Port Congestion | Week 42 Line-up:Ten Florida ports remain closed, drought and warehouse overflows expected to cause congestion at Brazilian ports.

Hurricane Milton caused ten ports in Florida to remain closed

Affected by Hurricane Milton, 10 ports, including two major commercial ports on the Gulf Coast of Florida, remain closed. Previously, the U.S. Coast Guard set the Port of Tampa Bay and the Port of Manatee to "Zulu" status due to the hurricane, prohibiting commercial ships from entering, and the status was not lifted after the hurricane.?It is reported that Florida is facing severe traffic congestion and fuel shortages, and about 17.6% of gas stations have been out of oil. This will seriously affect port transportation.

The Port of Tampa Bay is the largest?and most diversified port in Florida, handling more than 30 million tons of cargo each year, including bulk cargo, container cargo and other general cargo. The Port of Manatee is located at the entrance of Tampa Bay in the eastern Gulf of Mexico and the north of Manatee County, Florida. It is one of the largest deep-water seaports in Florida and one of the largest import gateways for fresh fruits and vegetables in the United States. In 2023, the Port of Manatee handled $351.17 million in exports and $1.84 billion in imports. Relevant people said that the Port of Manatee still had no power on October 10.

According to experience, for every day the port is closed, the supply chain takes about 3 to 5 days to recover. Coupled with the previous strike by workers at the US docks, Florida needs more time?to deal with the accumulated goods.

Drought and excess cargo pile-up?are expected to cause congestion at Brazilian ports

According to a report released by the Brazilian National Commodity Supply Company (CONAB), Brazil's cotton production is expected to be 3.65 million tons in 2023/24, higher than the previous estimate of 3.644 million tons. This is also supported by the latest October report of the US Department of Agriculture (USDA), which raised Brazil's cotton production to 3.658 million tons. This production increased by 0.60% month-on-month, and the year-on-year increase was as high as 15.31%, showing the strong momentum of Brazil's cotton industry.

However, behind this optimistic production forecast, there are some hidden concerns. Recently, Brazil has suffered a severe drought, causing the water level of the Amazon River tributaries to drop to a record low. At the same time, Brazil's agricultural exports have grown rapidly, especially the surge in exports of major agricultural products such as sugar, soybeans, corn, and cotton, causing export logistics to pile up at the ports. The combination of these factors has led buyers to expect congestion at Brazilian ports from October to December.

The U.S. strike has ended, but other problems are beginning to emerge

Although the U.S. strike lasted only three days, its impact on port operations is still continuing to ferment. According to relevant reports, at least 54 container ships were lined up outside the port during the strike, and it is expected to take 2 to 3 weeks or even longer to gradually ease. This situation has undoubtedly become one of the key factors affecting global container ship capacity due to port congestion.

As the end of the year approaches, the peak shipping period has also arrived as scheduled. In order to meet this challenge, many cross-border sellers have chosen to prepare goods in advance. However, what followed was a significant increase in the probability of cargo inspection. This change may be due to the high attention paid to safety and compliance during the peak shipping period at the end of the year. More stringent inspection requirements inevitably led to a slowdown in the speed of cargo exports, and the natural increase in cargo exports at the end of the year further exacerbated port congestion.

Against this background, relevant people?said?that starting from October 10, cargo arriving at ports in the eastern United States will face additional surcharges. This temporary surcharge is a direct response to the strike, aimed at alleviating the economic pressure caused by the strike. In addition, with the arrival of the peak season, the increase in surcharges has also led to excess cargo pile-up?in Amazon and other warehouses. This not only affects the timely entry of goods into the warehouse, but may also cause the warehouse to postpone the appointment time,?which may be delayed by one to three weeks, bringing greater uncertainty and challenges to the seller's logistics arrangements.

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