This report from Windward, the maritime software company, and Sea-Intelligence which provide maritime research and analysis, should cause some eyebrows to rise:
In January 2022, the ports of Los Angeles, Long Beach, and Oakland were still dealing with the much-discussed congestion crisis that started towards the end of the previous year. According to Windward’s AI-driven insights, the impact of the congestion could be felt by the unusual average length of port calls by container vessels to these ports, which stood at 10.9 days during the first week for 2022, nearly twice the average for 2021.
The congestion can be seen more clearly when looking at the transit time to these ports for container vessels from their previous port of call. January 2022 saw an increase of 99% in transit time compared to January 2021, and some voyages experienced a much higher average increase, such as those originating in Tacoma, U.S. (8.9 days vs. 2 days), Manzanillo, Mexico (28.8 days vs. 11.5 days) or Busan, South Korea (29.9 days vs. 18.5 days).
In recent weeks, all eyes were turned towards the congestion throughout China, due to the strict Covid policy across a country that is home to seven of the world’s ten largest container ports. The first significant container port affected in the country was Yantian, when Shenzhen went into lockdown between March 14-20, 2022.
During the week of March 20, immediately after restrictions were lifted in the region, Windward’s AI-driven insights show a spike of 51.25% in the average length of port calls by container vessels at Yantian port. In April, the average transit time from the previous port of call to berthing at Yantian rose by 98%, compared to April 2021, with container vessels arriving from Taiwan and Vietnam spending an additional 81% and 45%, respectively, on the water, before being able to berth at the port.
Through much of 2021 the “supply chain” problem largely consisted of bottlenecks at the Ports of Los Angeles and Long Beach. As the graph above illustrates by February 2022 that had nearly been resolved only to run headlong into considerable slowdowns in ships leaving Shanghai. As of April a quarter of all container ships were stuck in Chinese ports. I think it’s a fair assumption that is worse now.
My question is to what degree is what we are seeing a supply chain problem and to what degree a dependence on China problem? Is there an empirical difference between those two? If our supply chain problem is actually a problem of dependence on China, doesn’t that imply that China has a formidable weapon to use against us? Just as we are trying to use the world’s finance system against Russia, are the Chinese in a position to use the world’s transportation system against us? How vulnerable do we want to be?
