TSA warns of Asia port congestion

Port congestion in Asia could be looming later this year and next, says the TransPacific Stabilisation Agreement, along with cost increases and labour slowdowns. In a market review issued yesterday, the 14-member association forecast that capacity this year will grow by 9.7%, in line with demand patterns, but growth could be hampered by congestion, particularly at Shanghai, Hong Kong, Singapore and Colombo. Ron Widdows, TSA chairman, said: “The Asia-US supply chain infrastructure is essentially operating at capacity right now. There isn’t a lot of margin for error in the system.” The Los Angeles/Long Beach planned new truck programme is causing the TSA concern because of the possible effect on costs. Widdows said that fuel will become an even bigger factor in ocean economics next year, as bunker costs are already at about $400/short ton. Vessels are averaging 95% capacity on all Asian routes, the TSA said, which is likely to continue into October. Fears of labour problems on the West Coast and limited rail capacity have led to the TSA adding 70,000feu on the Panama Canal-East Coast route this year. The TSA said that demand on this route is outstripping that via the West Coast.