LA & LB: Anchored 61 | Terminal 27
Oakland: Anchored (nil) | Terminal 5 | Drifting 6
NWSA: Anchored 3 | Terminal 7 | Drifting 16
Vessel Congestion Update
On October 13, 2021, the Marine Exchange of Southern California reported a total of 138 ships in the port complex of Los Angeles (LA) and Long Beach (LB). Of the 138 vessels, 86 are container ships with 56 at anchorage or drift and 21 at a holding area. It is estimated that half a million cargo containers are waiting outside the ports to be unloaded, and container vessels are waiting for an average of 9.4-12.5 days (about 2 weeks) to reach a terminal to unload the containers.
Port of LA/LB – Increased Gate Hours
The Port of Los Angeles expanded operations and has added new nighttime shifts and weekend hours. It should allow for nearly doubling the hours that cargo will be available to move out of the port. Gene Seroka, Executive Director, Port of LA stated: “The port facilities have extended its operating hours and added another 1,000 workers in an effort to keep pace with the heavy flow of merchandise. We’re having difficulty absorbing all of this cargo into the U.S. supply chain, and U.S. importers are sitting on cargo longer than ever here at the Port of Los Angeles.” The port launched the pilot program Accelerate Cargo LA, which is designed to ensure gate availability meets cargo demands and marine terminals incentivize the use of all available gate hours in particular the use of night gates to help reduce congestion.”
Mario Cordero, Executive Director Port of Long Beach, stated in part: “We are in the midst of a historic surge in cargo, and our terminal operators and other supply chain partners are giving their all to keep it moving. We encourage cargo owners and trucking partners to give the extended gate hour program a try.” Bill Peratt, CEO of TTI Terminal at Pier T stated, “If we can increase utilization of our late-night gates, we can better serve the supply chain and help speed cargo to market. By making it more convenient during less congested time frames for truckers, we are optimistic these steps can reduce the dwell time at TTI.”
The International Longshore and Warehouse Union (ILWU) has announced its members are willing to work the extra shifts that can add needed capacity to realize clearing existing backlogs. The ILWU further advised that it is the private businesses within the supply chain that need to move their operations 24/7.
Biden Administration Effort
To address bottlenecks at the Ports of LA/LB, the Biden Administration is taking steps to move goods from ship to shelf more quickly. Pete Buttigieg, U.S. Secretary of the Department of Transportation, and John Porcari, Port Envoy, held meetings and worked with major stakeholders to encourage the utilization of the expanded gate hours. The Biden Administration remains hopeful more businesses will access and utilize the extended gate hours. As a result of the round table held on October 13, 2021, six large companies have announced they will use the expanded hours to move more cargo off the docks so ships can come to shore faster.
Commitments from Walmart, the nation’s largest retailer, projects increasing throughput by as much as 50% over the next several weeks. UPS is committing to increased use of 24/7 operations and will use enhanced data sharing with the ports, which could allow UPS to increase container pickups by 20%. Fed Ex will commit to increasing their nighttime hours with changes to trucking and rail use to increase the volume of containers it moves from the ports. Once the Fed Ex changes are in place, they plan to double the volume currently moved out of the ports at night. Home Depot will commit to moving up to 10% additional containers during the next 90 days. Samsung committed to moving nearly 60% more containers by operating 24/7 through the next 90 days. Target, which currently moves about 50% of its containers at night, has committed to increasing the amount by 10% during the next 90 days. The six companies mentioned above anticipate moving 3,500 additional containers per week at night through the end of the year. The adjustment of hours can easily help ease the congestion at the ports.
The effort being taken is part of the Biden-Harris Supply Chain Disruptions Task Force which will continue to identify emerging bottlenecks affecting the U.S. economic recovery and will take action to help families, workers, and businesses receive needed goods and supplies. The focus for importers agreeing to handle cargo 24/7 is viable, and while this is a new concept in the U.S. it is not new in other countries. Buttigieg and Porcari indicated they will continue to work with all stakeholders to help more businesses access these expanded hours and to also move the rest of the supply chain towards a 24/7 operation.
Congestion at the LA-LB Port complex has drawn global attention as the scope of the problem is touching every corner of the supply chain. This includes ships arriving at the ports as well as trucks and trains that carry the containers nationwide to warehouses storing the goods. Experts continue to warn of holiday shortages. The cargo surge is expected to continue well into the summer of 2022, however, port officials are optimistic congestion and backlogs could be eliminated sooner.
Port of Savannah
Two major carriers will divert container ships from the Port of Savannah. Hapag-Lloyd and CMA CGM announced two services will temporarily bypass Savannah. The port is currently facing severe congestion as it experiences an 8-to-10-day delay to accommodate container vessels. Carriers seek to protect their schedule integrity and weekly sailing frequency and are taking the following actions.
Please contact your Western Overseas representative with any questions.