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Continue Port issue look to extend well into 2022.
LA-LB backlog will not clear until well into 2022, experts say
Michael Angell, Associate Editor | Dec 15, 2021 5:43PM EST
Despite efforts to clear out the landside of the US’ busiest import gateway, the ports of Los Angeles and Long Beach face a major challenge on the waterside with unloading, trucking, and railing out cargo from over 100 container ships that were scheduled to arrive through mid-December but are queueing in some cases more than 150 miles off the coast.
According to logistics experts, the current backlog of containers stemming from an historic import surge in the United States will take until mid-2022 to clear out.
Chris Chase, business development director for the Port of Los Angeles, told the audience at the Northeast Trade and Transportation Conference last week that the LA-LB ports are expected to handle 3 million more containers in 2021 than they did in 2020.
That total would be much higher, he said, if all the containers on ships that are currently at anchor or slow steaming further off the California coast were to be counted.
“This is different, this is an unrelenting flow of cargo,” Chase told the audience at the event, sponsored by the Coalition of New England Companies for Trade. “This unrelenting flow has changed how we do things and has implications up and down the supply chain.
“Every single piece of the supply chain has a responsibility to do something different, to try something different and new,” he added. “The status quo is not working.”
Chase said that a busy month for Los Angeles used to be when it handled about 800,000 containers. During 2021, the port has been handling over 900,000 on average per month, he said. The effect has been that its terminals are jammed, and container delivery has slowed.
“We were thrown a curveball that, even in any of our wildest dreams, we never predicted that these kinds of things would be happening with this kind of volume,” said Chase. Over 100 ships ‘backed up’
Despite efforts to clear out the landside of the US’ busiest import gateway, the ports of Los Angeles and Long Beach face a major challenge on the waterside with unloading, trucking, and railing out cargo from over 100 container ships that were scheduled to arrive through mid-December but are queueing in some cases more than 150 miles off the coast.
According to logistics experts, the current backlog of containers stemming from an historic import surge in the United States will take until mid-2022 to clear out.
Chris Chase, business development director for the Port of Los Angeles, told the audience at the Northeast Trade and Transportation Conference last week that the LA-LB ports are expected to handle 3 million more containers in 2021 than they did in 2020.
That total would be much higher, he said, if all the containers on ships that are currently at anchor or slow steaming further off the California coast were to be counted.
“This is different, this is an unrelenting flow of cargo,” Chase told the audience at the event, sponsored by the Coalition of New England Companies for Trade. “This unrelenting flow has changed how we do things and has implications up and down the supply chain.
“Every single piece of the supply chain has a responsibility to do something different, to try something different and new,” he added. “The status quo is not working.”
Chase said that a busy month for Los Angeles used to be when it handled about 800,000 containers. During 2021, the port has been handling over 900,000 on average per month, he said. The effect has been that its terminals are jammed, and container delivery has slowed.
“We were thrown a curveball that, even in any of our wildest dreams, we never predicted that these kinds of things would be happening with this kind of volume,” said Chase. Over 100 ships ‘backed up’
On Wednesday, the Marine Exchange of Southern California reported that 101 container ships are “backed up” outside the ports. Ships in that category were scheduled to arrive at the port prior to Dec. 15, according to the Marine Exchange’s new queuing system, which uses time of departure from the last port to estimate a time of arrival at Southern California.
The backlog number includes 30 vessels that have reported into one of the designated anchor or loitering points within 40 miles of the port. Although the exact number of containers carried is uncertain, those vessels account for some 170,000 TEU in capacity, according to data from the Marine Exchange.
According to Marine Exchange data, at least three of those vessels arrived at the port over two months ago.
The other 71 vessels are slow steaming in areas that must be no closer than 150 miles from the port because they lack an upcoming berth assignment. Those ships account for 640,700 TEU of vessel capacity. Along with those ships, another 35 are scheduled to arrive at LA-LB port through Dec. 28, according to Marine Exchange’s queuing system, with total reported capacity of 277,400 TEU.
The only metric that is going in the right direction currently is rail dwell, which Chase said was “looking pretty good right now.” But in terms of truck driver availability, chassis supply, and container dwell, the port is stretched and will remain so, he said.
“Velocity is terrible,” said Chase. “We have been crushed by velocity. We have a plan in place that we are so far off from that everything is a challenge.”
John Esborn, logistics director at e-commerce aggregator Perch, said that an ocean carrier source estimated that the current backlog would take over five months to clear out, and that is only if no more freight was booked in Asia.
As for the traditional Chinese New Year lull in shipping activity, he said that many importers are going to race to get ahead of the spring shipping season, adding another wave of freight to US ports.
“I don’t think there’s any slowdown in March, April, and May as people pull that inventory forward,” said Esborn.
Contact Michael Angell at michael.angell@ihsmarkit.com and follow him on Twitter at @michael_angell.
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Key Data :
NTD 27.3 to USD $ 1.00 - 11 year high
Brent Oil: $ 73.5 per barrel - 7 year high
In summary, with COVID still lingering, China's continuing lock down of key providence due to COVID. Labor shortage world wide. Expectation of further cost increase continue to add challenges to us all. We can focus on so many things that are wrong or we can choose to focus on what's right ! There are so many thing that are wonderous and bring joy to our life each day. We can show appreciation and be grateful for each day we arrive. Wishing you all a joyful and vibrant New 2022 !
With gratitude, The Synthetic Resources Team