One out of every 5 container ships worldwide is waiting outside a Chinese port due to heavy congestion brought in by covid lockdown in China . This could mean that another supply chain crisis is looming large on the horizon, waiting to crumble the global supply chain. The first signs became visible in March 2022, when the volume of goods being shipped by sea out of Shanghai dropped by 26%. It was seen that between March 12, when the targeted lockdown was introduced, and April 4, the volume of goods leaving the Shanghai ports by trucks fell by 19% . The scale of the problem hanging over our heads can be sensed by the AIS data of the ships around China, which depicts 300 container ships and 500 bulk ships waiting off the coast of China .
The story begins with the outbreak of the omicron variant in China, following which the Chinese Government resorted to its tried and tested method of initiating its zero covid policy. China’s zero covid policy is directly responsible for such a steep drop in cargo movement. There are enormous backlogs of cargo to be shipped and to be received. At this point, even if the lockdown were to be magically removed, it would be cold comfort to the supply chain professionals as it only opens the floodgates for the crisis to progress.
Los Angeles and Long Beach ports have long been the primary source of pollution on the US West Coast, which also happens to be the smoggiest region in the country. Since June of this year, the accumulation of diesel-powered container ships and a large number of cargo-moving trucks in the ports has exacerbated the situation. Residents living near these ports face the highest risk of cancer from the air pollution in that region, which is primarily caused by smoke-belching ships anchored at these ports. California has set a 2023 deadline for reducing smog and improving air quality, but the situation on the ground has deteriorated in recent years. Especially, with the ongoing congestion at the LA port.
While efficient ports are critical for the economic development of their surrounding areas, the associated ship traffic, cargo handling in the ports, and hinterland distribution can all hurt the environment as well as the economy.
Port congestion and Pollution:
When a vessel arrives at a port and is unable to berth, it must wait at the anchorage until a berth becomes available. This is a problem that only gets worse over time and Southern California ports have been facing congestion issues like never before. A huge crowd of container ships has been constrained to queue outside Los Angeles and Long Beach, causing the latest supply chain disruption in the United States.
The ships are stranded outside two of the busiest ports of the country, which together handle 40% of all containerized cargo entering the US.
The number of ships awaiting entry into the largest US gateway for trade with Asia reached a record high, increasing delays for businesses attempting to replenish inventories during one of the busiest times of the year for seaborne freight.
On September 12, Port of Los Angeles Director Gene Seroka warned that a “significant volume” of goods was “coming our way throughout this year and into 2022.”
Consequently, on September 18, a record 73 ships were trapped outside the port – nearly double the number as that of the previous month.
The current congestion — with both ports setting records regularly — exemplifies cargo surge since the pandemic. The backlog has increased pollution and poses a threat of supply shortages ahead of the holiday shopping season.
Port resilience is described as the capacity of ports to anticipate and respond to changing situations, as well as to survive and/or quickly recover from disruptions, with the goal of preserving the sustainability of operations and flow of cargo to, from, and through ports.
Due to the multitude of interdependencies inherent in supply chains, the breakdown of any node in the network can have an immediate impact on demographics, their safety, and well-being, as well as on the regional economy and its enterprises.
Have you recently tried to buy a computer, Peloton exercise bike or new furniture? If so, you may well have experienced an unexpectedly delayed delivery. You’d be in the same boat as millions of other consumers and corporate buyers in the western world. Though your order may have been stuck in one of the many thousands of containers on the Ever Given, the ship held up in the Suez Canal for months, the most likely reason for delayed deliveries is the global shortage of containers. The metal boxes that make global trade possible are in very short supply – with a domino effect on supply chains worldwide. And it all began with the COVID-19 pandemic.
Navigation in itself is a multi-century old phenomenon, which has been there since mankind discovered what they could do with a piece of wood. However, modern ship navigation has experienced a lot of changes, and subsequent ‘rebirths’, over the last couple of decades.
One such year of rebirth was 1952: For the very first time, vessel routing services got introduced into the industry. 1952 is when vessels were retrofitted with a prototype that would later evolve into the Automatic Identification System (AIS) in the late 90s, something that ushered a new era in maritime navigation so to speak.
AIS data, when clubbed together, gives us all-around insights into the vessel involved, its speed, position, ship dimensions, as well as its draft, helping us identify when the ship was loaded or unloaded with its designated cargo. However, the last point is an application of various data points obtained via AIS, and not available via raw data obtained from the systems onboard.
AIS, as stated above, was originally meant for ensuring navigational safety, but has quickly proved to be a vital source of business intelligence for maritime personnel.
There’s no denying that the Suez Canal is the world’s most important waterway. The reason: about 12% of the global trade flowing through a single canal, one connecting two continents – Asia and Europe. The canal is so strategic that world powers have fought over the waterway since it was completed in 1869.
As speed to market is currently critical in tackling the pandemic, COVID-19 vaccines are only shipped by air at the moment. In the future, delivery by sea may become a viable alternative. We show the potential that shipping the vaccine by sea holds.
Boris Johnson’s winning election slogan, “Get Brexit done”, is now reality. But is Brexit really done? And how will it impact ports and supply chains?
Spot the famous White Cliffs of Dover in the distance? This was a sight at least 10,000 lorry drivers waited many days to see around Christmas 2020. They were stuck in massive queues on the motorway to Dover or forced to park at Manston Airport far from the port. Some ended up spending Christmas in their lorries before they could cross the Channel. What went wrong? Britain’s Health Minister, Matt Hancock, had issued a panicky statement on the new corona virus mutation (“We’ve lost control!”) and many countries closed their borders to road, rail and air travellers from Britain. France shut the Port of Calais and the Eurotunnel. Was the resultant chaos a foretaste of Brexit’s impact on ports and European supply chains?
The huge barge chugs its way southwards towards the Gulf of Mexico. A passer-by on the banks of the Mississippi can hardly hear the boat’s engine: the other shoreline is scarcely visible, so wide is America’s second-longest river at 3,730 km. Its length is just one of the Mississippi’s many superlatives. As an inland waterway transport system (IWTS), its economic significance cannot be overstated.