From Costa Rica to India, port congestion is costing shipping lines and shippers millions of dollars in extra fuel, waiting time and delays as sailing schedules are disrupted, and imports and exports held up.

While some of the congestion is unavoidable due to adverse weather conditions, for example, it leads to delays and vessels having to ‘queue’ on arrival. However, most port congestion is due to port infrastructure failing to keep up with the growth in container or trade volumes.

Gavin To, vice-president of Taiwan’s TSLines, told Forward with Toll, “The impact of congestion is huge,” with the carrier facing extra fuel and hire charges.

Source: New York Times and Reuters

Outlining the economic impact of poor infrastructure and congestion in Africa, a report by PwC showed that a 25% improvement in port performance could result in a 2% increase in GDP. Tema in Ghana and Monrovia in Liberia have been the worst affected by congestion according to research group Port Overview.

That comes as container line Hapag-Lloyd forecast a 6-8% increase in throughput at African ports as a whole in 2018. This followed 7% growth at the continent’s ports last year, according to Hapag Lloyd’s parent company Maersk Line.

Industrial action in South Asia has exacerbated the problem of inadequate infrastructure.

In Chittagong, a strike by truckers in early August led to the closure of the port, affecting around 30 ships that were either in port or waiting to berth, Nelson Sequeira, senior director at intra-Asia owner X-Press Feeders told Forward with Toll.

“After the havoc caused by the heavy monsoon which disrupted the routine at Chittagong port, now there is countrywide action by the students’ association with the support of the transport union,” he explained.

“Due to this protest, Chittagong port is almost paralysed, and all the movements in and out are badly impacted. Such abrupt stoppages are only increasing the burden of escalating cost of doing business in Chittagong,” he added.

Ports in India were also affected by a nation-wide truckers strike in July as containers and cargo clogged terminals and depots.

“As the strike had spanned across eight days, it is expected that it will take 10 – 14 days to clear the backlog and for all container and cargo movements to return to normalcy, depending on the area impacted and its volumes,” said a spokeswoman at carrier APL.

In Europe, the growth in inland barge traffic has led to increased congestion at Rotterdam in the Netherlands and atGerman ports.

Rotterdam has tried to reduce congestion at the port by launching an initiative this year to consolidate volumes for shipments between Rotterdam and inland container terminals along the West-Brabant corridor. The move has resulted in 30% fewer inland vessels arriving at Rotterdam’s deep-sea terminals while truck volumes dropped 20% compared with 2017.

However, in Germany, Hapag-Lloyd said substantial growth in transport volumes and demand for inland transport, particularly around Stuttgart, coupled with congestion at transloading hubs is causing significant delays in the delivery of containers by rail and truck.

“This situation will not change substantially within the near future,” leading the carrier to “take exceptional action,” Hapag-Lloyd said in July. This could include rejection or the last-minute cancellation of the carrier’s haulage bookings or the diversion of cargo to alternate in land terminals, the carrier said.

Pointing to the impact on shippers, Hapag-Lloyd said the “additional costs… cannot be absorbed by the carrier but will have to be levied onto the cargo.”

Invariably it is cargo owners that have to pay for the congestion in the form of surcharges on shipments.

Carriers including CMA CGM and Hapag-Lloyd have imposed congestion surges in a diverse range of ports from Puerto Limon and Puerto Moin in Costa Rica to Rades and Bizerte in Tunisia and Yangon in Myanmar.