Supply Chain Council of European Union | Scceu.org
Transportation

Container shippers face delays at Los Angeles, Long Beach ports amid record volumes

Container ships could face further delays at the Ports of Los Angeles and Long Beach in the weeks ahead as the ports struggle to handle record volumes while also maintaining safe working conditions, market sources said on Oct. 7.

The Port of Long Beach had an all-time high throughput of 753,081 twenty-foot equivalent units, or TEUs, in July before slightly easing to 725,610 TEUs in August, still up more than 9% year on year. Some of those volumes were displaced to the adjacent Port of Los Angeles, which posted its own all-time high volume at 961,833 TEUs in August.
The record volumes compelled some shipowners to switch around their scheduled terminal berths between the two ports depending on which was less congested.

But amid the influx of cargoes shipped ahead of China’s Golden Week holiday ending Oct. 7, shipowners may have little alternative but to accept delays at North America’s two largest ports until volumes begin to taper off.

“What we are hearing is that it is only going to get worse. There are weather delays, missed berthing windows and will have more huge sweeper vessels coming in at the ports as well,” a US-based freight forwarder said.

“Vessels can’t get unloaded fast enough and reliability is getting tough, putting the whole supply chain under pressure.”

The freight forwarder said the congestion at the two Southern California container ports is even worse than the crunch in 2018, when shippers scrambled to get ahead of new US import tariffs on Chinese goods.

The ports, which handle about 37% of all waterborne US imports and more than 60% of cargoes coming from China, have had to deploy about a third fewer longshoremen and other workers to maintain social distancing protocols during the coronavirus pandemic.

RATES PLATEAU
But shippers facing demurrage charges and trucking stop-off fees as a result of delays might at least not incur higher container freight rates through the end of the year, a North Asian shipowner said.

Shipping lines including Maersk, Cosco and Hapag-Lloyd withdrew or deferred their proposed General Rate Increases, or GRIs, for the start of October.

“If cargoes are getting stuck at the terminals, that could impact costs for shippers but I don’t see rates going any higher from here,” the North Asian shipowner said. “If rates stay where they are, carriers will be very happy but they could also start to decrease as things return to normal.”

Platts Container Rate 13 — North Asia to West Coast North America — was assessed by S&P Global Platts on Oct. 7 at $3,800/FEU, the highest level since the assessment was launched in 2017.
Source: Platts

Related posts

Disciplined capacity management by carriers keeps freight rates in line

scceu

FedEx CEO challenges the New York Times to debate tax policy

scceu

Hurricane Douglas still on track to hit Hawaii (with forecast video)

scceu

Leave a Comment