- container crunch could add to price pressures, Port of Vancouver warns
- the Port of Vancouver’s current spacing will mean logjams and worrisome congestion could begin anytime between 2025 and 2028
- ocean ports are experiencing severe backlogs having ships wait days or weeks to unload cargo
- container operations are “fluid” currently with limited congestion and one ship at anchor
- consumer prices are rising sharply largely due to supply chain bottlenecks
The head of Canada’s largest port anticipates it will run out of container capacity by the second half of this decade, threatening to prolong the price pains of Canadian importers and exporters says an article in Financial Post.
Logjams and worrisome congestion
Robin Silvester, president, and CEO of the Vancouver Fraser Port Authority said that even with a current project set to expand capacity by the equivalent of 600,000 containers, the Port of Vancouver’s current spacing will mean logjams and worrisome congestion could begin anytime between 2025 and 2028.
Ports experience severe backlogs
The grim outlook comes at a time when, worldwide, ocean ports are experiencing severe backlogs that have ships waiting days or weeks to unload cargo as a result of rotating consumer demand during the height of the COVID-19 pandemic, said Trevor Heaver, professor emeritus at the University of British Columbia’s Sauder School of Business.
Stockpiling inventory
Businesses, in turn, began stockpiling inventory, which boosted demand for shipping containers to transport materials throughout the supply chain. At the same time, natural disasters — such as a typhoon in China — along with labor shortage at ports, either due to outbreaks or low supply, exacerbated container pile-ups at various ports.
Container operations ‘fluid’ currently
A spokesperson for the port authority said container operations are “fluid” currently with limited congestion and one ship at anchor. This week “Having said that, our terminals are operating at a very high level which creates the risk of congestion as a result of supply chain disruptions,” the spokesperson said in an email.
Expansion to the Roberts bank terminal
The port authority is currently in the process of getting permit approval to build an expansion to the Roberts Bank Terminal that will make additional room for the equivalent of 2.4 million containers, but the proceedings have been in the works for 10 years and the earliest the capacity will be available is in the first half of the 2030s.
Rising consumer prices
If the forecasts prove to be true, it could add to inflation pressures. Already, consumer prices are rising sharply largely due to supply chain bottlenecks, with inflation hitting an 18-year high of 4.1 percent in August. There will be pressure on prices for importers — for the things you buy at the shops — and it will put pressure on exports. It’ll increase the costs of exporting, making them less competitive in global markets.
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Source: Financial Post
