Port Industrial Actions Crippling Industry
Ongoing negotiations between Patrick and unions could have crippling effects on the international trade sector. Port operator Patrick recently announced a significant proportion of rail windows at Port Botany will be cancelled from 24 June to 15 July. During the last quarter of 2020, escalated industrial action faced by all three stevedores responsible for loading and unloading container vessels resulted in vessels by-passing the port with exporters and importers forced to pay an estimated $330 million in congestion surcharges to recover vessel operational costs. Patrick and DP World both agreed to continue out of court negotiations with the Maritime Union of Australia (MUA) after separate deliberations before the full Fair Work Commission. DP World subsequently implemented an Enterprise Agreement with their employees. Patrick and the MUA are yet to agree on terms, however, despite its operations handling more than 40 per cent of overall containerised trade volume via Port Botany. The FTA and the Australian Peak Shippers Association (APSA) is continuing to push for the Federal Government to initiate a broader review on waterfront industrial relations. Currently the average terminal delays at Port Botany sit at around 5 days.
USA Terminal Update
The Port of Los Angeles recently announced that it had earned the distinction as the first port in the Western Hemisphere to handle more than 1 million twenty-foot equivalent units (TEUs) in a single month. The month of May was the busiest month in the 114-year history of the United States’ busiest port. The Port of LA moved a total of 1,012,248 TEUs, up 74% from May 2020, when COVID-19 had stalled global trade. The Port of Long Beach and South Carolina Ports Authority last week also reported record Mays. And the Georgia Ports Authority announced it had had 10 consecutive months of growth and turned in its second-busiest month ever. One figure that sticks out in the Port of LA’s May numbers: “Empty containers climbed to 366,448 TEUs, a jump of 114% compared to last year due to the heavy demand in Asia. It was the most empties ever processed in a month at the port,” the announcement said. The record numbers are also resulting in a shortage of trucks and further delays at the terminals, as shown below;
U.S. East Coast
- New York – Vessel waiting time is 0-24 hrs due to certain level of import volume and vessel bunching.
- Norfolk – Vessel waiting time 0-24 hrs due to off proforma vessels.
- Charleston – Vessel waiting time is 0-12 hrs due to off proforma vessels.
- Savannah – Vessel waiting time is 48-84 hrs due to off proforma vessels and vessel bunching at the same time.
- Miami – POMTOC will be CLOSED on Monday July 5th in observance of Independence Day.
U.S. Gulf Coast
- Houston – Vessel waiting time is 0-24 hrs due to vessel bunching.
U.S. West Coast
- Long Beach – Vessel waiting time is 2-5 days due to high import dwell and labour shortage.
- Los Angeles – Vessel waiting time is 1-4 days due to yard congestion, high import dwell and labour shortage. Yard utilization is 98%.
- Oakland – Vessel waiting time is 15-20 days due to high import volume and labour shortage.
- Seattle – Vessel waiting time is 5-7 days due to high import volume and labour shortage. Yard is at 120% of capacity.
Yantian Port Resumes Operations, Faces Container Backlog
Following a COVID-19 outbreak and consequent month-long disruption, the Port of Yantian in Shenzhen, China, has begun to return to normal operations. However, shippers have been warned it will take time to clear the significant container backlog. Lars Jensen, CEO of container consultancy Vespucci Maritime has gauged it will take Yantian 82 days to clear the more than 700,000 TEU queuing outside its quays in addition to the normal flow of export cargo out of Asia. It is also expected to take weeks for land-based operations to normalize around Yantian said, Peter Sand, chief shipping economist at BIMCO. “Getting the cranes to operate may be the easy part but, moving the boxes around inside the clogged-up port perimeter and getting ships to berth as a part of a normal routing takes days and weeks,”. Demand for space is unflagging. However, with no extra capacity to address the issue, it continues to put pressure on rates. The FBX Global rate is more than triple its level this time last year and carriers are planning additional increases for peak season. Even many recently signed and highly elevated annual contracts are not guaranteeing enterprise shippers that all their containers will move without paying premiums first.