Ports face biggest crisis in 65 years

Ports have taken centre stage during COVID-19. While countless airports, roads, and trains ground to a halt during the peak of the pandemic last year, authorities continued to wave ships into ports.

This makes clear the importance of shipping but also the danger of port disruptions in the future. The Financial Times (FT) has reported the biggest disruption to ports since the start of container shipping 65 years ago.

“The Covid-19 pandemic has highlighted that ports are in desperate need of investment,” John Manners-Bell, chief executive at consultancy Transport Intelligence, told FT. “The entire port infrastructure system has been overwhelmed for the past year.”

According to Kuehne+Nagel 353 container ships are currently anchored outside ports around the world, more than doubling the number from earlier this year. The busiest ports, such as Los Angeles / Long Beach, are experiencing delays of 12 days or more.

During a time when next-day delivery has increased because of a pandemic-driven surge in online shopping, the logjam has caused shortages of stock and delayed deliveries, raising prices, frustrating consumers, and alarming regulators.

Adding to the problem is an aging and overburdened port system. “There were problems before the rush of cargo,” said Soren Toft, chief executive of the world’s second-largest container shipping group MSC.

“Port complexes were becoming old, there were capacity restrictions and restrictions on the ability to serve the ever-growing size of ships.”

The most obvious solution to the problem is investing in port infrastructure, short sea shipping, and short sea distribution but even if new money is found to expand ports, dredging ports and ordering equipment is not an easy fix. The time it takes to install a crane ranges from 18 months to more than a year, which makes it challenging for ports to adjust quickly to demand changes.

“We need to think outside the box” says Bob Kunkle, founder of the short sea distribution company Harbor Harvest. “We don’t need to get shipping containers from ships to warehouses, we need to get palletized cargo from ships all the way to stores.”

If we can deliver smaller cargos, aboard smaller ships, to smaller ports, we may be able to alleviate congestion in both ports and cities. The problem is that, apart from a pilot program in London, very little evidence exists that lawmakers are even aware of the problem.

But perhaps the biggest question is how ports will respond to potential changes in consumer demand after the pandemic if there is no government leadership and media interest in logistics wanes.

“The demand for next-day delivery has changed the way in which shippers select ports,” said Marc Levinson, author of The Box. “And that could change again if, after the pandemic, it goes out of favour.”

Don’t expect port and road congestion to go away anytime soon. We can blame shipping companies like Maersk and MSC for escalating costs but our problems run deeper than any single company.

First published in gCaptain