Port congestion finally eliminated

Gone is the huge cargo ship standoff at the San Pedro Bay port complex, an abhorrent example of the country’s supply chain woes.

Yet one reason to clear the traffic isn’t great: Ships from Asia have increasingly bypassed the ports of Los Angeles and Long Beach in recent months, partly to avoid port congestion and partly because of concerns about possible labor question.

“Shippers are moving more cargo through the East and the Gulf Coast,” said Gene Seroka, executive director of the Port of Los Angeles. “It’s likely to continue until the West Coast labor contracts are in place, and it’s not going to happen anytime soon.”


Whether the cargo will return in the future is an open question, but for now port officials are happy that the cargo jam has cleared.
“We’ve had an amazing recovery from what we were like in the summer of 2020,” said Mario Cordero, executive director of the Port of Long Beach. “In this case, I guess I’d speculate that our container traffic here is going normalization.”

To be clear, cargoes handled at ports are still near record highs, even as they gradually decline from their peaks.

In September, the Port of Los Angeles handled 709,873 20-foot-equivalent units — based on the capacity of a 20-foot-long container and the typical (if inaccurate) measurement of the volume of a cargo container called a TEU — representing a 21% decline . last September. These included 343,462 import TEUs (down 27% from September last year), 288,731 empty TEUs (down 20%) and 77,680 export TEUs (up 2.5%).

The Port of Los Angeles had handled more than 7.86 million TEUs through September, down 4 percent from nearly 8.18 million TEUs a year earlier. In 2021, the Port of Los Angeles handled a total of 10.7 million TEUs.

“While we expect volumes to decline in the fourth quarter, the Port of Los Angeles is on track for its second-highest throughput ever,” Seroka said in a media briefing on the October figures.

Meanwhile, the Port of Long Beach handled 741,823 TEUs in September, down 0.9% from 748,472 TEUs in September last year.
Having said that, Cordero said the slight downturn was in line with expectations.

“It’s not surprising. It’s the expected outcome,” he said, adding that exports to the U.S. from China, the largest supplier of goods on the West Coast, fell 13 percent in October. “It’s a global scenario in terms of slowing growth. When you look at China … it’s not surprising.”

Seroka noted that August was the first slowdown in cargo at the Port of Los Angeles after 25 months of “record import volumes,” adding that the usual peak of holiday season cargoes occurred earlier this year, in June and July. . A lot of holiday merchandise has arrived,” he said. “Traditionally, September is a high-volume month for year-end merchandise. “

Containers stacked in the Port of Los Angeles. California, Wednesday, November 9, 2022.  (Photo by Zhao Linge)
Cargo movement at the Port of Los Angeles was smooth and there was no backlog of ships, which has been common for the past two years.

labor pains

Seroka added that at his briefing, 34 ships were heading to Los Angeles, down from the typical mid-40s. One reason for this — Asian shippers are shipping elsewhere in the U.S. — is at least partly related to one of the reasons for the earlier peak: ongoing labor negotiations with West Coast dockworkers.

The Dockers’ contracts expired on July 1 and they have been out of contract since then. They had previously declined a one-year extension. No strike was declared. The port complex has a long history of strikes and industrial conflicts that have caused significant delays.

Seroka said the slowdown in traffic is likely to persist until a labor agreement is signed.
Matt Schrap, executive director of the Port Freight Association, said more shippers from Asia have sent cargo to ports such as New York-New Jersey; Charleston, South Carolina; Savannah, Georgia; and Houston. While those ports don’t necessarily have the same capacity as Los Angeles and Long Beach, shippers prefer to avoid the possibility of striking workers blocking deliveries.

“Shippers are hesitant to put too much cargo into L.A./Long Beach until the contract is finalized,” said Schrap, whose group advocates for the interests of trucking companies and their drivers.

Greater efficiency also played a role in ending the backlog.
After battling past standoffs, cargo ships now arrive largely sorted to avoid crowding the coastline. As the vessel approaches its scheduled discharge time, the vessel is pulled closer, essentially on a tiered basis. This saves time.

Ships within 150 nautical miles of the port peaked at 109 in January; in Seroka’s briefing, there were only six.

Shippers are moving more cargo through the East and the Gulf Coast.
-Gene Seroka
port of los angeles

“In general, inbound ships will berth soon,” Seroka said.
If or on November 9, there are no ships waiting within 40 nautical miles of the port complex. Six ships sailed to the complex within 150 nautical miles, with three heading to the ports of Los Angeles and Long Beach.

Unloaded cargo also leaves the port faster, although there is still room for improvement there. Terminals at the Port of Los Angeles still had about 41,000 import containers in October, less than half of the peak imports a year ago, Seroka noted. However, lack of warehouse space has resulted in delays in container pickup, with the average on-street time being 10 days instead of four, Seroka said.

faster processing

Long Beach’s Cordero praised the port’s ability to handle incoming shipments. He has the numbers to back it up: During the year, its volume through three quarters – 7.34 million TEUs – was actually higher than last year’s 7.09 million TEUs.

“We are very good at offloading ships from Asia,” he said. “We do it 24/7. We’re very good at it.”
Schlapp expressed support for the new queuing system, which he suspects will keep shippers here long-term, rather than commit to other avenues.

“You’re talking about 25, 35 ships parked at those (other) ports waiting for vacancies, and in Los Angeles/Long Beach, we don’t have that problem,” Schlapp said. “We’re never going to see that many ships berthed, partly because of the queuing system, but also because we’re seeing those numbers decrease partly because of diversion and a little bit of softness in consumer spending.”

This relatively manageable timing of cargo imports presents an opportunity to avoid a backlog of ships, or at least lessen its severity when the next crisis strikes.

Part of the reason has to do with what happens when the container comes ashore. As far as truckers are concerned, Schlapp said they will have to adapt next year when new standards force trucks with 2007-09 engine models out of service at ports. In this case, he said, there has been a bull market for new trucks.

Enforcement of Parliamentary Act 5, which severely restricts who is eligible to be an independent contractor, could also hinder efficiency gains.

“In a way, do we want to see volumes come back? Yes, but one of the things that has been caused by the supply chain crisis is that it highlights a lot of local inefficiencies,” Schlapp said. “All of these things are really coming to the fore. Now, in this downturn, we’re working with our partners to address some of the challenges we’ve seen when spam hits fans. Now, with the numbers down, we have Opportunity to help address and remedy some of the challenges we had before.”

Now that breathing space can help everyone involved in freight, Cordero said.

“I think it’s important for us, at least at this point, to continue to learn from the bottlenecks and congestion we’ve experienced due to the Covid-19 pandemic,” he said, adding that in order to maximize productivity, They have to maximize the operating hours of the port.

Source link