Unsurprisingly, the Port Authority of Los Angeles/Long Beach announced that it will once again postpone the collection of long-term container detention fees until December 27. This is the sixth time the fee has been postponed, suggesting the incentive is helping reduce container backlogs at ports.
However, the Port of Los Angeles has raised concerns about charges for empty containers clogging its terminals.
Nearly 70,000 empty containers are stranded at the terminal, and charges may be considered
Gene Seroka, executive director of the Port of Los Angeles, said last week that 60% of empty containers have been sitting at Los Angeles terminals for nine days or more, leading to a backlog of nearly 71,000 empty containers.
“We are imploring liner shipping companies to bring in more and larger sweepers to clear these empty containers,” he said. “We will be looking at alternatives, including levying fees on liner companies that hold empty containers at our marine terminals for extended periods of time.” ”
The number of empty containers at the port has been steadily rising, causing congestion in terminal yards. As of the end of November, the figure was 11% higher than a year ago.
The port authority said the long-term container detention fee has significantly reduced the number of containers held long-term at the Port of Los Angeles/Long Beach.
Since the tolling plan was announced, total container volume has decreased by 46%. In light of these improvements, they have been delaying the charges.
But the Port of Los Angeles is considering charging fees for the backlog of empty containers at the port. Aside from a brief respite during the Lunar New Year holiday, pressure on ports is not expected to ease for several months.
Seroka also warned last week that U.S. imports would remain high into February and then increase again after the holidays as retailers replenish depleted inventories.
As ports continue to operate over capacity and warehouses remain packed with cargo, the pressure on terminals from long-stranded loaded and empty containers seems unlikely to ease.
Escape from Los Angeles, more container business flees to East Coast
According to statistics, U.S. import data in November showed that container imports at major ports on the U.S. West Coast fell by 7.5% year-on-year. By comparison, imports from U.S. East Coast and Gulf Coast ports increased 9.9%.
Shippers and carriers are indeed avoiding the Port of Los Angeles/Long Beach given the storage and transshipment capacity of the Southern California ports.
In the ongoing battle for Asian imports between the West and East Coasts, momentum is once again shifting towards Eastern ports.
“The performance of West Coast and East Coast/Gulf Coast ports has become increasingly divergent, with November marking the sixth consecutive month in which the latter performed significantly better,” consultant John McCown wrote in the latest issue of McCown Container Volume Observer. ”
“I can’t name a specific company, but I can tell you that a company with a large facility on the West Coast typically calls at Los Angeles/Long Beach,” he said in response to a question about port rotation and the possibility of avoiding congestion in Los Angeles/Long Beach. The port has now moved to Houston and established a transshipment center there.”
“You’re seeing more opportunities on the East Coast (and the Gulf of Mexico) right now,” Monroe said. “I think a lot of people will be adjusting service networks and trying to move more facilities and inbound containers to ports outside of Southern California. ”
Carriers and shippers alike are taking action.
An example: MSC Santana service formerly sailed from Asia to Tacoma.
In November, MSC moved the service to the East Coast, from Asia to Charleston and New York via the Panama Canal. Santana’s services will add calls to the Port of Houston starting next month. The new rotation arrangement is as follows: Haiphong-Shanghai-Ningbo-Houston-Charleston-New York-Haifang.
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