Seaports around the world faced serious logistic problems this week. From China to South Carolina the congestion of containers and ships being unable to unload their cargo has caused the supply chain to come to a halt.

The pandemic is not said to be the cause of all the problems, however, as some of the delays are due to many workers still being off work. Norfork Southern Railway says the delays in railway service from Atlanta and Memphis to Charleston are due to a “reduction of dray power and gate activity.” The main problem for the congestion in China was caused by shut-downs for the Lunar New Year celebrations.

Here is what you need to know this week in the supply chain industry.

Congestion at Charleston Port Could Take Six Weeks or More To Clear

The total number of containers stranded at the Port of Charleston grew to 19 containers on Monday morning. Norfolk Southern Railway announced that the trains charged for moving the containers will be delayed. No movement is expected from Atlanta and Memphis to Charleston as of Wednesday at 12:01 a.m. because of a “reduction of dray power and gate activity.” This means that because of reduced manpower, many owners are abandoning their goods.

Officials say this is a significant step in the wrong direction. They worry that the situation will continue to worsen if cargo owners refuse to claim their containers. South Carolina Ports Authority (SCPA) estimates that it will take up to six weeks to recover from this setback. Plus, heavy ice has set in, creating an even bigger backlog.

Port officials feel like they are swimming backward. January is known for heavy ice and snow, and delays are expected—but nothing like this.

On average, containers may sit in the terminals for 11 days in January. That has now increased to 15 days and counting. SPCA is struggling to find a solution.

Foreign Automakers Supports Mexico in Its USMCA Dispute

The lobby group for foreign automakers, Autos Drive America, publicly voiced support for Mexico in the dispute with U.S. automakers about origin rules for parts.

These rules dictate how many parts or what percentage of the finished product must be made in the region to qualify for tariff-free status according to the United States-Mexico-Canada Agreement (USMCA).

USMCA is the new regulation enacted in 2020 to replace the North American Free Trade Agreement (NAFTA). This dispute marks the first time Mexico has requested a panel to handle a disagreement with its largest trading partner under the USMCA.

In a public statement, President & CEO of Autos Drive America Jennifer Safavian said:

“We share the concerns outlined in Mexico’s dispute settlement challenge and urge an expeditious and fair resolution to the United States-Mexico-Canada Agreement (USMCA) rules of origin interpretation to enable the U.S. market—and the entire North American trading block—to reap the full benefits of the agreement.”

US Port Woes Seem Unsolvable

The ship queue sitting in the ports of Los Angeles and Long Beach—and the entire West Coast—is a supply chain problem that is not going to go away for quite some time.

Before the COVID-19 pandemic, wait times in the queue were zero. The industry as a whole wants to know when the supply chain can return to a “pre-pandemic” state.

The industry doesn’t have any workable solutions. Ships remain fully laden. Owners are unable to claim or move their cargo.

Empty Containers Becoming a Big Problem in LA-LB

Officials from the Port of Los Angeles and the Port of Long Beach are brainstorming with major container lines to come up with a suitable plan that will provide carriers enough incentives to load more containers than they are discharging. They hope this will clear up some of the congestion at marine terminals caused by empty containers without having any adverse effects on laden exports.

So far, they aren’t making much progress and no agreements have been reached.

The Worst Port Congestion is in North America: K&N

Kuehne + Nagel (K&N) is a global logistics and transport company. They state that this is the worst case of port congestion in history. There are currently 612 container vessels anchored or drifting along the ports of Antwerp, Rotterdam, Ningbo, Shanghai, Hong Kong, Savannah, New York, Long Beach, Los Angeles, Oakland, Seattle, Vancouver and Prince Rupert. 

Shenzhen Has Forced Terminals To Meter Container In-gating Due to Yard Congestion

Shippers in China hoping to move some goods through are facing additional disruptions and even more delays. This is largely due to factories closing down to prepare for the big Lunar New Year celebrations. Companies will close down for about two weeks, which may cause an additional backup at these already heavily congested ports. Shenzhen officials hope that metering container in-gating will help ease some of the congestion.