Supply chain congestion and logistical challenges continue to plague many U.S. ports, while peak shipping season is coming early, according to The Wall Street Journal (subscription).
What’s happening: This year’s shipping peak is expected to arrive in late June, weeks earlier than usual, as many retailers and manufacturers have placed orders far in advance of the busy fall shopping season to protect against potential delays.
- Vessel backlogs have eased up in some places and increased in others, including several East Coast ports that are currently among the most congested in the United States.
Logistical stressors: Challenges facing the U.S. shipping industry include full warehouses, work and equipment shortages at trucking companies and railroads and logjams of hundreds of thousands of boxes at container yards and ports.
- According to April data collected by the Pacific Merchant Shipping Association, containers at America’s biggest port complex in Los Angeles and Long Beach are sitting for an average of six days before being picked up by truck and nine days before being picked up by rail.
The outlook: Three-quarters of surveyed shipping industry professionals said they think this year’s peak shipping season will be as bad or worse than last year’s.
- But there are also signs of decreasing shipping demand, with companies like Target and Walmart pulling back orders and analysts at JP Morgan saying they expect restocking to slow across several retail sectors.
Reason for optimism: “Around the country, officials at gateways say they are better prepared to deal with the coming import surge after more than a year of juggling clogged docks, vessel backups and record import volumes.”
- Ports’ operations have evolved to better deal with congestion. They have extended operating hours to handle more containers, and there is better and more frequent communication across the supply chain.