The ports of Los Angeles and Long Beach, which together represent the busiest container gateway in North America, are struggling to clear a backlog caused by the rush of Chinese imports brought forward to beat new tariff deadlines set to be implemented on 2 March 2019.
“Ports in Southern California have been inundated by high volumes, causing congestion, limited storage space, equipment shortages, and slower container movements,” noted CMA CGM America.
According to APL, average container dwell time at the gateway has increased from 3 to 7 days. In a customer advisory, the carrier blamed “unprecedented” pre-Lunar New Year inbound volumes, which had created a “vicious cycle” encompassing a shortage of port labour, truckers, chassis, yard space and railcars.
“The congestion and added vessel calls are creating labour shortage at the West Coast terminals. Vessels generally have to wait two to three shifts after arrival before labour is available for operations,” explained a spokesperson for APL.
The carrier said this had caused a shortage of available truck capacity, creating “a challenge in getting truckers to take containers out of the terminals, or to timely return containers and chassis.”
APL noted the shortage of chassis has made it difficult for terminals to cope with the increased import volumes. Facing gridlock, terminal space is now “maxed out”, with some terminals refusing to accept empties from carriers as they “try to uncover buried containers that have not been collected for too long.”
Significantly for cargo owners, APL concluded its customer notice by emphasising that, “all applicable import detention and demurrage charges continue to apply.”
The congestion has been widely linked to the phenomenon of front-loading, whereby importers have brought forward shipments to beat impending tariff deadlines on Chinese goods. As it stands, the current set of tariffs will increase to 25% on 2 March.
West coast port volumes appear to support the anecdotal evidence of large scale front-loading, particularly in the later stages of 2018. The port of Los Angeles, for example, reported its highest ever throughput last year with 9,458,749 TEU, up 1.2% on 2017, with imports increasing 22% in December.
Furthermore, according to Alphaliner, total US imports from Asia reached a new record of 1.5 million TEU in December, of which China accounted for 72%.
Adding to the front-loading congestion is the usual rush in the lead up to the Lunar New Year, and the ongoing government shutdown and subsequent shortage of Customs and Border Protection officers.
Steve Fodor, director at Association for Trade Compliance, said customs had done a “good job to keep the clearance process flowing” but added that staffing issues at the USDA (United States Department of Agriculture) and FDA (Food and Drug Administration) “can mean longer clearance times for shipments where those agencies are involved”.
APM Terminals (APMT), which operates the busy Pier 400 facility at Los Angeles, said current events had created a “perfect storm” for port operations.
“The challenge has been handling all that extra volume at once,” APMT spokesman Tom Boyd told FreightWaves. “It’s been busy ever since Thanksgiving.”
The congestion is expected to last until shipping lines reduce vessel departures from Asia during Lunar New Year.