The flood of imports in the US ports is not abating
AFP, published on Thursday, July 28, 2022 at 07:08
The port of Newark-Elizabeth on the east coast of the United States, with its hordes of semi-trailers circling among the stored containers, seems gripped by a feverish excitement despite the economic slump.
The volume of cargo passing through ports near New York and northern New Jersey in the first half of the year was 11.4% higher than the same period in 2021 and is already at a record high.
“Volumes remain extremely high,” said Michael Bozza, deputy director of business development for the Port of New York and New Jersey, the organization that oversees the region’s maritime terminals.
Activity is likely to weaken in the second half, partly due to inflation, he predicts.
But in the meantime, warehouses, the rail freight network and several key points in the supply chain remain “under pressure”.
An indicator on Thursday could show that the United States is theoretically in a recession.
But activity in the country’s ports is not decreasing.
“Are we seeing an economy grind to a halt? No,” said Phil Levy, economist at logistics company Flexport. “Imports go on, consumption goes on”.
America’s major ports on the Atlantic and Pacific coasts are no longer having to deal with long queues of boats waiting to be able to unload their containers as they did last fall.
Fears of a Christmas ruined by gifts not arriving in the US on time ultimately proved unfounded as stores took extraordinary measures to ensure their shelves were stocked, including by chartering planes or their own boats.
But despite inflation and economic slowdown, consumers continue to buy goods and imports are still flowing in massively.
Sometimes new problems arise quickly, as last week when trucker protests against a new California law halted shipments to the Port of Oakland near San Francisco.
The port has since resumed normal operations, but the incident underscores the vulnerability of infrastructure that has been overburdened since the pandemic began.
– Delays on the tracks –
“There’s not much room for maneuver in the system if something goes wrong,” notes Sal Mercogliano, a marine historian at Campbell University in North Carolina.
Port of Los Angeles director Gene Seroka recently pointed the finger at the accumulation of rail freight delays at the origin of more than 20,000 blocked containers at his port. It takes three times longer than usual to get the goods onto the rails.
“We must act immediately to avoid a national deadlock,” he said during a July 13 news conference.
However, much of the problem stems from the massive downsizing at railroad companies like CSX and Union Pacific prior to the pandemic.
There are currently 40,000 fewer jobs in the industry than in 2016, said Jason Miller, a supply chain specialist at Michigan State University.
Another reason for concern: the ongoing negotiations between the unions and the management of the railway companies.
Both sides still have to agree on wages, health insurance and working conditions.
US President Joe Biden had to step in to delay a possible strike by at least 60 days by signing a decree on July 15 introducing a brokerage system.
Dockers on the west coast are also currently discussing their collective agreement, which expired at the end of June.
Ports on the US East Coast and Gulf of Mexico took on some cargo, some shipowners worried about the threat of strikes in Los Angeles and Long Beach and a repeat of last fall’s chaos. .
Michael Bozza estimates that 70% of the additional volume handled by the ports of New York and New Jersey this year will come from the West Coast.
But, assures Jason Miller, “we’re in a better position than we were eight or nine months ago.”
“There is a lot of uncertainty about the spending power of American consumers for the coming holiday season,” Miller said.
And we must also take into account the severe restrictions that China has recently imposed in the face of the resurgence of Covid, which has halted production there.
Nevertheless, waiting times in ports remain much longer than before the pandemic, Phil Levy recalls.
“We still have significant difficulties in the supply chain,” he says. “If the situation has improved a little in ports lately, it has gotten worse at rail level,” he says.