FMC Releases Report on Roots and Effects of Congestion at U.S. Container Ports

A staff report released by the U.S. Federal Maritime Commission has identified cargo growth, investment constraints, the introduction of larger ships, and ocean carrier alliances as the major causes of congestion at the nation’s container ports.

The report entitled ”U.S. Container Port Congestion & Related International Supply Chain Issues: Causes, Consequences & Challenges,”
suggests that continued growth in U.S. international trade seems to be outpacing investment in new capacity at terminals and “last mile” connectors to ports. U.S. liner cargo could double in volume sometime between 2025 and 2029. Continued growth will further stress the operating limits at U.S. ports, terminals, connector roads, and other supply chain facilities, according to the report.

Public funding sources are constrained by fiscal considerations. Traditional investors in ports and terminals are relinquishing their assets to new types of investors who are looking for full commercial returns on these investments. The report suggests that more investment is needed to meet expected future demand, and that public-private partnerships could be a possible partial solution to the shortage of public sector funding. Collaborative ventures with neighboring ports to maximize the impact of available resources are also suggested.

Container yards need to be configured to accommodate the larger flow of containers coming from larger vessels, and to adjust the resources required to handle this greater volume to ensure containers are cleared out of the yard before it becomes congested, according to the report.

Another major cause of congestion is formation of new alliances and larger alliances, which is increasing operational complexity within the terminals and is resulting in more movement of IPI containers among and between terminals within a port complex.

The report suggests that a solution to this issue is greater coordination among the alliance members, including possible negotiation of joint terminal service agreements and re-examination of stowage and discharge procedures. Better communication among alliance members and chassis providers to allow chassis needs to be identified well in advance of vessel arrival, according to the report.

“International trade relies on our nation’s ports, therefore port congestion is a paramount question at the international supply chain level, and is not a solely domestic concern,” FMC Chairman Mario Cordero said.

”In July 2014, President Obama moved the Build America Investment initiative forward. Inclusive in the initiative was the need for investment in our ports. In line with the Administration, the Commission is committed to addressing the question of congestion at our vital port gateways. Infrastructure investment is at the core of the discussion, however, other factors must be addressed in the near term to ensure an efficient and reliable international ocean transportation system and the relevant supply chain.”