By Arthur Chen   Photo：jan_paulussen ，Link：Pixabay

Global ports are facing the biggest crisis in history! At present, more than 350 ships are stuck in the port causing "sea traffic congestion", the shipping supply chain is in chaos, and the port infrastructure is out of date, some shipping companies have decided to actively invest in the port.

The pandemic that began last year has caused the global shipping system to face the biggest supply crisis in 65 years. On the contrary, the demand side has skyrocketed, and the old port infrastructure in the United States has no choice but to tighten the shipping supply chain. The global shortage of containers and port congestion are still worsening. Real-time information from global logistics shows that there are currently 353 cargo ships stuck in ports around the world, and the number is more than twice the number at the beginning of this year. There are still 22 ships waiting outside the ports of Los Angeles and Long Beach, the major US ports alone, and it is estimated that it will take 12 or more days for unloading operations.

Although there were also cases of port congestion in peak seasons in previous years, the main cause of global shipping congestion in the past year is the Covid-19. In response to the pandemic, various countries have implemented border controls of varying degrees, causing many factories to be forced to shut down, jeopardizing the entire shipping supply chain, and ultimately causing the shipping costs of China, the United States and Europe to soar. In fact, every part of the shipping supply chain is at a critical point. For shipping companies, freight forwarders and customers, even small changes in demand will have a huge impact on downstream. Ports need to upgrade automated operations and decarbonized logistics, and the new generation of ship is getting bigger and bigger. At present, the largest cargo ship can carry 20,000 20’ containers at a time. The length of all the containers after unloading is equal to the distance from Paris, France to Amsterdam on the highway. However, such large ships require deeper ports and larger cranes and new equipment.

Since last year, the pandemic has exposed that many ports are facing the problem of infrastructure upgrades. The entire port infrastructure system has been overwhelmed last year, and there is an urgent need to invest in upgrading equipment. In fact, port problems existed before the pandemic, but the old facilities and capacity limitations were highlighted during the pandemic. At present, some shipping companies have decided to take the initiative to take action and invest in ports first, so that their freighters can obtain priority processing rights. The purpose is to shorten the time for ships to berth in the outer port area and wait to enter the port. In this way, the containers can be loaded and unloaded first, and the empty containers can be returned to the Asian production base as soon as possible. At the same time, most shipping companies only reserve limited positions for container bookings to inland points in the United States, Canada, Europe, etc. to reduce the backlog of empty containers. However, old port equipment is still destructive to the turnover rate of containers.

Recently, HHLA, the operator of the Hamburg terminal in Germany, stated that it is negotiating with COSCO SHIPPING Port on a minority stake, which will make the shipping group a partner in planning and investing in the construction of terminal infrastructure. The U.S. infrastructure proposed by the U.S. Biden administration is also forced to update the old sea and airports and railway freight forwarding centers and add automated processes to increase the competitiveness of the U.S. transportation, so that container rotation can be speeded up. The current global container turnover rate is 146 days, which means that each container can only be used 2.5 times in a year. Even if the shipping company builds a large number of new ships with a carrying capacity of 20,000 to 24,000 TEUs, the lack of empty containers will still be the problems in supply chain. However, these measures cannot improve the current difficulty.