Port and depot congestion: impacts and solutions

Port and container depot congestion continues to be one of the most critical challenges to the global supply chain. The recent strike at U.S. East and Gulf Coast ports, which ended in October 2024, highlighted how quickly this phenomenon can amplify, causing knock-on impacts on international trade.

The current situation of port congestion

The current landscape presents an unprecedented complexity. According to available data, thousands of containers were diverted to alternative ports during the recent U.S. strike, with billions of dollars in goods stranded off the coast. A significant finding emerges from cost analysis: companies have had to increase spending on extra warehouse space by 20 %, highlighting how port congestion translates into an immediate economic impact for operators.

Container trade flows between China and New York: declining trend since September 2024 (source Econd)

Impact on major global hubs

Analysis of the current situation reveals a complex and highly differentiated picture across geographic areas. The effects of congestion vary significantly by region and the specific characteristics of individual port hubs, creating a scenario that requires increasingly sophisticated and tailored management strategies. The latest findings show distinctive patterns in three key areas:

• U.S. East Coast: The Port of New York has experienced a significant reduction in full containers, resulting in the need for logistical reorganization
• Asia: China’s manufacturing sector continues to show signs of contraction, with a PMI of 49.8 in September
• Europe: European ports are preparing to handle new flows related to changes in trade routes, especially in view of new ETS regulations

The main causes of congestion

The phenomenon of port congestion represents a multidimensional challenge, the origins of which can be traced to a complex interaction of both structural and contingent factors. In-depth analysis of the industry has identified two macro-categories of causes, each with its own specific implications for the global supply chain:

1. Structural imbalances:

• Shortage of storage space
• Limited handling capacity
• Insufficient coordination among supply chain actors

2. Contingent events:

• Strikes and labor unrest
• Changes in trade routes
• Regulatory and environmental pressures

Economic impact of congestion: analysis of costs and operational consequences

Congestion at ports and container depots is generating significant economic impacts along the entire logistics chain. Analysis of recent data shows that operational costs have increased substantially, with a 20 % increase in warehousing and storage expenses. This increase is particularly evident in the main trading areas, where the need for extra space to handle containers has created new financial pressures on operators.

Trends in full containers in the Port of New York in 2024: exports, imports and transshipments (source Econd)

Changes in container costs in major regions

The economic impact of congestion is directly reflected in container costs, with significant variations across geographies. The most recent data show a changing picture, where price differences between regions are becoming more pronounced, affecting the strategic decisions of industry players. Market analyses have shown the following variations:

• U.S. West Coast: A 40-foot cargo-worthy container reached $1,630
• US East Coast: The same container in New York stands at $1,030
• Europe: Average prices for a 20-foot container remain around $980
• UK: British ports record lower prices, averaging $770

Average prices for 40-foot containers at major U.S. ports: October 2024 (source xChange)

Solutions and mitigation strategies

To effectively address port and depot congestion, integrated strategies involving all players in the supply chain must be implemented. The experience of the recent U.S. strike demonstrated the importance of having robust and flexible contingency plans.

Storage space optimization

Storage space management is one of the most critical challenges in the global logistics landscape today. Industry analyses highlight how efficient space management is no longer just a matter of operational optimization, but becomes a real strategic asset for business competitiveness. The most recent data show significant trends:

• Inland storage facilities are assuming an increasingly strategic role
• Digitization of management processes enables better allocation of space
• Implementation of advanced reservation systems reduces waiting times

Technological innovation and automation

The logistics sector is undergoing a phase of profound digital transformation, driven by the need for greater efficiency and control. The implementation of innovative technology solutions is emerging as a concrete answer to the challenges of congestion, offering increasingly sophisticated tools for:

• Real-time tracking of containers
• Optimization of handling flows
• Proactive congestion prediction and management

Future outlook and recommendations

According to forecasts, we could see price stability through 2025, albeit at higher levels than before the pandemic.

How to prepare for future challenges

The evolution of the logistics market requires an increasingly structured and strategic approach to managing operations. Experience during recent crises has highlighted the importance of developing resilient strategies that have two main strands:

1. Strategic planning:

• Diversify logistics service providers
• Maintain adequate capacity buffers
• Develop strong relationships with reliable partners

2. Technology investments:

• Implement advanced management systems
• Adopt real-time tracking solutions
• Develop digital skills

Conclusions

Congestion at ports and container depots remains a significant challenge for the global logistics industry. However, through the adoption of appropriate strategies and experienced container management partners, it is possible to mitigate its effects and turn challenges into opportunities for growth and innovation.

Contact Sogese for customized solutions

In today’s environment of increasing complexity and volatility, it becomes crucial to rely on reliable partners and industry experts. Sogese offers comprehensive solutions for container and storage space management, with a proven track record and extensive network of facilities. Contact us to find out how we can help you optimize your supply chain.