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US Ports Stretched as Retailers Set to Begin Their Peak Season

VESSEL backlogs at the heart of US supply chain congestion have receded in some places, but cropped up in others, including in east coast ports, reports the Wall Street Journal.

Meanwhile, other problems have rippled across logistics networks. Warehouses are full. Trucking companies and railways are short of workers and equipment. And container yards at ports are jammed with hundreds of thousands of boxes.

At the nation's busiest port complex at Los Angeles and Long Beach containers sat in yards an average of six days before being trucked away, and nine days to move by rail, according to the Pacific Merchant Shipping Association.

"When you remember back to the fall of last year - third and fourth quarter - that was our biggest impediment, folks getting their cargo off the docks," said Los Angeles port executive director Gene Seroka.

"We've got to start digging into this backlog pretty quickly."

But around the country, officials at gateways say they are better prepared to deal with the coming import surge after more than a year of juggling clogged docks, vessel backups and record import volumes.

Ports note that they have overhauled operations to better cope with congestion before it gets out of hand.

They have extended operating hours to handle more containers and set up pop-up container yards to store overflow boxes.

There are signs of a softening in shipping demand. Retailers such as Target and Walmart are pulling back on some orders as consumer spending shifts from goods to services.

Analysts at JPMorgan Chase in a recent report said they expect restocking to slow, especially in sectors such as home furnishings and electronics that have seen dimming demand.

A slowdown in imports could give ports the breathing room they need, said the report.

"I just can't see a big peak season," said Craig Grossgart, senior vice president of global ocean freight for Itasca, Illinois-based freight forwarder Seko Logistics.

Container shipping line Ocean Network Express, he said, recently increased Seko's weekly space allocation on vessels by 15 per cent, suggesting there is more room on ships.

Even a gradual increase in container volumes this peak season could present a challenge for ports.

Import volumes were up 6.6 per cent at major US ocean gateways during the first quarter compared with the year-ago period, marking the start of a record year, according to research and consulting firm Beacon Economics.

Source: Shipping Gazette

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