Cargo volumes continue to rise at ports along the Gulf Coast as Port Houston's September container activity rises 11 percent compared to last year. This rise in cargo is ongoing while congestions continue at West Coast ports in Los Angeles and Long Beach.
"We expect container as well as demand for steel to continue growing through the remainder of the fourth quarter and into next year," says Roger Guenther, the executive director at Port Houston.
The port's largest gains in September comes from a 445 percent year-over-year (YoY) increase in steel exports. The 331,852 tons of steel exports last month represent an increase of 131 percent YoY.
In September, Port Houston handled 10,114 twenty-foot equivalent units (TEUs) in empty import containers – down 5 percent compared to the same month last year, but up 17 percent from August. Exports of these empty containers are up 122 percent in September compared to a year ago.
Port Houston has 2.5 million TEUs in the first nine months, compared to 2.1 million through the same period a year ago – a 16 percent YoY increase.
In Alabama, Port of Mobile is also receiving record cargo volumes due to the shift in supply chains. The port's Intermodal Container Transfer Facility is already seeing an increase in volume as shippers opted to use Mobile for rail service to Memphis, Tennessee and Chicago. Port of Mobile already handled 369,738 TEUs in the first nine months of the year, a 27 percent year-to-date increase compared to the same period in 2020.
Port Corpus Christi also reported an increase in their cargo transport, saying that it moved 14.4 million tons of cargo in September, an 8 percent YoY increase. Its largest gain came from liquid bulk cargo, which increased 2,978 tons. Shipments in petroleum totaled 5.2 million tons in September, a 27 percent YoY increase. Port Corpus Christi has handled 8.2 million tons of crude oil as of September, a 2 percent decline compared to the previous year.
Congestion, expanded operations challenge port efficiency
United States' cargo ports still continue to see strong revenue performance as a result of the sustained congestion and record volume in the West Coast, according to Fitch Ratings. However, maintaining operational efficiency is becoming more of a challenge as bottlenecks still remain unresolved due to disrupted supply chains, mismatched rolling stocks, capacity-strained logistics networks and ongoing labor shortages. The congestion is expected to persist through the holiday season up to early 2022.
Additional investment in warehouse capacity and logistics will also be necessary to support the increased port operating hours in West Coast ports of Los Angeles and Long Beach. Cargo passing through these ports could see increases in handling costs related to their extended gate hours, with added costs eventually passed on by retailers to their customers.
Some East Coast and Gulf Coast ports have also seen large increase in container volumes, specifically Georgia Ports Authority and Port of Virginia. Cargo volume increases at most East Coast and Gulf Coast ports have usually been constrained by capacity limitations, Panama Canal ship size restrictions and more congested inland transportation networks.
However, logjams may also drive additional volumes to East Coast gateways as more ports pursue capacity-enhancing expansion and optimization plans. (Related: Worsening shipping crisis will affect retail supply lines and shopping for holidays.)
For instance, Savannah is now expanding its storage yard and rail yard, and will soon be increasing the size of its berths. Virginia's semi-automated facilities and rail access also allow them to adapt more quickly to vessel calls and cargo handling needs.
Get more updates about supply chain issues at Bubble.news.
Sources include:
Please contact us for more information.