A global headache: Covid-caused container port congestion

Avatar photo
by Emily Atkins
Shippers everywhere are wondering when they’ll see their containerized cargo arrive. Container terminal and port congestion, largely at West Coast ports, has reached record levels this winter.

In Vancouver, which has been hit only mildly, the average container dwell time was 4.7 days in the month of February, and CN alone had more than 130,000 on-dock footage, with dwell times of five to seven days.

The situation is symptomatic of a global transportation sickness created by the Covid-19 pandemic. According to Eleanor Hadland, Drewry’s senior analyst for ports and terminals, the congestion crisis was brought about by a combination of factors.

When demand began to rebound last year, liner companies reacted by adding capacity on the strongest routes, particularly the transpacific. This meant that already labour-crunched terminals were flooded with more boxes than they could handle.

As delays in container handling worsened, the liner companies adopted a “cut-and-run” strategy, Hadland said, which caused a build-up of empty containers, and only amplified congestion at terminals.

Canadian ports have been impacted, Hadland said, mostly by the lack of schedule regularity as the liners skip past their regular calls at Vancouver and Prince Rupert.

Hadland called on the industry to work together on clear the backlogs. “Unilateral decisions that are perfectly rational for an individual party, are bad for the system for a whole,” she said.

She recommends working on increased visibility into port performance which will deliver early warnings and allow for earlier cargo rerouting and schedule adjustments. “When early warnings are seen, shippers should be encouraged or incentivized to reroute. It must be proactive to prevent congestion,” Hadland asserts. She acknowledges, however, “this will be a hard sell as an option to shippers” who will have to absorb the costs of higher landside transportation as a result of rerouted cargo.

Easing of congestion will also depend on market factors, which will be affected by Covid-19 vaccine rollouts. Once people can travel freely again, demand for consumer goods should decline. However, Hadland cautions that if the backlogs are not eased by Q2 this year they will roll into the peak season, and “there will be no respite”.