When port congestion will improve ?

Hopes that congestion in Southern California's ports will improve are fleeting. The number of container ships waiting at sea has decreased, and trans-Pacific spot prices have stabilized. The Biden government announced that the port will operate 24/7. However, the reality is that the congestion situation in Southern California ports has not improved.

The waiting time for ships at sea continues to extend. There are too many ships and goods arriving, and the docks, trucks, trains and warehouses cannot handle them in time. The number of ships berthing and staying in waiting mode is once again close to historical records.

According to data from the Southern California Maritime Exchange, ships waiting to berth outside the ports of Los Angeles and Long Beach on Tuesday, including container ships, general cargo ships and other ships carrying containers, have a total capacity of 512,843 TEU. From this perspective, this This is 10% more than the import volume of the Port of Los Angeles in September.

Assuming that the ship is fully loaded, what is the value of the goods in these "floating warehouses"? The value of each container varies greatly, and it may be worth thousands of dollars or hundreds of thousands of dollars. But the statistics of the Port of Los Angeles may provide a reference.

In 2020, the total customs value of the port of Los Angeles container imports is 211.9 billion U.S. dollars, and the total import volume is 4,827,040 TEU, which is equivalent to an average price of 43,899 U.S. dollars per imported TEU. This means that the total value of the cargo trapped on ships outside the ports of Los Angeles and Long Beach is about 22.5 billion U.S. dollars, roughly equivalent to McDonald's annual income or Iceland's GDP.

According to the latest data from the official website of the Port of Los Angeles, the average time for ships in the Port of Los Angeles to wait for berth has risen to 13 days, reaching a record high. Among them, ships have been waiting for berth up to 32 days.

According to CNN, Gene Seroka, executive director of the Port of Los Angeles, said that there were about 200,000 containers on board the coast of Los Angeles this Monday.
Seroka said in an interview with CNN: "The workload for berthing ships is equivalent to two weeks. The port is unloading, and then prioritizes the cargo that needs to leave the port as soon as possible. Some products need to be shipped quickly. Such as Christmas goods and factory parts."
Since Biden announced in a speech at the White House last week that the port will implement a 24/7 operation plan, the port has made some progress in moving containers out of the terminal. In terms of the number of containers, the Port of Los Angeles is the largest port in the United States. Seroka said: "25% of the cargo on our terminal has a backlog of 13 days or more. In the past week, this part of the cargo has only been reduced by about half."
Phillip Sanfield, Head of Media Relations at the Port of Los Angeles, said: [There seems to be no cargo owner who wants to use the window from 3 a.m. to 8 a.m. If no one is interested in extending the opening hours, the terminal will not want to open. We have not seen any cargo owners. Request to pick up at night."
But the problem does not stop there. The main reason for the backlog is the influx of goods from Asia.
U.S. consumers' spending on services such as traveling, watching movies, or other activities is decreasing, and spending on commodities such as daily necessities and automobiles is increasing. The increase in imported goods and products made with imported components has resulted in more containers passing through the port than before the epidemic.
Seroka said that although extended working hours can relieve congestion at the port to a certain extent, executives expect that the volume of imported freight through the port will remain at a high level until at least February 2022.

Source:https://www.sofreight.com/