How the 2022 US Port Congestion Crisis Affects Supply Chains

Ships have to wait an average of 5-7 days before they are allowed to dock at most US Ports.

As discussed in our supply chain resilience guide, modern supply chains are very sensitive to disruptions. Port congestion in the US is an excellent real-life example of a supply chain disruption.

In 2022, ports across the US face unprecedented delays, challenges, and congestion. Some ports are also experiencing complete shutdowns for weeks at a time. It brings us to an important question – Why do US Ports continuously face congestion?

The simple answer that can be given in this situation is a record increase in the number of shipments. However, our recent intelligence report on the port congestion found out that this is a gross oversimplification. There are ports that are experiencing a decline in 2022 and still facing congestion.

You can find out more about these ports by downloading our free trade report on the US Port Congestion Crisis in 2022.

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Causes of the Port Congestion Crisis

A port is a complex entity. Port authorities have a lot of responsibilities, and running a port efficiently requires cooperation between multiple departments. In addition, the average port can employ up to a thousand people.

Just like a supply chain, the slightest change or disruption in can lead to congestion. There is no singular cause of port congestion across the US. However, there are certain common factors that ports around the country face.

• Increased shipment volume: The US, in 2021, has experienced a record YoY rise in imports and exports. The increased shipment volume is one of the key reasons for the increase in congestion at ports around the US. According to our latest report on US port congestion in 2022, ports such as Oakland experienced a 35% increase in the number of shipments and TEU compared to previous years.
• Worker shortages: Since the beginning of the pandemic, the US has faced an increasing number of worker strikes, walkouts, and union-related problems across industries around the country.
• COVID restrictions: Regular COVID outbreaks and new variants have slowed down the normal functioning of ports and shutdowns due to the virus are a common phenomenon even in 2022.
• Geopolitical tensions: The trade war between US and China, the Russia-Ukraine war, etc. have led to significant shocks across global supply chains. In a time of global economic slowdown, such shocks tend to have a larger impact than normal.

Who does the Port Congestion Crisis Affect Most?

The short answer is – Everyone. Port congestion is such a massive problem is because it affects multiple parties across multiple countries. Manufacturers, freight forwarders, VOCCs, NVOCCs, Carriers, Warehousing, Truckers, Buyers, and the end Consumer are all going to face problems in 2022.

Port congestion is a problem that needs to be addressed and solved as soon as possible. If given more time, it may create larger problems for the US supply chain and the knock-on effect can have global consequences.

To assess how bad it really is and the potential damage it is causing, we recently took a deep dive into global import-export data. Based on the data we collected, we compiled a detailed intelligence-backed report on the 2022 US Port Congestion Crisis.

In this report, we found:

• The most congested ports in the US
• Average delay at each port
• YoY comparison for each port
• Top shipping companies and VOCCs that the crisis affects
• Countries whose exports are affected by US Port Congestion
• And more!

This report is completely free and can be downloaded by clicking on the button below. Get your copy now!

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Impacts of The Congestion on US Supply Chains

The current port congestion crisis is going to have short-term effects on the US supply chain. The long-term effects are yet to be seen. However, the short-term effects are already visible. Here are some of the observable ones:

• Raw-material shortages: Raw-material shortages have been a common theme since 2020. However, after the growth spurt US supply chains saw in 2021, there is going to be a slowdown again. The crisis is going to lead to major raw-material shortages for most of the year.
• Limited stocks: Another relic of the pandemic, imported products from popular brands are likely to be out of stock temporarily due to limited availability and a delay in shipments.
• Increased management costs: US supply chains have already been experiencing an unprecedented increase in management costs due to rising container prices, regular disruptions, and more. However, the port congestion crisis is going to increase management costs further.
• Increased shipping costs: A natural consequence of the congestion, increased shipping costs are likely to impact every industry in the US. From importers to exporters, everyone will have to pay higher prices for shipping goods from one place to the other.

Summing Up

The good news is that according to current projections, the congestion will ease out in the latter part of the year. However, with the instability of the current global economy, it can be a while before things truly go back to ‘normal’. Until then, businesses need to keep adapting to the landscape and keep optimizing their supply chains.