One of the many worries that everyone working in or related to shipment and trade is the overwhelming effects of port congestion. Port congestion has been on the rise since the start of the pandemic that is Covid-19. Effects of port congestion can be seen and felt by anyone in the market and with no solution to the pandemic, this effect is likely to only grow further.
WHAT IS PORT CONGESTION?
To explain so in most layman terms, port congestion is simply the waiting time. The time a ship has to wait before it can dock and unload its content on a port. When the amount of ships on a port increases more than its capacity, this waiting time increases proportionally. Of course, no one likes waiting, which is why port congestion is one of the biggest problems faced by ships and companies.
Port congestion is actually quite common but with the advent of coronavirus, the severity of its rise has only increased further.
PORT CONGESTION AND COVID-19:
There is no doubt that Covid-19 has changed the lives of almost everyone. It doesn’t matter what field of work or education you are in, this pandemic has affected us all in one or another.
One huge impact of Covid-19 is the effect it has had on port congestion. With the uncertainties that the pandemic has brought upon our lives, it is no doubt that port congestion too would increase.
With all seven continents affected by Covid-19 and almost all of the world going under lockdown from time to time, port congestion has seriously been affected and has increased tremendously all around the world.
Factors such as health issues, lack of employment, lockdowns, and more stem directly from Covid-19 which has caused a huge strain on port congestion and the shipment business as a whole.
National, as well as international trade, has been impacted by this pandemic. Covid-19 has caused delays in deliveries and shipments due to the strict rules and regulations being followed under these trying times.
PORT CONGESTION IN 2021:
The new year is well and underway but that does not mean that the problems of the past year have also been left behind. The disasters of the pandemic are still looming over our heads and with the threats of the second wave and new variants of Coronavirus, this pandemic is far from over. But, with the release of vaccines in various places, we are all hopeful for a better dawn on the horizon.
So, what does that mean for ports and port congestion? Well, the current situation is very much similar to last year and so, expect the starting months of this year to be as bleak as the last ones of 2020. But hope is not lost and it is expected that soon we will see better solutions to issues caused by port congestion.
According to the Pacific Merchant Shipping Association (PMSA), a new method of shipment will have to be adopted. A method based on working together for the betterment and functioning of proper shipment and deliveries. This method is in needs to be applied as soon as continuous trade starts to ensure quality and safety.
EFFECTS OF PORT CONGESTION:
Port congestion is an important issue that needs to be addressed properly before shipment companies come at losses. The effect of port congestion has caused a lot of issues in the market. It is very important to address these issues before we look for solutions.
1. DELAY IN DELIVERIES:
Port congestion causes a lot of problems and one of the most prominent ones is a delay in deliveries. Deliveries are delayed for various reasons but port congestion is seen to be the grand issue facing the community. Port congestion causes issues in the docking of cargo which causes a serious delay in deliveries.
2. INCREASE IN OPERATIONAL RATES:
One of the biggest concerns and effects of port congestion is the increase in operational rates. When companies have to face issues with the shipment, they have o other option but to increase their operational rates.
Demurrage which is the charge to be paid to the owner of a ship on accounts of failure to unload or dock the said ship on a given time is a factor which is widely affected by port congestion. The agreed-upon time is usually called ‘laytime’. Demurrage is a penalty that is to be paid after a period of 3-5 days after the expected delivery.
With the increase in port congestion, the rate of demurrage also increases which can cause serious damage to everyone involved in the shipment procedure.
3. EFFECTS ON CARGO:
Port congestion has a lot of effects and one of the most prominent being the effect it has on cargo. With the commotion caused by port congestion, it is very easy for cargo to get lost and miss its connecting ships and trucks. This can cause scheduling problems which leads to further delay in shipment.
4. LACK OF LABOUR:
Covid-19 has caused a lot of problems in the shipment industry. One of the biggest issues caused by the pandemic is the increase of unemployment. Unemployment has been observed in every industry and so has the shipment industry been affected as well.
Shipment requires many workers on hand. From towing to clearing, there are many jobs required to be done. Factors such as low wages and management issues are also instrumental in people leaving their jobs in the shipment industry.
5. REDUCED TONNAGE CAPACITY:
Port congestion can greatly affect and result in reduced tonnage capacity. Tonnage capacity is the carrying capacity of ships. This leads to ships having to restore to means such as sailing blank. It is not possible for ships to stay at various ports for days on end because this is likely to cause financial issues to the ship owners.
Port congestion is a common problem faced in the shipping industry and with the Covid-19 on the rise, this problem has only caused further issues for shipping companies. America alone faces a tremendous amount of port congestion every year. There are many smart solutions that can be adopted to reduce port congestions such as cargo redistribution and virtual warehousing.
We, at Beacon Logistics, believe in the importance of keeping updated with all the issues that might arise during trade which is why we keep our services updated no matter what the conditions might be thrown our way.