Why will the US Shipping Container Crisis not end soon?

Last updated on November 28th, 2021 at 04:22 am

The covid-19 pandemic has brought the significant economies of the world to their knees. Death roams the streets, and people are holed up in their homes, unsure and uncertain of the times. As a result, significant businesses had to resort to layoffs, salary cuts and disrupted production and supply chain.

Cargo ships are the lifeline of commerce-always have been. Unfortunately, the pandemic-induced lockdowns have brought the conveyance of cargo from one part of the world to another to a screeching halt. Shipping ports have bloated beyond capacity, and all measures to release the pressure are falling flat.

Ports at New York, New Jersey and Rotterdam face congestion by the day, as ships stand in queues for more than a week waiting to get a berth. Earlier, this operation was smooth as berths were assigned to cargo ships; cranes hauled up the containers and then distributed the cargo across the land. Now, around 700 containers have been left for a month at the Port of Savannah.

The supply-chain disruption has seen containers piled up at the ports, and with no distribution mechanism-exacerbated by the absence of workforce -the ports are running out of storage capacity at an alarming rate; thought of as a temporary glitch in the system that would self-regulate when things normalized, is now being seen as a system which has to be modernized and upgraded. But for the time being, it is the ports and the continuous incoming of ships that are facing the brunt of these unexpected times.

The impasse at western ports is also the result of ships being unwilling to carry empty containers back to the East as the way westward is more lucrative. The demand for products from China and Taiwan has increased the traffic from the East.

Efforts to ease the congestion have been in place much before the pandemic hit, as the shipping ports have seen a huge influx of investments which aim to renovate the structure, helping more cargo to be accommodated: Panama Canal in 2016 asked for a 5 billion $ investment to expand; New York and New Jersey spent $1.7 billion to raise the Bayonne Bridge to allow for the passage of bigger ships. However, should such an eventuality arise in the future, an artificial intelligence company, MeetKai, has come up with a solution that would allow shopping trends to be identified ahead of time, allowing the industry to adjust to its shipping container needs.

Currently, some respite is expected in February when factories in China shut down for the Chinese New Year celebrations and demand ebbs in the West following the Christmas and New Year celebrations.
But at the present moment, only patience should be prescribed.

Also Read: Truck Driver explains why America’s “Shipping Crisis” will not end