Port Congestion and Global Supply Chains

Good morning everyone. Today our group will present port congestion and global supply chains. With a focus on its causes, effects, and firm responses, my name is Jung Musung, and I will be one of today's presenters. Let me briefly introduce the structure of today's presentation. We will begin with an introduction on white port congestion matters.

then move into how port operations function within global logistics. From there, we will examine the causes of port consumption, first through infrastructure bottlenecks and then through demand surges and external shocks. Finally, we will discuss the effects on global supply chains, the economic impact, several Case Studies

and supply chain resilience strategies. So why does port congestion matter? The main point is that ports are critical nodes in global logistics chains. They cannot maritime transport with inland logistics such as trucks, railways, and warehouses. This is especially important because maritime transport carries around 80% of railways.

World Trade by Volume. So when a major port becomes congested, the problem does not stay local. It can delay shipping schedules, slow down cargo movement, and affect production and distribution in other countries. So global merit-to-him trade is highly concentrated in a small number of major ports.

For example, just 56 ports handle over 50% of the world's maritime import. This means congestion at a few key ports can quickly create wider supply chain disruptions. In short, port congestion matters because a local bottleneck can become a global problem.

Before discussing the causes of congestion, we first need to understand how a port normally works. As shown on this slide, port operations are a sequential logistics process. First, vessels need to berth. If berth capacity is limited, ships may have to wait at anchorage.

Then containers are unloaded by quick grains and the speed depends on grain productivity and workplace availability. After unloading, containers are stored in the container yard. If dwell time becomes too long, the yard can reach its stacking limit.

Finally, containers need to move out by trucks or rail. If outbound transport is delayed, the whole terminal may become gridlocked. So the key point is that these stages are closely connected.

Congestion often happens when delays accumulate across the port operation process. Now let's look at the costs of port congestion. There are two major categories. And the first is infrastructure botternets. The core message is that global trade volumes have rapidly outgrown the

the synthetic physical infrastructure of many traditional ports. Simply put, the world is shipping from more than many ports were originally built to handle. This mismatch between growing cargo volumes and limited port infrastructure creates the foundation for a long-waste time.

crowded yards and slower cargo movement. The first infrastructure problem is physical capacity limits. There are three main issues. First, many ports do not have enough buses for modern ultra-large container vessels, so ships may have to wait offshore. Second, older or non-automated cranes.

may not unload containers first enough. Especially when ships are large and heavily stacked. Third container yards often face land constraints when the yard becomes full. Newly unloaded containers have

Now, nowhere to go. Together, these limits slow down the whole port operations. Ships weigh longer, containers stay in the yard longer, and congestion gradually builds up. The second issue is the hinterland ecosystem problem. A port does not operate alone. Even if the terminal itself works

efficiently, congestion can still happen outside the port. For example, there may be limited warehouse space. Chassis shortages are restricted rail access. These problems make it harder for containers to lift the port smoothly.

As a result, containers stay in the yard yard, threat time increases, and shipping schedules become less reliable. So the operation reliability is that port congestion is not only a port side problem. It also depends on whether the surrounding logistics system can receive and move cargo efficiently.

The second major cause of port operation is demand surges and external shocks. The core message here is global supply chains are built for steady flows. Sudden demand volatility and external shocks break the system. Ports and shipping networks are designed around pre-pair.

predictable, stable blooms. When that predictability disappears and disappears, the system cannot adapt quickly enough. In other words, congestion is not only a capacity problem, it is also problem of volatility, uncertainty, and sudden pressure on a system designed for stability.

One clear example is the first pandemic demand shock. During the pandemic, consumer spending shifted from services such as travel and dining to physical goods such as electronics and furniture. According to McKinsey, global goods demand increased by around 5% almost.

overnight. However, shipping networks and ports are usually designed for stable and gradual growth. Not for such sudden demand spikes. As a result, ports received more cargo than they could handle vessels,

Schedules become less reliable and congestion quickly spread across major trade roads. There are two other important causes here. The first is operational and labor disruption. For example, empty containers may fill up in import regions while

Export regions do not have enough containers. At the same time, shortages of parts workers, truck drivers, and warehouse staff can slow down cargo handling. The second is geopolitical and climate stressors. When keyloads such as Suez Canal or Panama Canal are disrupted, ships have to reload.

This creates a new problem. Many vessels may arrive at alternative ports at the same time. As a result, those ports face sudden pressure and congestion spreads to other ports of the shipping network. Now let's look at how port congestion affects global supply chains. The main idea is that supply chains are highly sensitive networks. When a major port slowed down,

delays and costs can spread through every link. First, ports and container yards become crowded, which increases dwell time and reduces terminal capacity. When and then shipping loads are delayed, the delayed and vessel schedules become harder to predict. As cargo moves more slowly, companies may face inventory shortages.

delays and supply instability. So overall congestion and major ports can lead to longer shipping delays, higher freight costs and wider supply chain disruption. That is why port congestion is not just a local port problem but a global supply chain problem. Now my teammate will continue with the remaining sections.