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Port Congestion a Growing Concern in International Trade

By Karen Lynch

It is estimated that as much as 90 percent of global trade is carried by sea.1 And everything about maritime transport seems correspondingly massive – cargo ports with thousands of acres of docks and warehouses, port throughput measured in hundreds of billions of dollars, a new container ship that is as long as the Eiffel Tower is tall.2 However, the sheer scale of ocean shipping also means that logistic bottlenecks such as port congestion can create significant problems for companies involved in import-export trade.

Increasing Container Traffic Adds to Delays Affecting Global Trade


Today, port congestion is growing worldwide, as an increase in container traffic over the past year and ongoing consolidation in the shipping industry compound other problems such as inefficient transfer to inland transportation, customs delays, and episodic weather- and labor-related slowdowns.3,4,5,6 A recent letter to the U.S. Federal Maritime Commission (FMC) reveals the level of concern at some international traders. “Our company has experienced many incidents of severe congestion at container terminals in U.S. ports,” wrote American Coffee Corp. President Donald A. Pisano. “Whether the past incidents involved weather, labor issues, government exams, the arrival of very large vessels or other disruptions, the port delays were beyond the control of my company or our draymen,” he said, using the term for local transport.7


All told, “the lack of efficiency in supply chains, logistics and trade facilitation is equivalent to an additional tariff on the imported or exported goods,” according to an FMC report titled U.S. Container Port Congestion & Related International Supply Chain Issues: Causes, Consequences & Challenges.8


Across the world, “delays have serious effects on just-in-time distribution systems, which seek to reduce inventory and distribution costs, and on lean production techniques, which seek to cut down on sources of waste in manufacturing,” according to the International Chamber of Commerce. “Delays result in huge costs for importers and a serious lack of predictability and reliability in supply chains.”9


The problem can drive companies to switch to less-congested ports. “Cargo flow, to all intents and purposes, is much like water – it goes for the path of least resistance,” one trucking executive said, reflecting on a recent shift from a northeastern U.S. port to other locations farther south.10


Cargo Data to Ease International Trade


As in many other aspects of international trade, improved data may help ease the problem by enabling companies to better track shipments and identify any delays. While the ocean shipping sector has been slower to digitize operations than some other industries, momentum appears to be building.11


For example, some electronic transaction platforms handle hundreds of thousands of container orders per week for exporters/shippers and freight forwarders, providing capabilities such as real-time tracking of a shipment’s location during the estimated six to 81 days it takes to transport containers to overseas destinations.12,13 Some are looking to move beyond tracking a shipment’s “last known location” to transmitting more precise location information using sensors and GPS, which may provide companies conducting global trade with an increased ability to hold carriers accountable.14,15


Some freight forwarding companies also provide online customer portals and dashboards that track location. 16 Technology vendors are looking to integrate such capabilities into customers’ inventory or ordering systems.17 Recently, a major technology company and global shipping giant teamed up to develop real-time visibility and automate paperwork using blockchain, the distributed database technology behind virtual currencies.18


Other services monitor port performance by measures such as container traffic growth, and also provide pricing indexes for containerized freight.19 At a less-granular level, the World Bank publishes a Logistics Performance Index (LPI) that compares countries in terms of the efficiency of their clearance processes, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, timeliness of shipments and other factors.20 Out of 160 countries, Germany ranks first, the U.K. is eighth, the United States is 10th and Australia is 19th.21


More Work Ahead to Ease Import-Export Trade


Data is only part of a much larger picture, however. “Policy makers not only in the best performing countries, but also in emerging economies, increasingly see the need to implement coherent and consistent policies to foster seamless and sustainable supply chain operations as an engine of growth,” according to the 2016 LPI report.22 In the U.S., an advisory committee to the U.S. Department of Commerce recently issued a call for increased efforts to reduce communication gaps and coordination inefficiencies among shippers, terminals, ocean carriers, and land transport companies.23


In some cases, ports are being privatized in an effort to improve efficiency and reduce cost. “There’s been quite a significant movement to port privatization in Australia, with roughly half a dozen ports having been privatized, mostly in the last five or six years,” according to one investor.24


Meanwhile, the World Trade Organization recently achieved ratification of the Trade Facilitation Agreement, a global accord aimed at expediting the movement, release and clearance of goods across borders. The United Nations Conference on Trade and Development is running a growing effort to annually benchmark participating ports to help them improve performance across a wide range of indicators. National-level port productivity initiatives are also producing best practice reports.25



Port congestion is increasing, causing problems for companies involved in global trade, but so are initiatives aimed at addressing the problem. Companies engaged in international trade can use a variety of new data tools to track their shipments. In addition, there are broader efforts at a local, national and international level to monitor and increase port efficiency.

Karen Lynch - The Author

The Author

Karen Lynch

Karen Lynch is a journalist who has covered global business, technology and policy in New York, Paris and Washington, DC, for more than 30 years. Karen also is a principal at Content Marketing Partners.


1. “Shipping Facts,” International Chamber of Shipping;
2. “En route from China, This is the Biggest Container Ship Ever to Dock in the U.S.,” CNN;
3. “Ocean Carrier Consolidation Hits Smaller Terminals in Brazil,” Journal of Commerce;
4. “Measuring Port Performance,” Long Read;
5. “RWI/ISL-Container Throughput Index Remains Upbeat,” Institute of Shipping Economics and Logistics;
6. U.S. Container Port Congestion & Related International Supply Chain Issues: Causes, Consequences & Challenges, U.S. Federal Maritime Commission;
7. Letter to the Federal Maritime Commission, American Coffee Corp.;
8. U.S. Container Port Congestion & Related International Supply Chain Issues: Causes, Consequences & Challenges, ,U.S. Federal Maritime Commission;
9. “The Need for Investment in Port and Freight Transportation Infrastructure,” International Chamber of Commerce;
10. “NY-NJ port loses East Coast share amid congestion concerns,” Journal of Commerce;
11. “Ocean Forwarders Take Slow Boat in Replying to Rate Quotes, but Does It Matter?”, DC Velocity;
12. “Container Booking,” INTTRA;
13. INTTRA Track & Trace,” INTTRA;
14. “Sensors Soon to Play Role in Real-time Cargo Visibility,” Journal of Commerce;
15. “The Missing Piece: The Infrastructure Needed to Make Forwarding Visibility Stick,”SupplyChainDive;
15. “International LPI,” World Bank;
16. “UPS Upgrading Container-Tracking Tech,” Journal of Commerce;
17. “The Missing Piece: The Infrastructure Needed to Make Forwarding Visibility Stick,”SupplyChainDive;
18. “IBM Looks at Blockchain for Real-Time Supply Chain,” RT Insights;
19. “ISL Monthly Container Port Monitor 2017,” Institute of Shipping Economics and Logistics;
20. “International LPI,” World Bank;
21. Connecting to Compete: Trade Logistics in the Global Economy , World Bank;
22. Connecting to Compete: Trade Logistics in the Global Economy , World Bank;
23. “ASCC Calls for Increased U.S. Data Sharing,” Breakbulk Magazine;
24. “Why Big Pension Funds Love Australian Ports,” Benefits Canada;
25. “Commentary: Feds Offer Tips on Port Productivity,” American Shipper;

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