Why Container Ships Can’t Sail Around the California Ports Bottleneck
By Paul Berger, 9/21/21, Wall St. Journal
There appears to be no sailing around the breathtaking
backup of container ships off the jammed ports of
Los Angeles and Long Beach.
Newly arriving vessels are adding to a record-breaking
flotilla waiting to unload cargo that on Sunday reached
73 ships, according to the Marine Exchange of Southern
California, nearly double the number a month ago and
expanding a fleet that has become a stark sign of the
disruptions and delays roiling global supply chains.
Before the pandemic, it was unusual for more than one ship
to wait for a berth.
Big vessels are continuing to join the bottleneck, experts
say, because shipping lines and their cargo customers have
few options for resetting countless supply chains moving
goods into the U.S. that have been constructed over decades
around the critical San Pedro Bay gateway now staggered by
the overflowing demand for imports.
Although some ships have headed to other import gateways,
and a handful of shippers have chartered smaller vessels
to move goods through other ports, the diversion is minor
compared with the hundreds of thousands of containers
idled in the waters off Southern California.
“Everything is aligned to L.A.,” said Nathan Strang, senior
trade lane manager for ocean operations at Flexport Inc.,
a San Francisco-based freight forwarder.
The congestion this year has been caused by a surge in
imports as consumer demand in the U.S. has shifted away
from services to goods and home improvements and retailers
have rushed to restock inventories that were depleted last
year in the early months of the pandemic.
The neighboring California ports are the principal seaborne
gateway to the U.S. thanks to the growth of containerization
over the past 60 years and an explosion in goods trade,
particularly U.S. trade with China. Last year, the two
ports handled the equivalent of 8.8 million loaded import
containers, more than double the 3.9 million loaded boxes
that arrived at the nation’s next busiest port at New York
and New Jersey.
The California ports are in easy range of China and the
factories that churn out big volumes of electronics, apparel
and an array of other consumer goods. They have enough land
to house dozens of cranes capable of emptying large ships
as well as sprawling terminals to store boxes.
For the retailers that are among the major importers at
Los Angeles and Long Beach, the ports offer quick reach to
one of the largest population centers in the country. That
means they can split arriving goods between a large local
consumer base and rail links that offer steady, direct
transport to the rest of the U.S. through inland hubs,
with most of the boxes heading through Chicago.
Despite some shortages, the availability of trucking
equipment, warehouse space and labor is also far greater
than at other ports.
Shipping executives say other West Coast ports, like Oakland
or Seattle, simply aren’t large enough to handle the hundreds
of thousands of containers that Los Angeles and Long Beach
unload, store and move by truck or rail each week.
“It would just take a very small portion of L.A./Long Beach
to overwhelm those ports,” said Craig Grossgart, senior VP
of global ocean for Seko Logistics, an Itasca, Ill.-based
freight forwarder.
Executives say demand is so high that shippers are willing
to take almost any route into the country to replenish
inventories in time for the holidays.
“We are using every available port that is out there,” said
Sri Laxmana, the vice president of global ocean products
at C.H. Robinson Worldwide Inc., the largest freight broker
in North America.
Some shippers have shifted freight to U.S. Gulf and East
Coast ports, but that alternative also comes at a cost
since it adds weeks to transit times from Asia & the longer
routes are more expensive than shipping into the West Coast.
“Shipping into the East Coast was the great secret for
those of us advising early in the crisis,” said Bjorn Vang
Jensen, VP of global supply chain at Denmark-based marine
data company Sea-Intelligence ApS. “But the secret got out
& now those ports are just as screwed as other ports are
because everyone wants to go there.”
In recent weeks, the Port of Savannah has had 20 or more
ships at anchor waiting for a berth. Griff Lynch, executive
director of the Georgia Ports Authority, said he expected
the congestion would last for at least a couple of more
weeks as shipping’s peak season continues.
“This has never happened before,” he said.
Companies that mitigated risk by shipping thru alternative
ports have found themselves snarled by the Southern
California congestion in other ways, too.
Malouf Cos., a Logan, Utah-based furniture retailer that
started shipping some of its goods thru Port Houston a few
years ago, now is struggling to source containers because
hundreds of thousands of the boxes are floating on ships
waiting to unload at Los Angeles and Long Beach.
Jordan Haws, Malouf’s director of supply chain, said the
firm has about 55% of the inventory it would have if it
was fully stocked.
“It’s a vicious cycle that we are stuck in, and until that
port can get on top of things, I don’t see things stabilizing throughout the trans-Pacific trade,” he said.
https://www.wsj.com/articles/why-container-ships-cant-sail-around-the-california-ports-bottleneck-11632216603
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