The new US Presidency, additional ETS 2025 Surcharges, the Gaza ceasefire and CNY 2025 have impacted the global shipping market in the first month of 2025. We have summarized the key trends for you.
Port congestion has been a major challenge throughout 2024 – straining supply chains, disrupting shipping schedules, and impacting the global economy. As we begin the new year, it's more important than ever for businesses to understand the causes, effects, and strategies for managing port congestion to stay resilient and competitive. This article examines the key aspects of port congestion and offers detailed insights into congestion levels at various ports. It also provides your business with practical information to help you reduce the impact of these disruptions moving forward.
What is port congestion?
Factors that can cause port congestion:
- Increased global trade: More global trade means more cargo, which can overwhelm ports. Seasonal shipping peaks also create surge in global trade.
- Infrastructure inefficiencies and limitations: Some ports don’t have the efficiencies and facilities to handle larger ships or heavy traffic, which can cause port congestion.
- Labor shortages: Not enough workers, such as dockworkers and truck drivers, make congestion worse.
- Labor strikes: Strikes by dockworkers or other port staff can disrupt and halt operations, further exacerbating congestion and delays.
- Pandemic-related disruptions: COVID-19 is an example that has caused shutdowns and labor shortages, continuing to impact port operations.
Are you interested in international shipping? Read our comprehensive guide to what international shipping is.
What causes port congestion? – Current trends in 2024
As global trade evolves, port congestion has become an increasingly pressing issue. Various factors contribute to this challenge, impacting the efficiency of cargo handling and supply chain operations. Understanding these factors is essential for businesses aiming to navigate the complexities of port congestion effectively.
Key contributors that have or are causing port congestion in 2024:
- Covid-19: The pandemic in 2019 led to intermittent shutdowns and labor shortages that affected port operations for a long time.
- Weather conditions: Adverse weather can halt port operations. Tropical storms and hurricanes in the Caribbean Sea are examples of weather conditions causing port congestion.
- The expansion of e-commerce: E-commerce has increased the volume of goods being shipped. High e-commerce demand is going to continue to contribute to port congestion in 2024 because the ports can’t clear containers fast enough to keep up with orders being placed.
- Red Sea shipping crisis: The Red Sea shipping crisis 2024 has intensified port congestion by disrupting key routes and causing cargo delays. This leads to longer wait times and higher shipping costs, complicating supply chain management. Alternative shipping routes e.g. via Cape of Good Hope, also pose an impact to the longer transit times and shipping costs.
- US port strike: The US port strike that broke out in October 2024 is an example of an event that can increase port congestion by halting operations and delaying cargo handling.
Read more about the US port strike.
Congestion at different ports in 2024
This section examines port congestion statistics for various ports around the world. Providing you with insights on how these issues impact shipping efficiency and operational costs.
Singapore port congestion
This year, more ships arriving at once have caused congestion at ports, with some container ships waiting up to seven days for a berth due to rerouting from the Red Sea to the Cape of Good Hope.
In Singapore, the port handled 23.82 million TEUs in the first seven months of 2024, a 6.1% increase from last year. However, average waiting times dropped to under one day in July thanks to the reopening of old berths and new berths being completed.
To further reduce port congestion, Singapore’s port authority has tested allowing barges to move at night, which was previously restricted. These steps aim to improve connections with other ports and make container handling more efficient.
Los Angeles port congestion
In April, the Port of Los Angeles experienced strong activity, handling 770,337 containers, a 12% increase from 2023. Despite the increased volume, the port is managing operations efficiently, with dockworkers processing over 3.15 million TEUs so far in 2024 – Nearly 25% more than in 2023.
Port Executive Director Gene Seroka highlighted that Los Angeles ports are functioning well, without significant congestion issues. He reassured shippers that the port was ready to handle additional cargo as needed in the last months of 2024. Additionally, while the port processed 220,262 empty containers, this number represents a 14% decrease from 2023, indicating improved efficiency in handling overall container traffic.
Long Beach port congestion
The US port strike on the East and Gulf coasts has shifted freight to the West Coast. Officials from the ports of Los Angeles and Long Beach say that this won’t create problems for consumers.
The Port of Los Angeles has seen more cargo as importers move shipments west. Port of Long Beach CEO Mario Cordero also confirmed that operations are running smoothly, handling record volumes like in 2021 and 2022, but without delays.
Officials are confident that West Coast ports can manage the increased cargo flow effectively, reducing any potential port congestion from the strike.
Shanghai port congestion
Shipping lines are grouping ships together due to the Red Sea crisis, causing major congestion at Singapore and Shanghai/Ningbo ports. Ships are now waiting almost two weeks to dock instead of the usual one or two days.
At Singapore, 51 ships are being serviced, and 40 are waiting. In Shanghai and Ningbo, 92 ships are loading or unloading, while 81 are waiting. In total, about 800,000 TEUs of containers are being handled, with another 650,000 stuck at anchorage.
Savannah port congestion
The Port of Savannah is currently congestion-free. Savannah is benefiting from more manufacturers moving production to Southeast Asia, favoring shipping through the port. The port's performance has improved each month in 2024, with 2.2 million TEUs processed so far this year.
Overall, the Port of Savannah is managing increased cargo volumes efficiently, with no congestion reported.
Vancouver port congestion
High import volumes and a shortage of railcars are causing port congestion in Vancouver, a key entry point for overseas promotional products.
According to RailState, an intermodal freight data platform, March 2024 saw the highest intermodal volume at the Port of Vancouver since August 2022. This increase is due to a rise in goods movement after COVID and various global shipping issues – Including Houthi attacks in the Red Sea and drought conditions in the Panama Canal, leading to reroutings.
Charleston port congestion
Port congestion at the Port of Charleston rose by 132% in Q2 2024, increasing from 1.39 days in Q1 to 3.23 days.
The sharp increase in congestion at Charleston port and the ongoing disruptions caused by the Red Sea crisis underscore the importance of robust and adaptable supply chain strategies. Despite these challenges, it’s encouraging to see improvements in some North American ports, demonstrating the resilience and responsiveness of our industry.
The impact of port congestion
As port congestion continues to disrupt global trade, it's time to examine its impacts from various perspectives. Below we look into the economic, environmental, and social consequences of congestion at ports.
Economic impact of port congestion
Rising shipping expenses
Port congestion leads to higher shipping costs due to delays in loading and unloading ships. These delays result in increased demurrage charges – fees that shippers incur for using port facilities beyond their allotted free time. Furthermore, carriers therefore have to implement congestion surcharges to cover the expenses of these delays.
Inflationary pressures
Port congestion raises shipping costs, which in turn drives up the prices of goods. This increase can create a ripple effect throughout the economy, leading to higher consumer prices and potentially reducing people's purchasing power.
Read more about what´s driving the 2024 increase in shipping costs.
Impact on global supply chains from port congestion
Delivery delays
Port congestion often causes delivery delays, leaving goods stuck at ports. This leads to shortages for manufacturers and retailers, disrupting production and inventory management. Industries using just-in-time (JIT) systems are especially affected, as they rely on precise timing for materials to keep production running smoothly.
Stockouts
Port congestion can cause stockouts, where retailers run out of items due to delayed deliveries. This hurts sales, damages reputations, and lowers customer satisfaction. To avoid this, businesses may need to keep extra inventory, which increases storage costs.
Environmental impact from port congestion
Emissions from port congestion
Ships waiting at congested ports or taking longer routes burn more fuel. This worsens air pollution and contributes to climate change. Ports also produce emissions from constant use of heavy machinery and trucks.
Waste and resource strain
Port congestion can result in spoiled perishable goods due to delays, creating unnecessary waste. It also increases demand for shipping containers and port facilities, putting extra strain on resources and infrastructure.
The social impact from port congestion
Labor challenges
Port congestion often leads to heavier workloads and longer hours for port workers, which can trigger labor disputes or strikes, worsening delays. In some cases, worker shortages may occur, as staff struggle to keep up with the growing demands.
Impact on local communities
Port congestion can greatly affect nearby communities. Increased truck traffic and emissions can lower air quality and raise noise pollution. The surge in port activity may also strain local infrastructure, causing disruptions in daily life.
Port congestion – Management solutions
To remain competitive, your business needs to adapt to the challenges port congestion brings. Here are some key strategies for navigating port congestion. These include optimizing supply chains, enhancing customer communication, and leveraging technology.
1. Spread out the supply chains
Use multiple suppliers and source products from different regions. This way, your business won't rely too much on one port or route, helping to reduce port congestion, delays and risks.
2. Optimize your inventory
Maintain higher stock levels and use inventory management software to track stock in real time. Consider distributed warehousing to avoid bottlenecks.
3. Use today's modern technology
Use real-time tracking and automation to gain shipment visibility and improve warehouse efficiency, reducing the impact of delays.
4. Collaborating with reliable carriers
Choose carriers that are skilled at managing congestion, and utilize various shipping methods, such as air, sea, and land, to ensure deliveries arrive on time.
5. Keep your customers informed
Keep customers informed about delays and offer alternatives like expedited shipping or in-store pickup to maintain satisfaction and managing expectation.
6. Adjust your pricing
Adjust prices on your products and provide promotions to quickly clear stock or to compensate for increased shipping costs during congestion in ports.
7. Always be up to date
Stay updated on government and industry initiatives, like improved customs processes and green tech incentives, to better navigate port congestion issues.
Let us help you deal with port congestion
At Bertling, we understand the complexities of logistics and are committed to providing tailored solutions that address your shipping needs. Our expertise in managing port congestion, combined with air freight, sea freight, rail freight and road freight ensures that your cargo reaches its destination efficiently and on schedule.
Contact us to be your partner in navigating the ever-evolving landscape of global trade.
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