Port Situation West Coast

Posted on Jan 18

The ports of Los Angeles/Long Beach will most likely experience further gridlock during the month of January.

The unprecedented increase in import volumes that lead to an additional 34 additional vessels coming into the port since November 2018 resulted in congested terminals, increased truck turn times, chassis and rail car shortages as well as warehouse operations in the area reaching or exceeding capacity.

The fact that other major US gateways, including the Northeastern ports of New York/New Jersey, also experience equipment shortages, especially delays in of empty container returns, might lead to shortages of empty containers at Asian origins.

Retailers that imported larger-than-usual volumes ahead of potential duty increases now face warehouse space shortages that force them to use containers as additional storage space, which ties up containers and chassis that need to return to Asia to be loaded with new cargo. Some of the cargo shipped is spring merchandise already that retailers do not have finalized distribution plans yet.

Although the upcoming Chinese New Year holidays in Asia will probably provide some relief in volumes some industry players do not expect a return to “normal” before March.

The LALB ports were especially hard hit because importers concentrated their front-load shipments, especially in the last few weeks of 2018, into these ports in anticipation of a duty rate increase on January 1, and it may take weeks to reroute these volumes to East Coast ports again which would provide relief for the West Coast.

Operators in the port state that equipment in the region is all used up, truck waiting times at the marine terminals are getting longer, creating an artificial driver shortage problem, and that already congested marine terminals are rationing empty container returns as they run out of space to store them.

In December overall containerized imports increased 21.8% year-over-year, with the Port of Los Angeles recording a 21.4% increase.

It is expected that the port complex will see stronger than usual cargo volumes until vessel departures from Asia drop during the Lunar New Year celebrations. Cancelled sailings after mid-February arrivals will hopefully allow terminals and warehouses to clear out most of the container backlog. Carriers in the eastbound Pacific have already announced 35 blank sailings next month.

Should you have any questions about the impact of this situation on your shipments please contact your account team.