LA & LB: Anchored 9 (NM)* | Terminal 38 | Loitering 91 (NM)**
Oakland: Anchored 5 | Terminal 10 | Drifting/Loitering (NM) 6
NWSA: Anchored 1 | Terminal 7 | Drifting 5
Vessel Congestion Update
On January 19, 2022, the Southern California Marine Exchange (SCME) reported 97 total vessels in the twin ports of Los Angeles (LA) and Long Beach (LB). Of the vessels, 36 are container ships with 8 at anchor or loitering within 40 NM and 29 at berth. The LA Port Optimizer reports an estimated 103 container vessels are loitering/steaming toward the San Pedro Bay outside 150 NM**. The average number of days container vessels are waiting at anchor for a berth is 17.6 to 28 days.
Note: Nautical Mile (NM)
*Within 40 NM & **Outside 150 NM
LA/LB Import Container Dwell Fee – Extended by the Ports
On January 13, 2022, the LA harbor commissioners unanimously extended the dwell fee program until April 29, 2022, and amended the fee to provide import rail containers the same nine day cut off as truck bound containers. Therefore, with the updated policy, LA will have the authority to charge ocean carriers for each loaded import container lingering longer than nine days regardless of whether it is a rail or truckload movement. Dwell time has declined by 55-60% since October’s announcement of the fee and Seroka, Executive Port Director LA, is pleased with the progress and announced, “Implementation was postponed (making it the ninth postponement) and the data will continue to be monitored weekly and the fee assessment is delayed until January 21, 2022.”
As of January 14, 2021, the port of LB plans to delay implementation of the fee to January 21; however, it is unclear if the port will extend the program beyond its current expiration of January 31, 2022. On January 18, 2022, LB stated their dwell monitoring indicated a downturn of 47%. The port of Long Beach ended 2021 processing a 15.7% increase of containers with a record number of 9,384,368 twenty-foot equivalent units (TEU), while exports declined 2.6%. Empty containers moving through the port were up 27.5% to 3.3 million TEU (imports: 4.5 million / exports: 1.4 million). The significant increase is attributed to consumer spending habits during the COVID-19 pandemic, as demand for vacations, dining out, and entertainment declined due to health precautions with consumers pivoting towards spending on home office supplies, furniture, and exercise equipment.
National Retail Federation (NRF)
The NRF announced holiday sales, including e-commerce, jumped 14.1% during November and December, exceeding its forecast. Matthew Shaw, Chief Executive Officer, stated in part, “despite supply chain problems, rising inflation, labor shortages, and the omicron variant, retailers delivered a positive holiday experience to pandemic-fatigued consumers.”
Economic Concerns as Covid Omicron Variant Impact China’s Seaports and LA/LB Ports
Since the second week of January 2022, two areas of concern include: (1) a record high to date U.S. inflation rise of 7% and (2) some of China’s busiest and most important ports slowed or closed due to China’s COVID-zero restriction lock-down policy in their attempt to control the spread of the omicron variant.
A repeated glitch from last year may be occurring, which slowed down the Chinese supply chain. Again, shippers diverted/moved the slowed-down goods to Shanghai. Shanghai is repeating the delay of goods movement at the world’s largest and busiest container port. Last year in 2021, it was one cause and effect of the record-high number of container ships waiting off the coast of California, which has yet to be cleared.
An omicron outbreak and potential spread in China is of great concern if it is not contained. In recent weeks, the fast-spreading outbreaks of the omicron and delta variants have triggered shutdowns to clothing factories and gas deliveries around Ningbo as well as disruption at computer chip manufacturers in the locked-down city of Xi’an. Additional/expanded closures could be reported by China within days prior to traditional Chinese New Year’s scheduled for Jan 31 – Feb 15th, along with taking extra precautions for the scheduled Beijing Winter Olympic 2022 games scheduled Feb 4 – Feb 20th.
Bank economists are warning that Asia has yet to see a major wave of omicron, meaning the worst of the impact has yet arrived. In the U.S., an estimated 5 million workers stayed home sick or feared contamination and did not report to work last week. Shortages of supplies and food are also once again being experienced within some areas of the U.S.
An ILWU (International Longshore and Warehouse Union) representative announced in part, the LA/LB labor force has experienced omicron stricken employees which have prevented them from reporting to work. In addition, two safety/accidents occurred resulting in the death of two labor workers. Within a week’s time, a dock worker wearing earbuds was run over and an engineer performing work to extend the height capacity of a crane subsequently sustained an injury. Both incidents resulted in deaths. The circumstances have created a gloomy work atmosphere as union workers consider each other brothers.
Los Angeles Cargo Train Derailed
A train derailment occurred on January 15, 2022, in the Los Angeles area. Union Pacific announced a total of 17 cargo loaded cars derailed on January 16th and by the 17th an effort was underway to clear the tracks; however, as rail cars are often removed from the nearby LA/LB port terminals to avoid the on-dock dwell fee, they often linger on rail tracks for days/weeks. During such waiting periods, rail cars are subjected to theft. Thieves have been stealing cargo along the LA rail lines for months making off with goods and leaving debris behind. The ongoing, suspected package thieves have left boxes of stolen goods covering the tracks within the area of the derailment, however, it is not known if it was the cause of the derailment. Local newspapers reported the location is within an area where thieves left boxes of stolen goods covering the tracks from companies that included UPS and Amazon.
Please contact your Western Overseas representative with any questions.