Lack of capacity in US ports due to increased demand.

Monday, June 14, 2021

Global supply chains are unraveling and the United States market in its process of reactivation created deficiencies in its ports, driving up prices, creating shortages and causing chaos for consumers of maritime services. In the last seven months the Los Angeles-Long Beach container port complex, the largest in the United States, could see up to 40 container ships at anchor, with nowhere to go. There is no space in the ports. Up to 100,000 containers, containing everything from running shoes and household electronics to frozen seafood and furniture, are being seen waiting to be unloaded and then shipped to factories, stores and homes across the country.

US ports are very saturated, a problem that will not go away with the pandemic. No US port was represented in the top 50 container ports globally in productivity performance, according to the new Container Port Performance Index from the World Bank and IHS Markit, released last month. Therefore, having a much higher demand than usual due to the instability caused by the demand generated more chaos in its ports. In addition, the lack of manpower caused by the stimuli that the government gave has generated little supply to meet the needs of the ports.

Disruption of the flow of goods has occurred repeatedly in US ports, not to mention global incidents like the blockage of the Suez Canal, the waves that send thousands of containers out to sea. Less than 1% of Biden’s $ 2.3 billion infrastructure plan is slated for ports and waterways. But no amount of spending could remove all obstacles to a smooth flow of goods through American ports.

Since it is difficult to forecast trade flows on a weekly basis, much less anticipate pandemics, trade disputes, and business cycles, the inevitable result is frequent supply and demand imbalances and delays.

As a result, fleet operators and carriers, and customers, have to accept periodic disruptions. That means a greater focus on resilience change. One looming risk is geopolitical: With tensions rising between Washington and Beijing, it’s worth keeping in mind that 42% of all containers arriving in the US come from China.

The opportunity is clear for Mexico, its geographical position puts our market in sight. The important thing is to add value to our raw material, that is, to deliver a finished product, to add manufacturing processes to be the main supplier in Latin America.