports has caused shortages of ships and containers, spreading from the United States to all parts of the world.

Months on, is U.S. port congestion now past its peak? The number of container ships waiting for berths at the ports of Los Angeles and Long Beach fell to 78 on Feb. 8, the lowest level in three months. That's down 23% from 101 ships on Feb. 1 and 28% from 109 ships on Jan. 9. The January average was 101 ships. Possibly due to being in a seasonal cycle or other factors, the recent trend in the number of ships waiting around Southern California is very similar to previous year ago. Both grows wildly in the fall, peak around the end of the year, and then start to decline in the first few months of the year. In 2021, the number of ships waiting at ports began to decline in February and began to climb up in the third week of June. So the answer is that the current congestion situation in the port is in a steady state. Neither worse nor better. This is obviously not a happy result.

However, some analysts put forward the view that the problem of congestion in US ports is developing in a good direction. When the number of imported goods in the United States increased wildly, it happened that the government provided subsidies, so the actual disposable income of American residents increased and the demand was strong. Now that the government has stopped giving subsidies, coupled with inflation, the real disposable income of residents has begun to decline, and demand has decreased. Port congestion can be alleviated only when the consumption demand of residents decreases or the consumption capacity of residents remains unchanged, but the expenditure on goods decreases and the consumption expenditure on services increases. In this period, both methods of reducing port congestion are working, so it is believed that the port congestion problem is easing. According to recent data from Flexport, it took an average of 110 days for a shipment to travel from a factory in Asia to the export gate of a North American port, the same as at the end of December, and although down from the record 114 days in the second week of January, it is still a year-over-year comparison. an increase of 42%. As a result, the current congestion of US ports has not been resolved, but only slightly improved.

Even US ports congestion is on downward direction, It will take some time for the ports to clear up after a drop in U.S. consumer demand. So it's still far from normal. Another question is, can all this port congestion be resolved when we enter the next peak season? Can the supply side guarantee that the disruptive things like new labor union negotiations at West Coast ports won't happen? If you want to solve the port congestion, you need to reduce the demand first, and ensure that there are no problems on the supply side, and to survive the lag period, and then clean up all the problems before entering the peak season. You can't go wrong on every road. So, it is still a long way to go.  2022 may be only slightly better than last year according to most comments.

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