Import volumes may have leveled off since the beginning of the year, but congestion at the Los Angeles-Long Beach port complex has steadily found new ground. Turn times, on average, are exceeding 100 minutes and over 50 percent of chassis equipment, while more available, is displaced causing extreme delays. A frustrated shipping industry, having rushed to import cargo at the beginning of the year to avoid U.S.-China trade war tariff escalation, now faces the same congestion problem from empty equipment exporting back across the Transpacific.
As the threat of tariffs drove importers to expedite spring inventories, carriers, operating across three major shipping alliances, deployed 34 extra-loader vessels to meet the demand; a move which has wreaked havoc at Los Angeles-Long Beach terminals and caused continued equipment imbalances. On the ground, truckers and equipment providers point fingers at terminal operators for cutting back on gate hours and longshoreman labor in order to save on costs. Meanwhile, terminals blame carriers for poorly-timed container return calls that flood gates with empties to fill outbound mega-vessels as 10,000-14,000 are simultaneously worked to discharge import loads for picked up, furthering confusion and congestion. This bulk drop-off and pick-up schedule leaves chassis equipment displaced, a problem the Lost Angeles-Long Beach port complex has not yet been able to address.
Making matters worse, empty containers means ocean carriers are losing money and will no doubt pass the cost along to importers later in the year. A key indicator for beneficial cargo owners (BCO), who have experienced rolled bookings at the expense of high spot market rates during peak season. And, with the addition of the low sulfur fuel mandate starting January 1, 2020, shippers should address cost concerns when negotiating contracts this coming April.
CARGO IMPACTED? AVOID L.A. DELAY WITH THESE 4 USEFUL TIPS:
- Pre-schedule: always issue delivery instructions in advance and build in multiple checkpoints to ensure your domestic trucker is secured.With free time limited at the port, you want to give drivers ample time to secure equipment and get your shipment outgated. Maintain reasonable expectations and understand that last-minute dispatching is not just not a viable option in the current market during 2-hour turn times.
- Alternative ports: with the widening of the Panama Canal, Asian cargoes have more direct access to East Coast ports. Consider comparing alternative port calls, especially for product continuing on to further inland destinations.
- Alternative modes: while airfreight alternatives may not be an international option, on average costing 8X more that ocean shipping, but consider splitting cargo across consolidations to alternative ports, or adding airfreight as a domestic leg if delayed shipments need urgent expedition.
- ASK: most importantly, talk to your forwarding partner! The more open you are about short- or long-term problems, the more likely there is a solution. Be sure to work with a partner that understands the freight market and is able to provide valuable decision-making insight to meet your goals.
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