Logjams at U.S. ports are spreading beyond Southern California’s choked gateways, and shipping officials are projecting the backups will continue into the summer.
“The congestion has been significant in Long Angeles and Long Beach, but other ports are also congested,” said Rolf Habben Jansen, chief executive of German container line Hapag-Lloyd AG , which diverted some ships to Oakland in recent weeks. “Bookings are up dramatically and we are trying to avoid congested ports, but it’s not easy.”
The backups that started building up late last year have grown during a normally slack period in shipping demand, tying up inventories for weeks in some cases as ships wait to reach berths while offloaded containers sit for long periods at packed freight terminals.
Delays that have stretched from docks to rail yards, truck terminals and distribution centers have rattled supply chains for companies from big auto manufacturers to mom-and-pop retailers, straining assembly lines because of parts shortages and leaving store shelves empty.
Bottlenecks at the ports of Los Angeles and Long Beach, the nation’s two biggest gateways, eased with the queue of ships waiting to dock shrinking to fewer than 20 this week from an armada of around 40 vessels at one point earlier this year, according to the Marine Exchange of Southern California.
Port of Los Angeles Executive Director Gene Seroka said at a Tuesday press conference that bottlenecks are gradually improving, with the average time arriving ships have to wait to reach a dock down to a week from up to two weeks in December and January.
But Mr. Seroka said another rush of ships was scheduled to arrive in the coming days and the port expects the rush to continue “into the spring and early summer.”
Los Angeles handled 799,315 containers overall in February, up 47% from a year ago, and it is projecting more than 830,000 containers to pass through its docks in total in March and April. The neighboring Port of Long Beach moved 771,135 containers in February, up 43.9%, the port’s largest-ever annual increase.
Mr. Seroka said 90% of the Los Angeles port’s storage space remains packed with containers, and “we consider 80% to be full.” He said there is a shortage of truck drivers and warehousing outside the port needed to handle the volumes.
Smaller ports like Oakland are filling up as liner companies and their shipping customers look for ways around the bottlenecks.
“The surge in e-commerce has significantly increased the volume of incoming cargo,” said Port of Oakland spokesperson Marilyn Sandifur. “We’ve got 20% more vessels coming in over the last month, with six to a dozen vessels in the San Francisco Bay waiting to dock for up to seven days.”
The port’s routine changed dramatically in February when import volumes surged 26% from a year ago after falling 12% in January. France’s CMA CGM SA, the world’s fourth-largest container operator, started using Oakland in a weekly six-ship service from China.
The surge came while one berth at the port was shut down to install bigger cranes. The site will remain closed until later in the spring.
Shipping executives say another surge may be in the works as the American economy picks up speed following enactment of a $1.9 trillion coronavirus relief plan.
“The big question is, will the Americans spend their new stimulus checks? If they continue buying stuff instead of travelling or going out to restaurants, then the bottlenecks can get worse,” said Lars Jensen, chief executive of Copenhagen-based SeaIntelligence Consulting.
Meanwhile, importers with goods tied up in the jammed supply chains are turning to alternatives such as airfreight, at a far higher cost than ocean transport, to make sure their shelves are stocked to meet the demand.
Abbie Durkin, the owner of Palmer & Purchase, a women’s clothing and accessories shop in Rye, N.Y., said she ran out of shopping bags made in China when deliveries fell two months behind schedule, and she now flies in 20% of her orders to get them on time.
“Our suppliers and manufacturers in China and Korea are putting out less goods. We used to be able to reorder products regularly, but not anymore. What you get is what you get,” she said. ”The transport cost is at least double. I will have to bring up my prices in June.”
At the Harrison Market, a supermarket in Harrison, N.Y., shop manager Dan Tores is already changing the price labels on products.
“It’s been crazy,” he said. “Prices have gone up by a quarter over the past few months and our regular customers are angry. Our suppliers say it’s high transport costs, and I still struggle to get enough cleaning products. We’ve been here for 20 years and it’s never been like this.”
This article originally appeared on Wall Street Journal
Comments