It’s been a tumultuous year for ocean shipping, driven by the pandemic, ongoing port congestion, a shortage of shipping containers, port strikes and unforeseen incidents, such as the Suez Canal blockage. We recently examined FourKites’ ocean data across North America, Europe and China to see how dwell times, shipment volumes and on-time deliveries are faring a year after the first pandemic lockdowns.
The quarterly data ending March 31, 2021, shows that shipment volumes, overall, are bouncing back after a volatile 2020. The downside is that while shipments are rising, other factors — such as the lingering effects of the Suez Canal blockage and an unprecedented container shortage — are contributing to increased dwell times and late shipments as ports struggle to keep up with the volume.
FourKites data through the first quarter of 2021 showed a surge, as ocean shipments increased across North America, China and Europe. This increase is especially pronounced in Europe and North America, with economies bouncing back and consumers are putting in purchase orders faster than ever. Contrast this with China, which is currently exporting more than it’s importing. This trade imbalance is leading to increased shipping fees and contributing to the global shortage of shipping containers, which experts predict will likely persist until 2022.
China has seen a continued increase in exports over the course of the past year, with a 29% increase from Q4 2020 to Q1 2021, as demand for goods from China continues to be driven, in part, by American consumers.
Chinese import trends have been following the same trend, except for Q4 2020, where imports dropped by 22% owing to the great trade surplus that happened due to demand for pandemic goods. However, shipping activities in China picked back up after the Chinese New Year (which began on February 14), as we’ve seen in years past. As is typical following Chinese New Year, FourKites observed a 25% increase in shipment volume in China between February 14 and February 21. By way of comparison, the post-Chinese New Year increase was 113% in 2020, which also reflected a post-COVID lockdown resurgence in trade.
North American exports and imports have been more volatile, as the country struggled to contain the worsening COVID crisis at the end of 2020 and felt the impact of the container shortage. For example, while imports were up by 62% in Q2 2020, they declined the following two quarters, only to rebound 45% in Q1 2021. Export volumes dropped at the end of 2020, as well, with a 49% dip in volume.
And as vaccine distribution got underway and Americans regained confidence in the economy, exports bounced back by 114% during Q1 2021 at the four busiest ports across the region: Charleston, Long Beach, Los Angeles and New York.
However, with the sharp increase in shipments and global shipping on the rise, it’s no surprise that North America is experiencing a surge in export dwell times. At the busiest North American ports of LA, Charleston and New York, we see export dwell time having increased by 300%, 100% and 67%, respectively, over Q4 2020. Dwell remained stagnant at the port of Long beach for the same period.
And although import dwell times increased in Q3 2020, they still remain much higher than historical averages. Importers continue to factor the dwell on the west coast ports into transit time, production planning and customer expectation management.
At the busiest European ports of Antwerp, Hamburg and Rotterdam, FourKites observes incremental dwell time increases over Q4 2020 and Q1 2021. As illustrated below, this increase is much more pronounced for exports compared to imports, with import dwell time having remained stable over the course of the last year.
With progress comes hurdles, and we see that reflected in the data around late shipments. Across the board, North America, China and EMEA are experiencing a 25% rise in late shipments compared to Q1 2020.
As the shipping network struggles to control the shipping container shortage and surging transport rates, we expect late shipments and dwell times to continue to rise for the foreseeable future. Unless something drastic changes, from an economic or freight standpoint, the industry will need to find new ways to adapt.