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U.S. East Coast port congestion grows as more shippers divert from West Coast

Port congestion at the Los Angeles/Long Beach port complex still overshadowed the East Coast

Congestion at East Coast North America container ports worsened as more ships diverted to avoid West Coast gridlock, further delaying the flow of goods to consumers and driving up costs, according to S&P Global Platt.

There where were 31 ships anchored off the Port of Charleston, South Carolina, Feb. 22 while another 13 were waiting off the coast of Norfolk, Virginia, according to Platts cFlow trade-flow analytics software.

At the Port of Houston, 11 ships were anchored in queue to berth and near the Port of New York and New Jersey, nine ships were queued.

“We’ve had our boxes sitting and waiting to enter New York/New Jersey for more than two weeks,” an importer based on the East Coast said. “It’s impacted us for sure but with nearly all ports facing the same situation, there’s nothing we can do to avoid it for now.”

Port congestion at the Los Angeles/Long Beach port complex still overshadowed the East Coast, with 66 ships in queue to berth Feb. 22, down from a record of 109 ships on Jan. 9, according to the Marine Exchange of Southern California.

Other West Coast ports have reduced congestion during the Lunar New Year slowdown in China earlier in February. There were nine ships in queue at the Port of Vancouver and six ships waiting to berth at the Port of Oakland, while Seattle-Tacoma had eliminated its queue by Feb. 22, according to cFlow.

Meanwhile, the number of container ships waiting for berths in Los Angeles/Long Beach has continued to decline, falling to 66 on Wednesday — as low as it was back in mid-September.

The longer voyage from Asia to the US East Coast through the Panama Canal loses its appeal if wait times for transit are long at arrival, however, shipping lines are looking to increase rates on the route in March with increased demand.

The Port of Savannah was one bright spot, having eliminated its queue of ships at anchor by deploying five pop-up container yards across the Southeast US to move cargoes out of port terminals. A buildup of cargoes and equipment in the ports tends to slow productivity.

Market participants will closely watch developments with the International Longshore and Warehouse Union representing West Coast port workers, whose multi-year contract with shipping lines and marine terminals expires July 1. West Coast port operations were disrupted for months when contract talks hit an impasse in 2014-2015, causing many shippers to divert to the East Coast wherever possible.

“A West Coast labor strike could be the biggest issue for shipping this year,” a US-based freight forwarder said. “That could see widespread force majeure declarations on contracts between [cargo owners] and shipping lines, and a huge swing in higher spot rates to the East Coast.”


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