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While Chinese ports are on the verge of recovery, transit times to the United States have remained high, according to supply chain visibility company FourKites.
Chinese port cities returned to lockdown earlier this year in response to a re-emergence of the coronavirus. But Shanghai and a few others reopened on June 1. (Production delays and inland transportation bottlenecks have somewhat slowed the ramp-up of port production.)
“Now that the lockdown has been lifted, we are seeing more shipments coming into the United States,” Raj Patel, vice president of third-party logistics at FourKites, told Transport Topics. “If you look at the trend, a lot of it was going to the west coast and was being transferred to the northeast and the Port of Savannah, which is now seeing record shipments. Now we’re starting to see a lot of those shipments returning to Los Angeles and West Coast ports.
The data also shows a decrease in dwell times for exports while average load transit times remain high.
“The lockdown has helped ease some of the inland transportation, but now that it’s open we’re starting to see capacity tightening up, especially on the west coast,” Patel said.
The two-week average shipment volume for shipments is down 3% from levels the day before the shutdowns began on March 12. This compares to a 43% decline in April. But the percentage of shipments delayed along this route is 37% from the peak of 39% seen in April.
Average transit times for shipments arriving in the United States from Shanghai remained high. The 60-day average transit time is now up 51% to 75.6 days from March 12.
Dwell times for export shipments showed signs of recovery. The two-week average ocean dwell time was down 4% to 6.5 days from March 12. It is also down 27% from the peak seen earlier in June.
But import dwell times remained above levels seen before the lockdown. The two-week average length of stay in the ocean increased by 16% to 4.7 days from March 12.
The reopening of port cities in China got off to a rocky start. Bottlenecks have formed due to inland transportation, labor constraints, and availability of raw materials.
President Joe Biden will have to decide whether to extend a series of tariffs against China covering technology transfer, intellectual property and innovation. Former President Donald Trump imposed the tariffs, which cover about $370 billion in Chinese imports. Ending tariffs could help dampen inflation. But there is strong opposition to such a move from core groups like the unions.
“Many of the tariffs imposed represent interests that directly impact individual union members,” said Thomas Conway, chairman of the Labor Advisory Committee for Trade Negotiations and Trade Policy, in a letter. “Other tariffs support the overall level of retaliation that is appropriate to address China’s unfair, predatory and protectionist trade policies.”