Questions from importers…
I’m experiencing unprecedented container import delays and congestion. I’ve been importing for decades. Has this ever happened in the shipping industry?
This is an absolutely unprecedented time. There’s no way to adequately describe it other than “drastically congested.” Personal consumption among Americans increased from January 2020 to January 2021 by 10% from $4.8 trillion to $5.3 trillion. Many of the goods ordered are made in China and are furnishing and household equipment that take up more space in containers.
The monthly Global Port Tracker report released in April from the National Retail Federation and Hackett Associates says the situation is expected to continue at least through the end of this summer as retailers work to meet increased consumer demand.
February’s data (the most recent available) demonstrates the challenge.
-U.S. imports from Asia in February jumped 27.3% year over year, which is the seventh consecutive month of double-digit growth.
-Total U.S. containerized imports in February increased 20.3%; imports from China alone jumped 44.3 %, according to PIERS.
-Imports from China in February represented 43.4% of total U.S. imports and 64.3 percent of U.S. imports from Asia, according to PIERS.
Because China is the largest trading partner of the ports of Los Angeles and Long Beach, and the Southern California port complex accounts for about 50% of U.S. imports from Asia, importers can expect continued congestion problems in the Southern California gateway in the coming months. In early April, 17 ships waited to port at LA/Long Beach compared to 60 anchored and waiting in late February/early March.
What are my options for shipments?
The Cargo Services import team reviews options for clients each day. An option clients are asking about is to simply reroute a container using truck instead of rail or vice versa. Maybe air sounds faster than a container ship.
The idea to reroute a container feels like the right thing to do, but we’re finding that can cause additional delays. In normal times, locating a container, having it pulled, processed and reloaded causes a delay. Right now, that delay would be further extended. Some clients are asking about shipping via air. When we price air cargo, many clients find it cost prohibitive.
Instead of rerouting containers that are in transit here are suggestions for supply chains:
- Consider future orders. Understand and know how the three steamship line Alliances work and their options. Diversify shipments within these Alliances. If one shipment experiences a delay, it’s likely a shipment on another carrier in a different Alliance will continue through transit. Use this infographic for information on Alliances.
- Know the different port options available. LA/Long Beach is the most congested. Could a shipment move through the Panama Canal to the East Coast more efficiently?
- Consider trucking from a different ramp. Midwest options: Louisville, Cincinnati, Chicago, Cleveland, Columbus, Detroit, St Louis.
My container is sitting at the port and has not moved onto rail. How long is it likely to stay there?
Some containers are moving faster than others. We’re finding it depends on the terminal at the port and how the terminal handles rail containers. The longest we’ve seen a container sit in the last three months is 54 days in Long Beach. The following week, we managed a container that moved through the port in just seven days. Plan your supply chain with delays up to 30 days in Long Beach. Rail transit is slightly delayed from the West Coast, but not nearly as bad as the congestion at the port terminals themselves.
How long do you think this congestion/delay period last?
Currently, we’re projecting late third/early fourth quarter, but it could be longer. Many factors can change our predicted forecast. Some delays are due to professionals working from home. As vaccinations are distributed and people go back to work perhaps that small factor could help move paperwork along to keep shipments moving, for example.
Why did I pay premium and still have to wait and be a part of the congestion?
Carriers offered premium options to guarantee space on the vessels, but the vessels don’t go faster. The premium payment also doesn’t guarantee a slot(s) at the port, on the rail, or on a truck. It’s only a spot on a vessel. Many vessels are berthed and waiting for their turn to be unloaded.