LA & LB: Anchored 28 | Terminal 16 | Loitering 74*
Oakland: Anchored 5 | Terminal 6 | Drifting/Loitering 1
NWSA: Anchored 2 | Terminal 4 | Drifting 4
Vessel Congestion Update
On December 16, 2021, the Southern California Marine Exchange reported 102 container vessels destined for the ports of Los Angeles (LA) and Long Beach (LB). Of the 102 container vessels, 28 vessels were anchored or loitering within 40 miles of the in-port zone, and 74 vessels were loitering or anchored outside the 150 mile safety air emissions exclusion zone referred to as SAQA (Safety & Air Quality Area). Normally within a daily range, there are 26-31 container vessels at a terminal within the twin ports of LA/LB; however, since December 14, the port of LA has indicated a reduced number to either 4 or 5 when the usual average is 18-23 vessels at berth. Container vessels are waiting an average of 20-31 days to reach a terminal to unload their containers.
*Note: Loitering = Container vessels slow speed steaming and not at anchor.
LA/LB Container Dwell Fee Postponed Until December 20, 2021
For the fifth week, the ports of LA and LB postponed the new container dwell fee citing progress in removing aging import cargo from the docks. The ports will continue to monitor the cargo flow through the terminals. Since the fee was announced on October 25, 2021, both ports have noted a decline of 47% in aging on-dock containers. Both Executive Port Directors have attributed the decline to the impending dwell fee program. As proposed, the fee would be charged to the ocean carriers who carried the cargo and would likely be passed on to the shipper or importer. As of Monday, December 13, 2021, the port captured data indicating 16,822 containers at LA and 19,137 containers at LB have been sitting for 9 days or longer. An additional 487 rail-bound containers have been sitting for 6 or more days at LB, and in LA, there are 3,456 rail-bound containers without aging information. A total of 36,447 containers would have been fined if the ports had not postponed the implementation of the program.
Executive Port Director, LA Gene Seroka’s Comments
On December 15th, Gene Seroka, Executive Port Director of LA provided comments during his annual year wrap-up. He indicated efforts on multiple fronts continue to ease the supply chain issues that resulted in the massive number of vessels backed up at the twin ports. In brief, Seroka stated that several advances have been seen including increased productivity levels and decreased cargo dwell times. He added: “We’ve got a long way to go and no one is declaring victory.” Among looming challenges, Seroka stated, “providing enough chassis so truck dwell times can be further cut.” Seroka foresees the import volume and pace will continue through 2022, and while peak holiday season shipments are done, the rush is already on to beat shipment deadlines before what will be an early Lunar New Year, causing factories in China to close in early February 2022. Seroka further stated, “U.S. retailers have indicated they would spend the second quarter of 2022 replenishing their stock and the port will pivot into an earlier-than-normal peak season at the end of next year. Seroka said, “Store inventories stand only about 1% below where they were 12 months ago and warehouse inventories are up about 2% compared to the same time last year. While there is still much we need to improve, goods are making their way into the hands of consumers. Truck dwell time could be better, but it has declined from a peak of 11 days to 6 days. Rail time, the amount of time cargo waits on docks to be picked up and taken to its ultimate destination, is down from a peak of 13.5 days during the summer to currently 2 days, further indicating it is the lowest since pre-COVID times. Empty containers are piling up and remains a problem, but progress has been made. While there are 71,000 empties, they are imploring shipping companies to bring in more and larger sweeper vessels to remove them. The port has created several near-dock depots on Terminal Island so empties can be returned to mid-point locations to better triangulate the flow of the trucks and move cargo out faster.”
U.S (United States) Inflation Up – 6.8%
The Bureau of Labor Statistics released that the annual inflation rate of the United States is 6.8% for the 12 months ending in November 2021. It is the highest rate of growth since June 1982 and is the largest 12 month increase since the period ending June 1982.
The Federal Reserve Issues Statement
On December 15, 2021, Jerome Powel, Chairman of the Federal Reserve, and fellow chairperson’s members concluded, the path of the economy continues to depend on the course of the virus. Progress on vaccinations for COVID and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain and include new variants of the virus.
On December 16, 2021, USA Today reported, “Federal Reserve Sets Stage for Earlier Faster Interest Rate Hikes as Inflation Soars.” The Federal Reserve last month was keeping the key interest rate near zero to boost the economy and help more Americans return to work after the COVID-19 induced recession. Now, the Federal Reserve committee seems poised to raise the short-term rate to fight inflation. Jerome Powell, Federal Reserve Chairman, said in the Dec 15, 2021, video news conference, “This is a strong economy, one in which it’s appropriate for interest rate hikes.”
Please contact your Western Overseas representative with any questions.