Port of Oakland predicts major supply chain alterations post-pandemic

Oakland International Container Terminal, Alameda County, California, USA.

The Port of Oakland is expecting a substantial drop in cargo this spring as the COVID-19 pandemic leads to more blank sailings and continues to hinder growth.

Speaking to Harbour Trucking Association via video conference Port of Oakland Business Development Manager Andrew Hwang said that cancellations are up 10% year-on-year (YoY).

However, Hwang also said that it isn’t yet clear how severe the effect will be on volume at the Port.

More broadly, he said that supply chains could be permanently altered, with distribution centres having to relocate to more central locations to serve populations from fewer outlets.

“We’ll be facing a new normal,” said Hwang.  “Distribution patterns will change…it won’t be like it was.”

Distribution and warehouses will be central to ports and port-centric logistics, PTI explored this concept in a recent exclusive insight

Vessel cancellations caused by the COVID-19 pandemic have hit many of the major ports in the US, in particular Los Angeles and Long Beach.

In addition, consumer spending has declined, which means there’s less merchandise to load onto the ships that are sailing, and also that there is a shrinking need for ships between China and the US.  

The Port said to the Harbour Trucking Association that imports will see the biggest drop in the coming months.

However, demand for Oakland exports remains strong, but voyage cancellations could place some markets beyond reach. 

The Port said cargo is moving smoothly through Oakland and that volume of some goods to other Asian markets was strong.  There are no shortages of labor or equipment, it added.

The Port cautioned, however, that the coronavirus pandemic could permanently alter container transportation practices.  Shipping lines may consolidate more cargo on bigger ships while reducing the frequency of voyages, the Port said.

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