If you have been paying any attention to maritime shipping lately, you will know that the prices of shipping containers have skyrocketed and that shipping ports are congested causing all kinds of global delays and problems. Unfortunately, the congestion became worse in September with 73 container ships anchored or waiting off the port of Los Angeles and Long Beach with nowhere to berth.
The number of ships waiting to offload goods could go even higher than this peak in the coming months. While the number of anchorage points is limited, the space for ships to drift offshore is not—there is no limit.
Further, retailers and manufacturers are rushing to restock their inventories before the busy holiday season, but the shipping channels are struggling to keep up.
Limits at Ports
Southern California is acting as a narrow funnel—ships are pouring in from Asia and can only flow out of port due to anchorage limitations as well as limited warehouse space, trucks, and rails beyond the terminals. When the flow through the funnel is too much, (as it currently is) an overflow is created, causing ships to anchor or drift at sea.
The number of ships queuing in port is like a massive floating warehouse of shipping containers full of imported goods, limited only by U.S. consumer demand and shipping capacity.
The Ports of Los Angeles and Long Beach handle
around 40% of all container ships coming to the United States.
How Constrained is the Flow of Ships?
- Shipping container dwell time at Southern California shipping terminals = peak of 6 days, up from 5.3 in August.
- On dock rail time = 11.7 days, slightly below the peak of 13.4 days.
- Street dwell time outside of the terminal = 8.5 days, almost at the all-time high of 8.8 It was 8.3 days in August.
The constrained flow of ships through the Los Angeles/Long Beach port has risen and fallen during the pandemic but was at an all-time high of 100 container ships in September—more than five times the levels before COVID-19.
The one constant throughout this port congestion crisis is that the number of container ships at berths in Los Angeles and Long Beach has remained at around 27-32 ships a day; the amount that the landside can handle. Throughout the entire year of 2021, all ship arrivals in port over that threshold have overflowed into the drift areas and anchorages in the ocean.
Trans-Pacific Ship Deployments
Meanwhile, amid this heightened port congestion, more ships are flooding into Southern California ports than ever before. These extra ships that are not part of scheduled service are known as “extra loaders” and the ports handled 11 of these extra ships in August, causing further delays.
Deployed trans-Pacific ships capacity is up 30%.
Can these trans-Pacific ships be slowed down? The short answer is no. While slowing these ships down could give ports a little bit more time in between ships, a slow-down could back up the vessel supply chain even further and cause greater impacts to shipping schedules for liner companies.
Imports Are Down
Due to the higher number of ships waiting offshore, there is a bigger queue, which causes longer times for shipping container vessels to get to berths. In September, the average wait time for ships to reach berths in the port of Los Angeles was at a staggering nine days.
If we look back to August 2020, the import demand surged post-COVID lockdowns, and there were only a few ships at anchor off Southern California ports. This August, there were on average, 36 ships at anchor every day. In August, the Port of Los Angeles handled 485,672 twenty-foot shipping containers of imports—down 5.9% since this time last year.
In the last week of August, 26 ships were waiting for berths in Los Angeles with hundreds of thousands of TEUs (twenty-foot equivalent units) of cargo on board. Offloading these ships was pushed into September, just as delayed cargo from September will be pushed into this month (October).
What Could Stem the Tide of Cargo?
When port congestion in the first quarter peaked, it led to many canceled or “blanked” sailings during the second quarter. Earlier in the year, many ships were stuck at anchor in San Pedro Bay and could not make it back to Asia in time to be sent out again, forcing shipping liner companies to cancel voyages. Those cancellations pared-down California’s anchorage totals and port congestion in May and early June.
Yet again, carriers are beginning to blank or cancel sailings because of the heightened congestion in the ports of Southern California. Carriers have an incentive to blank sailings in other markets and redeploy their ships into the trans-Pacific where they can earn more money and top off rates with higher charges.
If the strong trans-Pacific demand continues, carriers may blank a few of their Asia-Europe sailings, and temporarily allow a few of those vessels to make a trip across the Pacific instead. Up to 50% of Asia-Middle East shipping services are being blanked because these vessels have been redeployed to the trans-Pacific where freight rates are at historic highs.
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We’d be happy to talk you through our current inventory and your options for your unique needs. If you are ready to think outside of the box ®, call our Tampa, FL based team at A American Container for a shipping container quote today; 813-740-1911!
Featured Image: BBC