By Arthur Chen  Photo：tawatchai07 ，Link：freepik

Affected by the spread of Delta variant of Covid-19, port congestion on the west coast of the United States has once again become seriously. According to the latest information from the Port of Los Angeles, there are currently 20 ships waiting at the anchorage in Southern California, and 14 ships waiting outside the port. The number of waiting ships increased from 30 in the previous increase to 34. The time has increased from 5.8 days to 6.2 days compare to the previous period. At the same time, on the east coast of the United States, truck transportation was also delayed for about two weeks, resulting in extended container detention. The average detention time of US containers has increased by 35%, which is equivalent to a 35% reduction in available capacity. The prolonged detention of containers has further caused the growing shortage of it in the Midwest and Northeast of the United States. In addition, railway congestion has also caused delays in the delivery of imported goods from the United States, making it difficult for empty containers to quickly return to Asia.

Shipping delays absorbed 25% of all trans-Pacific capacity, while demand soared by 25%. The transit time from Shanghai to Chicago via the Port of LA/LB, including cargo transit and vessel voyage extend more than doubled from 35 days to 73 days. This means that it takes 146 days for a container to circle back to the port of departure and reload, reducing the capacity of the container by 50%. At the same time, Maersk also issued a warning that as the supply chain will face greater pressure this month, the company urges customers to return containers as soon as possible.

The US National Retail Federation expects US imports in August to surge in the early part of the traditional peak season, which shows to many industry observers that importers are placing orders early to avoid delays in holiday merchandise. "Since May, we have been shipping Christmas products. As long as there is a space, some people try to ship the products to the United States, and importers will not wait until September. In the Chinese market, there are news that there are forwarding companies. It has been announced that cargoes with a value of less than USD 70,000 will stop accepting booking services! In the face of high freight rates, freight forwarding’s capital is under pressure. Finding a balance between risks and benefits is the current strange situation.

In addition, affected by the Covid-19, two major ports in the Ho Chi Minh area of ​​Vietnam suspended receiving some containers, resulting in warehouse congestion continuing to spread to northern Vietnam. The pandemic is getting worse. According to a report from the Ministry of Health of Vietnam on the 14th, there were 9716 new confirmed cases in Vietnam on that day, and a total of 265,464 confirmed cases; 349 new deaths from Covid-19 and a total of 5437 deaths. Ho Chi Minh City Deputy Secretary Pan Van Mai said that the quarantine period will soon finish on August 15^th, however, it will possible continue to extend to September 15th. At the same time, it may extend the quarantine for a longer time.

At present, more than half of the provinces in Vietnam have begun to be strictly restrictions. Many factories in Vietnam have been affected, and some factories have been shut down. The warehouse was also closed due to the blockade, and imported goods were unhandled, causing serious congestion in southern Vietnam’s ports. The largest port in Ho Chi Minh City, Cat Lai, has a backlog of more than 100,000 TEUs, and the yard density has reached 85%. Shipping companies have issued notices that due to the pandemic in Ho Chi Minh City, the Cat Lai Port and Cai Mep Port terminals in Ho Chi Minh City have suspended receiving imported containers from customers whose production activities have been suspended or stopped starting on the Aug 5th. Cai Mep Port has also suspended the imported containers, reefer containers and goods that take a lot of space in the cargo yard. In addition, the chaotic port situation is spreading to north. Prior to this, the Vietnamese government decided to block the port of Qui Nhon in the central part of the country. The foreign anchorage in Haiphong in the north of the country is also very busy. Traffic jams on the Sino-Vietnamese border are also quite serious. Like most other major Asian ports, shippers who ship goods from the ports of Cat Lai and Cai Mep in Ho Chi Minh will face a delay of two to five days.

The pandemic situation in Southeast Asia is severe. The current freight rate from this region to North America has soared by 15%-25%. The freight rate to the East of the United States is as high as US$20,000-25,000, and the freight rate to the West of the US has also reached US$16,000 to 20,000. And it's hard to find a space. Everyone must be prepared that the chaos caused by such an pandemic and high transportation costs such as sky-high rates will become the normal, at least until mid-2022.