This analysis is based on data from Windward Port Insights – July 2022 Performance.
To say that the past 18-24 months have been challenging for supply chain planning might be the greatest understatement since, “Houston, we have a problem.” Sailing schedules have become unreliable, congestion has become zero-sum for some ports, and most costs associated with container shipping are highly volatile. What’s missing to begin digging out of this situation? Visibility.
More specifically, ocean freight visibility. Over 90% of all shipments go through the ocean, and in most cases, the ocean leg accounts for half of the total transportation time, so any delay ends up strongly impacting the overall ETA. Ocean transportation can also get very complex, for example in cases of transhipments, and unpredictable, such as with rollovers.
The goal of this monthly Port Insights edition is to improve shippers’ and forwarders’ planning abilities by bringing them insights from our AI-based Windward Ocean Freight Visibility solution, to better understand the current congestion status and turnaround times at container ports around the world, and to highlight the various route options that can get your cargo to their destination quicker and/or with a lower risk of delays (which would incur demurrage and detention fees).
Let’s get started…
Port Congestion, Measured the Right Way
As established in a previous Windward blog post, changes in port congestion cannot be estimated solely based on the number of vessels anchored, or drifting in waiting areas. When congestion is expected at a port, carriers may choose to slow-steam to save fuel costs. The most reliable measurement of congestion is based on transit time to port, which considers all vessels (slow-steamers and waiters), and measures the average amount of time it took to get to a port from its last port of call.
But transit times can differ significantly based on the location of that last port of call. For example, a vessel that arrived in Los Angeles from Shanghai, versus from Long Beach. To compare apples to apples and maintain the highest level of accuracy for this report, changes in transit times to each port were calculated separately by port of origin, by comparing voyages from A to B separately from A to C voyages. These were then compared to the previous month, to provide an accurate measure of congestion at ports.
Transpacific Eastbound (TPEB) – Analyzing the China-U.S. Trade Lane
China has been the largest global exporter since 2009. The U.S. has been the top destination for its exported goods since long before that. So if you’re a U.S. importer, there’s a fair chance you will find it important to keep a close eye on the turnaround and transit times of vessels calling Chinese ports.
Looking at the data from this month’s edition of Windward’s Port Insights, we find that shipping goods directly from China to the U.S. East Coast in July was fastest when Norfolk was the port of destination (POD), at 26 days on average. That was three days quicker than shipments that arrived to New York, and 12 days faster than to Savannah. On the West Coast, it took between 17 days (to Long Beach) and 20 days (to Oakland).
In Tianjin, July saw an 8% improvement in transit times to the port and a 10% reduction in turnover times (compared to June). Windward’s insights show that the port serves predominantly as a hub for vessels coming in from other ports in China and Asia, so booking vessel strings that include Tianjin may have an advantage in terms of their ability to stick to scheduled times.
In Ningbo, transit times to the port went down 10% compared to June, which may have helped vessels be more in-line with their schedules. As turnaround times can impact actual times of departure (ATDs), it’s essential to know that container vessels departing Ningbo experienced a 28% increase in port call durations.
Shekou, Yantian, and Nansha all saw rising congestion levels, as transit times to these ports and turnaround times for vessels calling them all increased. Shanghai remained at about the same level as the previous month.
East Coast was the Best Choice for U.S. Importers
There have been plenty of mentions of congestion shifting away from the U.S. West Coast to the U.S. East Coast in recent weeks. Based on Windward’s insights, the East was indeed the more popular destination. The top three ports on the East Coast were able to handle twice the number of container vessels and TEU capacity as the top three on the West Coast, while remaining much more efficient in terms of port call lengths per 1,000 TEUs. Transit times to the Eastern ports increased by 16% on average, compared to a 48% average increase to Western ports.
Keeping a close eye on congestion developments is especially important, as it can hint at the best time to book landside transportation before seasonality increases congestion and prices shoot up due to equipment scarcity –often to 2-4 times their price when supply is abundant. This type of visibility can also come in handy in cases of transhipments. Being aware of the congestion level at the transhipment port(s) can help you avoid delays by looking for alternative (less congested) options. Windward’s full Port Insights report provides an in-depth analysis of port connectivity and feeder turnaround times to help you do just that.
Taking the U.S. as an example, the port of Houston had container vessels arriving from and going to 17 different countries in July, potentially making it a good port to tranship from for shippers within the port’s network. But feeder vessels calling this port had a 41-hour average turnaround time in July. That is more than twice the turnaround time for feeder vessels that called the port of Norfolk, which itself is connected to 19 countries.
What About U.S. Exports?
If you’re exporting out of the U.S. and into Asia, you may be considering the best transhipment option between Busan in South Korea, and Kaohsiung in Taiwan. According to Windward’s insights from this month’s Port Insights, Busan would offer you more countries to be connected with, but Kaohsiung would be quicker to connect you to them.
It may seem challenging to decide how to proceed. That’s understandable, as in many cases, one advantage may come with a similarly important disadvantage. However, as mentioned in the opening paragraph, visibility is painfully impaired in the supply chain industry. Shippers, as well as the freight forwarders who try their best to offer them a good level of service, should leverage AI-based technology solutions to gain full visibility and actionable insights on their POL, POD, and full container journey, to improve their planning ability, reduce costs, and facilitate growth.
Access all the insights from the full infographic report.