San Pedro Bay congestion recedes to Christmas Eve level

Date: Wednesday, March 17, 2021
Source: Freightwaves

The number of container ships at anchor in San Pedro Bay has dropped by more than half since the 40 waiting to berth at either the port of Los Angeles or Long Beach on Feb. 1.

Seventeen container vessels were at anchor late Tuesday morning, with 10 destined for the Port of LA, according to Executive Director Gene Seroka.

“That is the fewest container ships at anchor outside the Port of LA since Dec. 24, when there were also 10 container ships resting outside,” Seroka said, noting another 18 container vessels are scheduled to arrive at the port over the next five days.

The average time at anchor in February was 7.5 days, “about the same that it was in January,” Seroka said during a press conference Tuesday.

“Container dwell time on terminals is sitting right now at 4.1 days, down from five days I reported last month,” he said. “Street dwell time — the wait for warehouse space — is now at 6.3 days for a 40-foot container, down from the 7.6 days reported a month ago. We need to cut both the terminal and street dwell times to the pre-pandemic level, then pick up the work our competitiveness team started to improve efficiencies even further.”

The Port of LA was able to ease some of the bay congestion while still setting a February record — 799,315 twenty-foot equivalent units (TEUs), a 47% year-over-year jump and the most for the second month of the calendar year in the gateway’s 114-year history.

During February, 78 container ships, including four extra loaders, berthed at the Port of LA and the month ended with 23 vessels, representing about 250,000 TEUs, at anchor.

Imports in February totaled 412,884 TEUs, up 53% from 270,025 TEUs last year. “Consumer buying has not let up,” Seroka said. Exports, however, totaled a “paltry” 101,208 TEUs, a 25% decrease from February 2020.

“The last time the Port of Los Angeles was under 100,000 TEUs was in February of 2006, 15 years ago,” he said. “The ratio of loaded imports to exports reached 4-to-1 in the month, one of the highest levels we’ve seen at the Port of Los Angeles. Exports have now dropped 26 of the last 28 months here in Los Angeles, and it’s an issue that is not going away anytime soon.”

Seroka said the number of empty containers was “yet another indicator” of the export problem.

“Those empties at 285,000-plus TEUs in February were a 104% increase — more than double compared to a year ago. And empties were nearly triple the amount of loaded exports that left our docks. The lopsided trade imbalance we are witnessing is now at historic levels. We need a coordinated export plan on a national level that will create American jobs and assist U.S. companies in getting back in touch with their customers overseas. More balanced trade will also improve the round-trip economics of service providers and ease the strain that we’re seeing today in so many nodes of the supply chain,” Seroka said.

After only two months of the year, the Port of LA is tracking 21.1% above last year’s volume, he said. “But year-on-year comparisons are very difficult when looking at the dramatic swings that we witnessed last year. Comparing January and February 2021 to a more stable calendar year 2019 shows an increase of 5% in our cargo volume.”

Seroka acknowledged there is still much work to be done to get back to pre-pandemic cargo flows.

“In our efforts to clear the backlog, here’s what needs to be done. First, vaccinate the entire waterfront workforce, including but not limited to dockworkers, truckers, as well as terminal and warehouse workers. Second, we need to get the cargo off the docks and picked up quickly by our import community. We’ve had many discussions in this area. We’ll continue to do so. And third, we need to manage the increased cargo flow with efficiency tools. We need to share this data specifically across our port community system, employ a deep reservation system for truck movement and broadly segment cargo to increase gate fluidity,” he said.

March volume is expected to be even higher than February, with 830,000 TEUs forecast, a “projected increase of more than 80% compared to when we looked into the abyss of last March and failed to reach 450,000 container units,” Seroka said, adding that strong import numbers are expected to continue into early summer.

“We’re going to have to make a quick pivot in the summertime” before the traditional import uptick begins again about Aug. 1, he said.

During the question-and-answer portion of Tuesday’s press conference, Seroka said some shipping lines have pivoted and diverted vessels to other ports during the congestion crisis.

“There were a couple of carriers that made some pretty big announcements — Hapag-Lloyd rearranging 11 sailings, CMA CGM moving an expedited service to Oakland and another Southeast Asia service up to the Pacific Northwest. But all ports in the country of east-west significance are very full right now. We’ve seen the reports on anchorage out of Oakland and the cut and runs out of Seattle-Tacoma, the anchorage in the Southeast.

“So it’s not very easy and I explained this to a number of folks early on that we were going to pull every lever we could and if diverting temporarily some cargo to allow us to catch our breath was the plan, albeit an unpopular one, I was willing to take that opportunity because we could not slow down the American supply chain. But our options are very limited,” Seroka said, pointing out with the ports of LA and Long Beach combined handling 17.5 million TEUs annually, “there are not too many other places that can take big swaths of cargo.”

He said there are opportunities for improvement, including the segmenting of the one-third of the international container business destined for the Inland Empire of Southern California and moving that in off-hours.

“We’re seeing the conversation develop around what can we do to improve the efficiencies, especially when we’re at record — historic — cargo levels. No port in the history of the Western Hemisphere has moved an average of 900,000 container units for seven consecutive months,” Seroka said.

And conversations will continue over all those containers sent back to Asia empty.

“There are containers available. But what we’ve seen is a rush to get those empties back to the manufacturing site for import back to the U.S. We’ve got to find an equilibrium or a happy medium. Much has been made in the recent weeks and months from the agriculture community and some in the manufacturing sector as well, and we know there is added transit time on the front end to pick up those goods and added on the delivery side in Asia to get them to the buyer. But we’ve got to find a happy medium because it’s going to put people to work, it’s going to help balance our trade a little better,” Seroka said.

“With every export container we get, we can help the asset provider and the staffing levels become a little bit better attuned to those round-trip economics that we’re all searching for. So it’ll be a continued conversation within the industry,” he said. “There is oversight and requests out to the Federal Maritime Commission for investigation and a look-see at what’s happening on the ground, but we need action now. We need to continue to work as leaders in the industry to help the American exporter.”



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