 Patience tested: 62 ships at anchor in San Pedro Bay |
Source |
American Shipper |
Post Date |
03/04/2021 |
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Sixty-two vessels, including 20 container ships destined for the Port of Los Angeles, were at anchor in San Pedro Bay early Wednesday afternoon.
¡°If we do nothing, we will still have vessels at anchor come midsummer,¡± Port of LA Executive Director Gene Seroka said during a press conference Wednesday.
¡°Under normal conditions, we usually don¡¯t have any container ships at anchor. Before the import surge, we would see 10 to 12 container vessels at berth on a typical day here at the Port of LA. Today we are averaging north of 15 container ships being worked every day,¡± Seroka said. ¡°About 15% of vessels that currently are on their way to Los Angeles are going direct to berth. Of the 85% of ships going to anchor, the average wait time has been climbing. When ships first started backing up in November, anchorage time was about two and a half days. In February thus far, anchorage time is now tracking at eight days.¡±
The container terminals, trucking companies, rail and warehouses all are ¡°stretched thin,¡± he said.
¡°Container dwell time on terminals remains at about five days ¡ª or double what it was before the import surge started last summer. Street dwell time ¡ª waiting for warehouse space ¡ª is now at 7.6 days for a traditional 40-foot container,¡± Seroka said. ¡°We need to get back to about three and a half days of on-street dwell time, where it was holding pre-import surge.¡±
A number of factors have contributed to the San Pedro Bay congestion, he said.
¡°It¡¯s a pandemic-driven buying surge unlike one that we¡¯ve ever seen from the American consumer. Most of us are not sping money on services. We¡¯re not going to movies, taking airplane flights or going to ballgames. We¡¯re sping money on tangible goods. And that¡¯s what¡¯s really driving this unprecedented surge in imports.
¡°Because of COVID-19, not all of our workers are on deck every day. That too has an impact,¡± he continued.
COVID-19 has had a big impact at the port, with a major outbreak in the San Pedro Bay complex reported last month. Currently, the Port of LA has ¡°about 800 dockworkers off the job out of 15,000 due to COVID-related illness or otherwise being quarantined at this juncture. We need to get vaccines to these folks,¡± Seroka said.
¡°We are pleased that the vaccines are slowly starting to get into the arms of longshore workers,¡± he said, advocating for widespread vaccinations throughout the port community. ¡°There are 15,000 longshore men and women on the job and another 80,000 to 85,000 in the truck industry, electricians, retail warehousing and so many others, including our marine terminal operators, who work on our docks every day, and we need to get vaccines for all of them. The Port of Los Angeles is ready to assist with a mass vaccination site at our cruise terminal as supplies of the vaccine and inventories become available.¡±
Meanwhile, something¡¯s got to give.
¡°If we stopped all shipments right now, we¡¯d still have about a month¡¯s worth of work with those ships at anchor to get through the tem. So three things need to happen immediately. No. 1, we have got to get our workers vaccinated so we can have maximum capacity out on the job and the docks, the warehouses and our truck and rail community. Second, we¡¯ve got to implore our importers to do their very best at emptying these containers once they arrive, picking them up quickly and returning them back to the port area so we get that round-trip cycle going. And again, not very popular, but we¡¯ve already been in discussion with industry folks to see if we can meter cargo to help us dig out of this backlog. There have been several services that have been switched so far ¡ª temporarily ¡ª that will come back to us at Los Angeles, but we really need to catch our breath and go after this backlog of anchored ships with renewed enthusiasm.¡±
Metering cargo basically means sing it elsewhere.
¡°It¡¯s not a popular decision. It¡¯s a very difficult one. I am not an individual who wants to turn a pound of freight away from our port. But with 62 ships at anchor, we¡¯ve got to do something different, and all parts of the supply chain have a role to play in this,¡± Seroka said, pointing out that sing container ships to the Port of Oakland, for instance, ¡°will allow us a little bit of time to dig out.¡±
With the help of other gateways, the ocean carriers and the container terminals, the Port of LA is ¡°trying to chip away at this backlog and bring a level of certainty back to the port conveyance process,¡± he said.
¡°We will do everything we can to make sure that this [metering of cargo] is temporary, but the American economy has to keep moving,¡± Seroka said. ¡°We¡¯ll welcome these companies back to Los Angeles as soon as we all deem fit from a logistics arena.¡±
January volumes
The port director still was pleased with the amount of cargo handled in January. Seroka said the port moved 835,516 twenty-foot equivalent units (TEUs) in the month, a 3.6% increase compared to January 2020.
January imports totaled 437,609 TEUs, a 5.5% ¡°jump over last January, as American consumers have continued their unprecedented buying surge that started last summer and hasn¡¯t slowed yet,¡± he said.
Seroka said January exports totaled a ¡°dismal¡± 119,327 TEUs, a 19.5% decrease year-over-year.
¡°The primary causes continue to be American trade policy, China retaliatory tariffs [and] the value of the U.S. dollar,¡± he said.
The Port of LA moved 278,580 TEUs of empty containers in January, a 14.5% increase year-over-year.
¡°Once again, empty containers are more than double the amount of loaded exports on our docks,¡± Seroka said. ¡°These empty containers remain in very high demand in Asia, creating a push to hurriedly fill vessels with as many exports and empty containers as possible before returning them to Asia.¡±
He said 87 container ships berthed at the port in January. Seroka specifically used the word berthed because 22 vessels were at anchor Jan. 31 waiting to call.
Also of note in January were eight extra loaders to meet import demand in Asia and zero canceled sailings.
Port volumes remain strong in February, with a fore of 730,000 TEUs, a 34% jump year-over-year. ¡°But please remember that February through May 2020 we saw very low numbers as the impact of the pandemic hit China and then shortly after the U.S.,¡± Seroka said.
And Lunar New Year ¡°looks a lot different this year,¡± he said. ¡°A lot of factories stayed during the holiday. Some have called workers back from an abridged holiday setting. They¡¯re playing catch-up with orders too. ¡ It truly is a supply chain phenomenon. The manufacturers are behind on orders. We can¡¯t fill the shelves fast enough at our retail level.¡±
Seroka expects strong import volume throughout the first quarter and said the early fore for March is ¡°775,000 TEUs, which would be a 72% increase over 2020, when ¡ we hit the abyss and moved only 450,000 TEUs.¡±
Tools and incentives
Seroka provided a first look at the Control Tower, which is having a soft launch this week.
¡°The Control Tower, gleaned from the Port Optimizer data, is another service provided by the Port of Los Angeles to get critical information to San Pedro Bay stakeholders so they can make good decisions and improve efficiencies,¡± he said.
Seroka noted that the port introduced The Signal and the Return Signal within the past six months. ¡°The Control Tower will add to that catalog of data instruments for our customers,¡± he said. ¡°We are committed to the belief that reliable and accessible data produces efficiency at our port. We are the only port in North America currently offering this array of services, but I believe that will change. I¡¯m optimistic that this type of data will eventually be more uniform and available in every node of the supply chain.¡±
He added that the port launched a turn time and dual transaction incentive program Feb. 1. ¡°The port has invested $7.5 million to incentivize further efficiency on our terminals, rewarding stakeholders for better performance. With this program, terminal operators have two ways to earn financial reward ¡ª one for shortening the time it takes to process trucks ping off or pic
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