State of Freight

These ports are causing the most congestion in the global supply chain, new CNBC charts show

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Exclusive: Where the world's top trouble spots in the supply chain are right now

The drop in Shanghai's port productivity, which is driven by to the lack of people working due to Covid lockdowns, can be seen in the container wait time at the port, according to CNBC's new Supply Chain Heat Map.

"In Shanghai, ocean terminals, warehouses, and trucking services are operating as normal but with lower efficiency due to staff shortages and lack of drivers," said Brian Bourke, chief growth officer of SEKO Logistics.

CNBC's Supply Chain Heat Map is a new data tool CNBC created along with 10 of the world's top maritime and logistics data providers. It shows the scores of challenges facing the global supply chain in real time, so investors can understand the inventory problems facing companies.

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Trade is a forward-looking indicator of a country's economic health as well as a company's supply chain. A vessel at rest is not making money. A container at rest means inventory issues. The heat map tracks all of the critical pieces within the supply chain: factory capacity, vessel availability, container availability, trucking capacity, port productivity, vessel transit time and rail capacity.

Tesla announced last week it was forced to reduce its vehicle production in its Shanghai because of the lack of parts. Toyota had to halt production in eight factories in Japan for the same reason. The company announced its May production for both Lexus and Toyotas would be cut due to the lockdowns. Automakers Volkswagen, Mazda, General Motors have also had to scale back production as a result.

The gradual relaxing of Shanghai's lockdown is slated to start June 1, but details are vague.

"This gradual reopening greatly depends on the number of cases in your area and building," said Jasmine Wall, general manager of Growth, Marketing & Communications, Asia Pacific, at SEKO Logistics. "Some people have been granted two-hour permits to go food shopping but the majority remain under full lockdown."

U.S. supply chain snapshot

The Supply Chain Heat Map shows the challenges do not stop in China.

According to MarineTraffic and Blume Global data, the Port of Oakland tops the list of congestion with vessels taking six days to unload and load. Import containers are lingering almost 11 eleven days in the port before they are transported. The Port of Los Angeles is the second highest in wait times, clocking in almost 12 days containers to leave the port and five and a half days for vessels to be processed. Rail delays of 6.2 days are also plaguing the port's productivity.

"Today, rail boxes are waiting more than six days to get on a train," said Gene Seroka, Port of Los Angeles executive director. "That's triple the dwell time compared to prepandemic days. Rail volume is up six-fold since February. We need more rail assets in place at America's busiest port complex. It's important that all stakeholders redouble efforts to maximize rail cargo off our docks and into the domestic economy."

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BNSF and Union Pacific serve the Port of Los Angeles. BNSF has been embroiled in a labor dispute over its attendance policy for months. According to Greg Regan, president of the Transportation Trades Department, AFL-CIO, around one-thousand workers have resigned since February. Union Pacific recently told the Surface Transportation Board it has met almost half of its 2022 goal to hire 1,400 new train crew members.

The continued congestion on the West Coast has increased the flow of trade to the East Coast and Gulf ports. The Port of New York and New Jersey has greatly benefited from this trend.

"We are already seeing some front loading, with Asian manufacturers shipping out goods early to mitigate predicted port congestion," explained Pervinder Johar, CEO of Blume Global. "Instead of routing through West Coast ports, more of these shipments are heading to ports on the East Coast, simply shifting capacity issues from West to East. I believe that though we have seen improvement in the flow of freight from ports nationwide, that may be short lived."  

Courtesy: Freightos

While Savannah is green right now, expect a shift to yellow or even red. MarineTraffic says it is seeing a buildup in waiting vessels off of Savannah, which is an indication of demand moving East.

"In the week of May 9, the port saw an average of two container vessels, equaling 20,000 waiting container capacity," said Alex Charvalias, general manager of MarineTraffic. "During the week of May 16, there was an average of 13 container vessels, equaling 100,000-plus waiting container capacity. Given this major increase of waiting containers week over week, we're estimating that waiting times at port will increase by 100% to an average of three or more days."

The CNBC Supply Chain Heat Map data providers are global freight booking platform Freightos, creator of the Freightos Baltic Dry Index; logistics provider OL USA; supply-chain intelligence platform FreightWaves; supply chain platform Blume Global; third party logistics provider Orient Star Group; marine analytics firm MarineTraffic; maritime visibility data company Project44; maritime transport data company MDS Transmodal UK; ocean and air freight benchmarking an analytics firm Xeneta, a leading provider of Research & Analysis, Data Services and Advisory Services within the global supply chain industry Sea-Intelligence ApS; and air and freight logistics provider SEKO Logistics.