I have been wanting to write an update on the West Coast ports for weeks now. We all have seen the Los Angeles/Long Beach terminals go from bad to horrendous these past few months. Various articles have been written about the following issues:
– The larger vessels that are taking longer (3-4 days) to unload a the terminals.
– The inability of various terminals to move and reposition containers within the terminals
– The lack of chassis or rather the inability to get chassis positioned where they are needed so that there are chassis shortages
– Containers that need to move to rail being stuck at the terminal for weeks
– When containers are finally available fore pickup, the terminals may or may not be waiving demurrage.
– The continued ILWU-PMA contract negotiation
On top of this, we are in the middle of the peak shipping season. It is a perfect storm of problems that is having a domino effect on container traffic around the United States. Congestion has gotten so bad that containers ships are now backed up for days at the port of Los Angeles and Long Beach. Many of the vessels that come to the port of Oakland stop off first at Los Angeles and Long Beach. In the past week or two, we’ve seen more and more of these vessels receive delayed arrival at the port of Oakland. We expect this phenomenon to continue as long as congestion continues in Los Angeles / Long Beach.
We continue to ask importers and exporters to be patient with truckers and understand that the terminal delays are not the fault of the trucker. Many truckers have been charging “port congestion” and/or “waiting time” fees as they are stuck at the terminal for hours at a time to pick up one container.
For those who export containers from the West Coast, the vessel delays lead to an additional problem regarding the timing of when empty containers can be picked up to be loaded and returned back to the terminal. Once an empty container is picked up, it has to be returned in a certain number of days. Once those days are exceeded, the carrier will charge detention charges for use of the container. However if a vessel is delayed and arrives at the port late, the carrier doesn’t want the container to be returned prior to a few days before vessel actual arrival. A container sitting too long at the port will also face storage charges. Therefore exporters can find themselves stuck with a container that they cannot hold on to as they will face detention charges and yet cannot return tot eh terminal too early as they will face demurrage charges.
Importers with shipments to inland locations as well as the U.S. East Coast are looking for any alternative besides shipping through Los Angeles / Long Beach. This will result in impacting the other ports across the United States. In the past year, we have already seen other U.S. ports face congestion issues due to the many of the same problems that Los Angeles/Long Beach is experiencing. As we move into the winter months, the possibility of weather delays becomes another big factor, especially for importers who try to move their containers through northern ports.
With no end in sight to the congestion problem, importers and exporters must remain very nimble with how they decide to handle and arrange their shipments. Importers should not be locked down to only one shipping route. All shippers should be continually looking for the least congested shipping routes.
Feel free to contact me if you have any questions.
tel: 650-873-9050 x1019