Warning issued about West Coast port congestion

Terminals being hit with heavy volumes because of tariffs at a time when many longshoremen are taking vacation.

Warning issued about West Coast port congestion

Terminals being hit with heavy volumes because of tariffs at a time when many longshoremen are taking vacation.

Warning issued about West Coast port congestion

Terminals being hit with heavy volumes because of tariffs at a time when many longshoremen are taking vacation.

 
Shippers could face delays in retrieving containers moving through West Coast ports over the next few weeks.
    MIQ Logistics issued an alert Tuesday saying, “U.S. West Coast ports, specifically Los Angeles and Long Beach terminals, have received unprecedented volumes and are experiencing extreme congestion leading up to the Lunar New Year. Containers are reportedly sitting longer than normal, and once the containers are out-gated, many are staying out longer than normal. These delays are also contributing to chassis shortages in the area.”
    The Overland Park, Kansas-based logistics company said factors contributing to the congestion include:
    • “Strong market conditions and increases in volume prior to the implementation of tariff increases.” (Though a threatened increase in tariffs on $200 million of Chinese goods from 10 percent to 25 percent has been delayed until March, many goods were shipped early to beat the tariff clock.)
    • “Carriers have added 12 extra loader vessels and three up-sized vessels calling the Los Angeles/Long Beach complex over the balance of 2018. The extra loader vessels are expected to transport an additional 128,000 TEUs of freight over the coming weeks. Many of these vessels are calling terminals outside of the normal alliance pattern, which could result in disruptions in chassis availability because of the mis-positioning of containers and chassis.
   • Lingering effects of the typhoons in the Eastern Pacific.
    • Warehouses across the region have all but reached capacity.”
    MIQ said carriers are encouraging customers to pick up their containers as soon as they become available and return them back to the designated terminals as quickly as possible, but that based on forecasts, the carriers have advised this situation may continue until early February.
    Erhan Ergin, regional vice president for DHL Global Forwarding, U.S., West region also said his company "has observed West Coast port congestion due to the combination of the holidays and increased volume. We saw this same congestion around the Thanksgiving holidays, and similar congestion is expected around the Christmas holidays."
    “There’s no doubt we’ve seen a surge in cargo because of the concern over rising tariffs,” Gene Seroka, executive director of the Port of Los Angeles, told American Shipper. We’ve also been impacted on the export side by retaliatory tariffs (from China against U.S. exports). The imbalance we normally see is a little more exacerbated than usual.”
   Seroka said marine terminals “are working around the clock. We’ve seen a lot of cargo come through, and it’s been a challenge to say the least.”
    An executive at one of the large Los Angeles terminals explained that there are not as many workers available at terminals because many longshoremen take vacation around Christmas and the new year. In addition, many of the longshoremen who are working around the holidays have less experience than those who are taking time off, and so productivity falls, he said.
    In most years, this isn’t an issue because cargo volumes normally subside around the end of the year. But this year volumes surged because many shippers moved up shipments in an attempt to get cargo in before Jan. 1, when tariffs were slated to increase on many Chinese imports from 10 percent to 25 percent.
    He said the Pacific Maritime Association has had to ration longshoremen so that all terminals have workers.
    The "PierPass 2.0" reforms that were put into place by Los Angeles and Long Beach container terminals in November that put in place a flat, round-the-clock fee on container movements (instead of waiving the fee at night) and a requirement by all terminal operators that shippers have appointments for their truckers to pick-up cargo--has helped reduce congestion at the ports.
   Congestion may be exacerbated in the next two weeks because many terminals have shortened hours. They will be closed on Christmas and New Year’s Day, and some terminals will have curtailed hours on Christmas Eve and New Year’s Eve. For example, PierPass's most recent schedule shows only five of 12 facilities with definite plans to be open during the first shift on the day before Christmas, six with planning to be closed during the day and one facility to announce its plans. The terminal gates all close at 3 p.m. Christmas Eve.
    Seroka noted that many of the U.S. tariff increases are affecting the manufacturing sector, which represents about 50 percent of the imports moving through the port. That means that warehouses in Southern California, where there is about 1.8 billion square feet of warehouse space are pretty full.
    Youve got containers of brake pads, wiring harnesses and just tons of automotive components piling up. On the retail side, same thing, he said.
    Mike DiBernardo, deputy executive director at the Port of Los Angeles, explains that this is resulting in containers and chassis remaining off dock longer than the four-day average that chassis providers plan for.
    “Theyre encouraging customers to pick up containers as soon as possible and returning them back to the designated terminal as quickly as possible,” he said.
   Stats posted on the website of the "Pool of Pools" created by chassis providers in the Port of Los Angeles and Port of Long Beach--TRAC Intermodal, DCLI and Flexi-Van--indicates that the average "street dwell" for a chassis is five days, which is up from 3.9 days from the same time a year ago. Terminal dwell for chassis is three days, and proportion of out-of-service chassis is 8 percent.   
    The fact that containers and chassis are not moving as quickly out of terminals or remaining off dock for longer periods of time could result in some shippers incurring higher detention and demurrage charges.
    December figures are not yet out, but Seroka said the Port of Los Angeles is expected to have handled more than 800,000 TEUs in each of the last six months of the year.
    “That’s never happened before,” he said. It represents an increase of about 5 percent over last year, which he said should be manageable, but “you are getting hit in a smaller (time) window, because of the tariff implications.”
   This despite the fact that that U.S. exports through Los Angeles and Long Beach to China is down 20 percent and down 22 percent for the country as a whole through October.
    That means fewer dual transactions at terminals where truckers both deliver and pick up a container at the same terminal.

LTL carriers don’t complain about driver shortage, nor do private carriers. The reason is pay, benefits and working conditions.

Drewry’s World Container Index, a composite of container freight rates on eight major routes to and from the U.S., Europe and Asia, was down 1.4% to $1,351.15 per 40-foot container as of June 13.

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Concerns aired over West Coast container dwell time

Concerns aired over West Coast container dwell time

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Warning issued about West Coast port congestion

Terminals being hit with heavy volumes because of tariffs at a time when many longshoremen are taking vacation.

Dec 19, 2018 on Dec 27, 2018AmericanShipper.com

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Warning issued about West Coast port congestion

Terminals being hit with heavy volumes because of tariffs at a time when many longshoremen are taking vacation.

Dec 19, 2018 on Dec 27, 2018AmericanShipper.com