Southern California Terminal Congestion Deteriorates – Congestion at the Southern California port complex has been a growing problem since the import surge started in earnest back in June. The situation has gotten significantly worse since reported last month and further deterioration is expected as vessels are forecasted to load at full capacity up to the China Golden Week Holiday. Extra-loader vessels that sailed in October to help ease capacity shortfalls in Asia were mainly deployed to the Southern California gateway port system. These extra vessels have been arriving over the last several weeks and are now pushing terminals to the brink.
Multiple terminals are reporting severe congestion with extended wait times for truckers entering most terminals. Dray carriers are advising that, even with confirmed appointments, it is taking several hours to pick up laden containers from the Southern California port complex. The lack of available chassis is one of the major factors contributing to the long delays. Dray carriers are frequently rejecting deliver orders based on which terminals are experiencing the worst congestion. APM & WBCT terminals are being particularly hard hit right now, with some dray carriers charging a premium for acceptance of delivery orders or rejecting the delivery order all together! Unfortunately, congestion is likely to get worse over the next several weeks and shippers should anticipate further delays along with an increase in accessorial costs.
Accessorial Surcharges Spike – Dray carriers are implementing terminal wait time and surge charges due to the limited amount of deliveries that can be performed on a weekly basis. Many of the international container drivers that are employed by dray companies are “owner operators” and are not paid hourly but based on the number of deliveries accomplished per week. To make up for the load shortfall, dray carriers have no choice but to implement additional surcharges to keep the drivers from abandoning delivery orders. The long lines to enter the terminals along with lack of chassis will ultimately result in demurrage accrual. Terminals and ocean carriers are reluctant to extend port storage free time as this would only cause additional congestion. Therefore, we expect to see no relief granted on demurrage charges and recommend working with your logistics providers to expedite your freight and minimize accessorial charges during these difficult market conditions.
Rail Intermodal Delays – We are seeing dwell times for inland points on the rise again with some destinations experiencing extremely long delays. The Southern California gateway is particularly hard hit since the majority of extra loader and high capacity vessels continue to arrive fully laden with containers. We unfortunately expect no relief through the short-term as booking forecasts remain extremely strong and several ocean carriers have extra loader vessels departing China in November, with the majority discharging in Southern California.
Ocean Carrier File Congestion Surcharges – Two ocean carriers have now filed congestion related surcharges and others are likely to follow. ZIM Lines announced a $250 per container congestion charge on 40’ standard and 40’HC containers. Their Equipment Imbalance Surcharge (EIS) goes into effect on December 4th for all imports into North America. Hyundai announced a $350 per container Emergency intermodal Surcharge (EIT) for all cargo discharging in Southern California for local delivery and rail intermodal containers. The effective date for Hyundai’s EIT is December 9th 2020.
Terminal Congestion Causing Vessel Berthing Delays – Vessels are beginning to back up off the coast of Southern California as the growing terminal congestion prevents timely discharge of containers. The berthing delays are just starting and we will closely monitor, stay tuned.
Please contact Brian Martorano, National Director of Business Development Ocean Import or your local sales representative for additional information and service options during these challenging times on the Transpacific. Additional information can also be found on laufer.com and on our Laufer INSIGHTS page.