The coronavirus pandemic could permanently alter container transportation practices, Calfornia’s Port of Oakland cautioned.
As explained, shipping lines may consolidate more cargo on bigger ships while reducing the frequency of voyages.
Supply chains could be altered, too, the port said. For example, the online purchasing explosion prompted by shelter-in-place orders may hasten distribution center reconfiguration or consolidation. Distribution hubs could be relocated to more central locations to serve population centers from fewer outlets.
“We’ll be facing a new normal,” Andrew Hwang, Port of Oakland Business Development Manager, pointed out.
“Distribution patterns will change…it won’t be like it was.”
Canceled sailings could hit cargo volume
Fewer containerships would likely mean less cargo at the port this spring, Oakland maritime officials said in a message delivered to the Harbor Trucking Association last week.
The port told freight haulers that 20 May and June voyages to Oakland have been cancelled. The result could be a 5-to-15 per cent drop in containerized cargo volume heading into summer.
“It’s a clouded picture. About 10 percent of our scheduled vessel arrivals have been canceled by shipping lines, but we don’t know if that will translate into a similar drop in volume,” Hwang noted.
The port blamed vessel cancelations on the coronavirus pandemic which has stunted global trade. With consumer spending down, there’s less merchandise to load onto ships. That means fewer vessels needed between Asian manufacturing centers and US ports. Import volume is expected to suffer the biggest cargo decline in coming months, according to the port.
On the other hand, demand for Oakland exports remains strong. However, voyage cancelations could place some markets beyond reach, the port explained. Fruit, nut and meat exports are particularly coveted by overseas trading partners, especially in Asia.
The port added that Oakland exports to South Korea increased 31 per cent last month and to Japan 18 per cent.
As informed, cargo is moving smoothly through Oakland. There are no shortages of labor or equipment.
The Port of Oakland loads and discharges more than 99 per cent of the containerized goods moving through Northern California.
In March 2020, the port’s full imports stood at 67,035 TEUs, a decrease when compared to 74,714 TEUs handled in the corresponding month last year, the Port of Oakland’s monthly container statistics show.
Full exports were 83,782 TEUs in March 2020, an increase from 78,280 TEUs reported in February 2020 and a drop from 88,202 TEUs seen in 2019.