Liner operators may slowly be coming to terms with port congestion in North America.

But industry leaders believe structural changes are needed to prevent the container shipping sector from repeating the chaos that has disrupted transpacific services.

Statistics show that the backlog of ships waiting to berth in the ports of Los Angeles and Long Beach is falling.

Twenty-two containerships were at anchor in San Pedro Bay on 14 March, according to the Marine Exchange of Southern California.

That is a reduction from a peak of more than 40 in late February.

Congestion has led to ships waiting for up to nine days after completing their eastbound sailing from Asia to the US West Coast (USWC), forcing operators to rip up sailing schedules for round-trip voyages.

This week, average waiting times had fallen to 7.6 days, slightly down from the peak six weeks earlier.

Congestion is, however, still forcing lines to wrestle with a shortage of ships and containers, and unreliable schedules.

Leading executives are calling for fundamental change to the way business is conducted at US ports.

The container shipping industry needs to learn from what is happening on the transpacific, says Jeremy Nixon. Photo: ONE

Jeremy Nixon, chief executive of Japanese carrier Ocean Network Express, used this month’s JOC TPM21 ­Conference to outline countermeasures to guard against a repeat of the disruption affecting North American ports.

They include better cargo ­forecasting, enhanced berth productivity and increased terminal flexibility to absorb sustained demand spikes.

Nixon pinpointed one of the causes as different productivity levels at container ports in Asia and the US.

“Asia has been investing in bigger terminals, more cranes, generally works 24/7, so the overall productivity is 50% higher in Asian ports than North America,” he said.

In the second half of 2020, more than 150 ad-hoc loaders were deployed on the USWC, an average of nine extra loaders per week.

Ships held up in US ports could not be replaced, given the tightness of the charter market, Nixon said.

The use of larger ships carrying larger cargoes is also an issue. A decade ago, the average vessel on the transpacific trade was 5,000 teu, compared with ­vessels of 12,000 teu and sometimes 18,000 teu today.

Alphaliner estimates that 31.8% of the current neo-panamax fleet is active in Asia to North America services.

Asia has been investing in bigger terminals, more cranes, generally works 24/7, so the overall productivity is 50% higher in Asian ports than North America

Jeremy Nixon

A further 15.6% of the fleet is deployed in Europe-Asia-USWC pendulum services, which typically see 35% of their overall capa­city dedicated to the transpacific.

The analyst expects more ships of 12,900 teu to 15,200 teu to operate on the Asia to US East Coast (USEC) trade from April, when THE Alliance will upgrade one of its loops using ships of 8,000 teu to 13,500 teu.

Rates on the transpacific remain strong.

The price of shipping boxes from China to the USWC rose 6% by 10 March to $4,514 per 40-foot equivalent unit (feu), according to the Freightos Baltic Index.

That keeps Asia to the USWC rates 239% higher than the same time last year.

Prices from Asia to the USEC dipped 6% to $5,416 per feu, but are still 112% higher than a year ago.

“Post-Chinese New Year, demand remains unusually strong, which is keeping ex-Asia ocean rates extremely elevated, though not pushing them any higher for the most part,” said Judah Levine, research lead at freight monitoring company Freightos.

Rates from Asia to Europe remain unchanged, but demand is expected to stay very strong during the first half of the year, with implications for congestion.

“The sustained surge means that port congestion and delays — especially in the ports of LA and Long Beach — won’t likely ease any time soon,” Levine said.

He noted that some carriers are cancelling or diverting services to avoid those ports.

Nixon described the situation in the transpacific as a “black swan” event caused by the pandemic. But, he added, lines need to find ways to deal with sustained periods of strong demand.

“We need to learn and adapt where we can to avoid these types of issues from happening when we get further problems in the supply chain in the years to come,” he said.