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After more than two years of ships docked outside America’s big West Coast ports, the queue finally reached zero in late November.
Marine Exchange of Southern California Executive Director Kip Louttit said it was “time to move into a different phase of operations and declare that the backup has ended.”
The announcement underscored a shift taking place on the ships and in the ports that are responsible for moving goods across the world. What was once the center of supply chain chaos is now heading for a long winter.
“Retailers are in the middle of the annual holiday frenzy but ports are headed into their winter lull after one of the busiest and most challenging years we’ve ever seen,” National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold said, in a statement.
According to the monthly Global Port Tracker report from the National Retail Federation and Hackett Associates, the key U.S. ports handled 2 million Twenty-Foot Equivalent Units (TEUs) in October, which is the latest month for which final numbers are available. That was down 1.3% from September, and 9.3% from the same month of 2021. When November’s numbers officially come in, the year-over-year decrease is expected to be 12.3% year-over-year, which would be the lowest total since January 2021.
Source: NRF/Hackett Associates Global Port Tracker.
It’s a fall from record highs of cargo handled by ports in the spring, as supply chains unclogged and brands and retailers ordered goods ahead to avoid the availability issues of 2021. This resulted in retailers not only being stocked for the holidays, but also facing an influx of goods that produced a glut of inventory. Rather than getting goods on shelves, this year is about clearing out stockrooms for many.
Looking ahead, the winter is expected to bring new lows in shipping volumes. In particular, the Global Port Tracker’s projected 1.67 million TEU for February would be the lowest since June 2020, and a 20.9% drop from the year before.
In an era of economic swings, it appears it is now the supply chain that is heading from being overstocked to having plenty of space.
For brands and retailers, the prospect of a more reliable supply network that facilitates better forecasting for inventory levels is on the horizon. There is also likely to be an opportunity for savings. On Thursday, Drewry’s World Container Index showed that spot rates for shipping containers fell for the 41st straight week to $2,139. That’s off 79% from the high of more than $10,000 in September 2021.
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When: January 31-Feb. 2, 2023
Where: Caesars Forum, Las Vegas