Blanked and canceled sailings have left ports around the world empty of vessels and loaded with cargo awaiting transportation since the Chinese Lunar New Year shutdown was exacerbated by the COVID-19 global pandemic. The issues that arose from dealing with such a monumental shift in supply chains have the logistics community pondering changes that are coming as we get back to normal. While experts still expect numbers at east coast ports to be down around 15% for May and June, fewer blanked sailings coming this summer are cause for hope.
March and April’s numbers were around 3% down, year over year and everyone expects May and June numbers to be close to 15% below 2019 levels, but the blanked and canceled sailings that have plagued ports are starting to slow down and stop in some cases. This is a good sign that once the quarantine and isolation protocols are lifted that we’ll see numbers start to climb to pre-coronavirus levels. East coast ports and especially those in the southeast and on the gulf should expect the return to happen even faster as manufacturing comes back to the United States in some forms.
It’s unexpected that all manufacturing will return, though when it does it’s easy to expect it will be in the southeast and gulf states because land and labor are far less expensive than in the heavily populated areas – a situation which has seen the population in the south grow steadily in recent years. There may not be a significant manufacturing return in the U.S. but the factories won’t remain in China completely as more move to other countries in Southeast Asia where the virus wasn’t as detrimental. As companies moved factories out of China and into Vietnam, for instance, they’ll hardly be eager to move back once they’re settled. This will be good for the east coast ports as traversing the Suez Canal is a popular option for those looking to avoid the U.S. west coast.
The recovery will not be easy or fast, but it will come as more countries start to ramp up shipments and air freight cargo gets back online. With air capacity at a premium, the unclogging of the bottleneck in ocean freight will facilitate more shipments to move back and forth. Stopping a machine that is the size of the global logistics supply chain may have happened in a short period of time, but getting her back on her feet will take time.
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