Major container terminal operators around the world continue to struggle with congestion even with the end of the peak season because of the pile-up of boxes in storage yards.
Pressure on quayside at Hong Kong International Terminals
Pressure on quayside at Hong Kong International Terminals
Major container terminal operators in the US, Europe and Asia have been battling congestion in the past three months for several reasons as volumes soared with the arrival of the peak season. The peak season was over at the end of October but the ports are still not out of the woods and continue to grapple with congestion. It will take a month or two to clear the backlog. The port of Rotterdam, where shipping companies have a wide range of terminal operators to choose from, has been struggling with congestion since July because of a significant rise in traffic and poor carrier schedule. The situation eased with the end of the peak season and congestion surcharges were lifted. The Europe Container Terminal’s Delta Terminal on the Maasvlakte has seen improvement but waiting times for vessels are still not what they should be. In Hamburg, the increased volume peaks caused by larger vessels, coupled with schedule reliability issues, caused a doubling of average dwell times for export containers. There were also delays in rail and truck handling. In the US, a convergence of factors contributed to the worst congestion problem in years for the twin ports of Los Angeles and Long Beach. The main culprit for the chaos was shipping lines, which for some time has stopped providing chassis to their customers.
Port of Long Beach traffic congestion
Port of Long Beach traffic congestion
In Asia, International Container Terminal Inc (ICTSI), which operates Philippines main container terminal, Manila International Container Terminal (MICT), is still struggling with vessel delays even after lifting the trucking ban, which brought the port to a standstill in July.
Containers pile up at the Manila International Container Terminal in the Philippines.
Containers pile up at the Manila International Container Terminal in the Philippines.
At Vietnam’s Cat Lai Port the pile-up of containers has resulted in the diversion of ships to alternative destinations in the vicinity of the port. In Hong Kong, Kwai Tsing Port has been struggling with the rise in volumes, arrival of mega vessels and deployment of ships by liner alliances. The increase in barge traffic in recent years has put a strain on the facilities at Kwai Tsing Port and the situation now has got more complicated with the increase in transshipment volumes, rise in deployment of mega vessels and shipping alliance carriers, which are all exerting even greater pressure on terminal operators’ quayside capacity and yard density, said Anthony Tam, head of group corporate affairs at Hutchison Port Holdings, the operator of Hongkong International Terminals, one of five operators of the nine terminals in Hong Kong. The others are Modern Terminals Ltd, Goodman DP World, Cosco-HIT Terminals Hongkong Ltd and Asia Container Terminals Ltd. The industry sees the need for additional dedicated barge berths and back-up land to alleviate some of the pressure on the operators and has been calling on the government for years to take appropriate action, Tam added. In a joint announcement recently, the Hong Kong Container Terminal Operators Association (HKCTOA) and the Hong Kong Liner Shipping Association (HKLSA) urged the Hong Kong Government to expedite the implementation of land use rationalization at Kwai Tsing Container Port. Tony Tong, vice-chairman of the HKLSA, said: “We need sufficient land and berthing facilities to allow for effective barge-vessel arrangements and smooth inter-terminal trucking flow to meet the vast number of cargo consolidation activities between shipping alliance carriers at the port. The absence of such a port zone land policy is one of the major reasons why port congestion continues to be a big challenge today.” Jessie Chung, chairperson of the HKCTOA, said, “In terms of port throughput, although there is still a 5.7% year-to-date growth up to September this year, the rate of growth is slowing down. In fact, both August and September reported a year-on-year decrease. In the meantime, the terminal operators are working very hard to coordinate with the shipping lines and other terminal users to reduce any impact caused by the shortage of land and barge berth and we hope that things will return to normal shortly.’’ Joel Cheung, corporate affairs manager at Modern Terminals Ltd, said: “The lack of dedicated barge berths to cater for the increase in barge volume has resulted in long waiting times. As these growth segments require more quayside capacity and longer storage durations within the yard, there has been increasing pressure on the port’s infrastructure and equipment. This pressure has been compounded by a dramatic increase in vessel sizes and the increasing complexity of shipping line alliances. “While the end of the peak season may help, but this is a structural rather than seasonal issue, as we still saw congestion after the peak season last year.’’ Stephen Ng, director of trades at Orient Overseas Container Line (OOCL), the top container line in Hong Kong, said: “While bigger ships are taking up more quay length and needing longer berthing time to handle the increasing number of containers, carrier alliances with slot exchange arrangements are also demanding more time for inter-terminal container transfers where the availability of container trucks and truck drivers to handle them are also being tested. “Currently, there are limited berths at the port to effectively handle today’s ultra-large containerships and together with the growing volume of barge activities and transshipments in the region, the pressure from terminal congestion is mounting because of insufficient facilities and resources, thereby affecting port productivity. “Poor schedule reliability by lines is also adding to the problem. As a result we are experiencing delays from one to two days.” At Cat Lai Port, which normally handles more than 80% of goods going in and out of Ho Chi Minh City and neighboring provinces, the port has stopped inbound containers using the port for transit until the congestion subsides. New regulations on trucking capacity at Vietnamese ports are also exacerbating congestion at Cat Lai. In an attempt to stop damage to Vietnam’s bridges, the government has imposed stricter inspections on trucks leaving Vietnamese ports. Trucks are now weighed at checkpoints to make sure cargo doesn’t exceed what a vehicle is registered for. In Manila, 13 vessels, which arrived in late October, were still waiting to unload their containers at the MICT. “Due to the pile-up of containers inside our port, there are about 13 vessels waiting to berth and unload their boxes; two weeks ago it was 29 vessels,” said Christian Lozano, commercial director of MICT. “The problem is discharging cargoes from the ship. Delay is with the vessel now. Because we are full, we’re operating slowly. The slower you operate, the more the containers in the port will build up.” In Europe, liner schedule unreliability is the main problem at the ports of Rotterdam and Hamburg. The problem is when ships arrive “out of window” terminal operators may not have a berth space available or the necessary number of cranes to handle their cargo efficiently. Terminal capacity is also being affected by work on infrastructure upgrades, such as installing new cranes at the Delta terminal at the Port of Rotterdam. In Southern California, truckers and terminal operators point to chassis being in short supply, in the wrong place at the wrong time or chassis being out-of-service as being the main cause for the congestion at Los Angeles and Long Beach ports. Frustration at delays at Los Angeles-Long Beach boiled over at the TPM Asia Conference in Shenzhen organized by the Journal of Commerce in October. “I don’t care about how long it takes a ship to cross the ocean. When it gets to the other side, I want my cargo. I don’t want to be told, ‘Oh, it went to LA.’ And then it might be 17 days before I get it off the docks,” said Rick Smith, vice-president for global transportation at Sears Holdings. The largest US port complex continues to suffer from congestion caused by growing cargo volumes, chassis dislocations, vessels operated by carrier alliances calling at multiple terminals, cargo surges from big ships, gate hour restrictions at terminals, a truck capacity shortage, intermodal rail delays and labor uncertainties as the ILWU contract negotiations drag on. Even with the end of the peak season in October, container terminal operators around the world continue to struggle with congestion due to the pile-up at storage yards. Industry experts said it might take a month or even two months to clear the backlog at the terminal yards.