Date: Thursday, November 18, 2021
Source: Supply Chain Dive
Shipping lines and marine terminal operators are being encouraged to receive as many empties as possible to make space for loaded cargo. First, it was operating hours at warehouses. Then, it was chassis and yard space. Now, empty containers are getting a moment in the sun as a key bottleneck to resolve before port congestion can ease at the San Pedro Bay.
And for good reason.
If a yard is full with empty containers destined for export, there is no space to unload an import. And if there is no space for new containers at marine terminals, drayage providers cannot return empty boxes after a delivery, leaving a chassis stuck.
Private stakeholders are taking action to work with the port and ease the number of empty containers on dock, Gene Seroka, executive director at the Port of Los Angeles, said during a media briefing Tuesday.
"We've got about 65,000 empty container units sitting on the docks right now," said Seroka. Clearing these can help "speed our imports to market," and the "propensity is there" to do just that based on recent conversations among port stakeholders.
Ever since the shift to 24/7 supply chains was announced by President Joe Biden, port stakeholders at both the Port of Los Angeles and Port of Long Beach have been meeting multiple times a week to discuss practical ways to clear the congestion. This week, port representatives pushed for moves to clear empty containers from yards.
"We’ve asked all terminals and shipping lines to open up and accept as many empties as possible," Phillip Sanfield, director of media relations at the Port of Los Angeles, said in an email. "We can’t require it but we are strongly encouraging it."
As private companies, marine terminal operators have no obligation to receive empty containers. Often, the incentive is economic: Terminals need business from ships, and shipping lines prefer when their vessels are full on the return trip. Empty containers play a key role in this equation, filling up slots on ships while also ensuring shippers in export countries like China have containers to fill when they need them.
The Port of Los Angeles alone helps reposition 90,000 empty containers on an average week, according to Seroka. But this year has been different. The port is receiving 30% more empty containers, and they're not moving out as quickly as they come in.
"We've got to double our efforts to get these empties out and back to Asia to preposition those assets for the next round of imports. But this is where it becomes a math problem," Seroka said, before touching on various discreet ways the port was pushing to help clear empty containers.
Matt Schrap, CEO of the Harbor Trucking Association, has long advocated for more actions to clear empty containers from docks. Recent actions to clear cargo by adding space "has made a dent to an extent," he said, but they remain temporary actions until more ships come in to pick up the empty boxes.
In emailed statements to Supply Chain Dive, Hapag-Lloyd and ONE said they consider empty container returns as part of their vessel schedules.
"We from time to time deploy extra loaders with the purpose to clear empties from LA/LGB and we do the same on the [East Coast] for New York," said Tim Seifert, director of corporate communications at Hapag-Lloyd.
Although evacuating empties may free up space, not all shippers advocate for these containers to be prioritized. Agriculture exporters in particular need slots on vessels to ship goods across the Pacific, and send full containers to port for transport. Shipping lines, as a result, play a delicate balance when filling up their ships.
"We are maximizing the evacuation volume (regardless of laden and empty) from LA/LB to ease the terminal congestion situation with multiple actions and activities," Shiori Harada, a spokesperson for ONE said in an email.
Having more ships come to port, more terminals accept empty containers and more space to store slow-moving cargo could help the situation, said Schrap. But the "devil will be in the details here, as the old saying goes."
To clear empty containers from docks, the boxes need to be positioned in the correct terminal when the ship comes, Schrap said. Some marine terminals have been "very proactive" in trying to free up chassis, which is welcome. But the reality, according to Schrap, is that not all terminals service the sweeper vessels.
And often, ships that come in to pick up empty containers are full with loaded ones when they arrive. "Every loaded eventually becomes an empty," said Schrap.