Tag Archives: port management

Los Angeles imports slump further as congestion throttles volume

American Shipper has done a very nice article showing that LA/Long Beach is actually slowing down in throughput in the last two months or so. The graphs from their SONAR statistics show clearly that container processing is bottlenecked at those two ports.

It’s also true that both the port management at Los Angeles and Long Beach has emphasized the overall gains in 2021. But most of that was accomplished before the end of the year,and there has been a dramatic slowdown recently.

One issue that has only recently been mentioned is the large excess of empty containers at these two ports, waiting to be exported back to the Far East. These empties get in the way of unloading and loading real cargo.

Ocean carriers are recalcitrant about taking on the empties, as they don’t pay any fare. And it’s almost cheaper to build new containers in China for Chinese exported goods, than it would be to carry them back. So there is little economic incentive for those containers to be returned. And ocean carriers can’t be ordered to take them by any government.

One option for the ports of LA and Long Beach is to actually enforce fines per day on empty containers not taken by ocean carriers. These have been discussed previously and keep being passed on by the Port Boards.

Another option is for the Ports to declare that any empty container left in the port for more than some number of days will be scrapped for the steel, and the container owner charged for the cost of scrapping. The value of the sold metal could accrue to the port, or could be paid back to the original owner, according to the politics. I’d favor the port keeping the scrap money.

China has been accused of dumping steel in the US before. Now China is dumping fabricated steel in the form of containers. It’s not sustainable to have these boxes build up beyond a point where they interfere with import and export of real goods.

Greg Miller, Senior Editor Thursday, January 27, 2022

Los Angeles imports slump further as congestion throttles volume

Southern California: more records broken as vessels at-anchor reaches triple figures

Triple figures is worth reporting, even though we’ve been hearing about this problem for a long time now. And it seems no one will put up the money to do something about it.

Opening terminals to 24 hour operation would clearly improve things. It would not be a total solution, because the drayage trucks and warehouses, and container flows and availability, would still need to be coordinated. But it would be a start.

But 24 hour operation for terminals means more longshoremen and staff would need to be employed. Terminals will not be willing to hire these new longshoremen as union workers, because they don’t see a long-term need for them. When the rush abates, they can’t fire them readily.

It’s a similar story for drayage, though they have more flexibility, with the ability to use owner-operators if they can get them. But with the driver shortage, this kind of transport is one of the hardest hit– drayage carriers have been so ready to alter contracts for delivery and pickup of cargo and chassis that drivers don’t want to do this work. They’d rather be doing construction work.

The situation with warehouses is similar. Keeping a warehouse open for extended hours to be sure trucks can get in and out requires more staffing, and the firms don’t want to put out the money. Warehouse workers are often on 90-day contract time frames; many these days are supplied by temp agencies rather than the warehouse operator. The warehouse operator would need to commit to a much larger workforce, and on overtime at that, to handle extended hour deliveries.

I am starting to think it all comes down to businesses not wanting to extend their labor requirements. People don’t want to give work to people, or institutions and rgulations are now flexible enough to allow people to go to work and get the job done.

It’s more than just jawboning the port authorities, who have little to say about their terminals’ operations or labor practices, and almost no influence. Ports themselves have no leverage except as a contract for port spavce comes up for renewal. And most are nmany year contracts. That’s the dilemma of current port governance practice.

19 October 2021 Jack Donnelly Ports and Terminals, Shipping Lines

Southern California: more records broken as vessels at-anchor reaches triple figures – Port Technology International

OECD says shipping freight rates are driving G20 inflation

In case we didn’t notice it, shipping freight rate increases are the source of significant inflation throughout the 20 most developed countries. If you are complaining about inflation, point here.

The firms involved are passing the price rises on to consumers, resulting in higher prices. We may not be close to the end of the rises, either. We have not seen much to encourage a belief that the supply chain snafus will not continue and be disruptive for at least a year. No one seems to know what to do.

I fear even the choice of very large shippers to lease their own ships and avoid the traditional ocean container lines will not be all that easy. The extra ships will add to port delays, since they must load and unload just where the ocean shippers do. Ports are backed up, and also are running out of space for containers; and of course the driver shortage is preventing containers moving out fast.

Do we have to turn to rationing of scarce resources to get out of this dilemma, to make delivery predictable?

By Nick Savvides 13/10/2021

OECD says huge increases in shipping freight rates are driving G20 inflation – The Loadstar

Another source by Sam Chambers has some nice graphs: https://splash247.com/oecd-tracks-how-much-container-shippings-sky-high-freight-rates-are-contributing-to-global-inflation/