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Los Angeles handles 946,966 TEU in April

Despite some improvements, congestion persists at Los Angeles, and there is some talk about how 24 hour operations might be implemented at the busiest box port in the US.

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Los Angeles handles 946,966 TEU in April

The month of April brought another monthly record for the Port of Los Angeles. The 946,966 TEU the port handled in the month was up 37% on April 2020. In the first four months of 2021, Los Angeles is up 42% to 3.59M TEU. On a pre-pandemic comparison with the same for months in 2019, Los Angeles is still up 20%.

 

There were some signs congestion was easing at the end of the month when the vessel queue fell to just nine ships at anchor and street dwell times dropped slightly. In February, 90% of vessels had to wait an anchor for a berth, and in April that number dropped to 65%. “Fewer ships are going straight to anchor, and of those that do, the wait time is decreasing as our labor force and supply chain partners adeptly handle the steady stream of cargo on our docks,” Port of Los Angeles Executive Director GeneSeroka said.

 

A return to something resembling normal does not seem likely in the short term, however. By mid-May the vessel queue at San Pedro was back up to 17, with 8 ships waiting to get a berth at Los Angles. Seroka said the port’s forecasting shows “a continued stream of imports in the three weeks ahead, and well into summer time.”

 

There are concerns about what will happen when the ‘traditional’ peak season occurs later in the year. Newly-appointed Federal Maritime Commission (FMC) Chairman Daniel B. Maffei joined Seroka for the port’s monthly press conference and noted that the ports have been operating “at or beyond capacity” for some time now.

 

Ports and terminal operators are looking for ways to ease the congestion, and one of the levers Seroka said the industry is exploring is 24/7 operations. Seroka said that “in theory” 24 hour operations are “very attractive” but “factoring in private sector labor costs is challenging.”

 

Under the agreement with the ILWU, terminal operators can put on a third shift for the hours between 3am and 8am, which is called the “Hoot Shift,” but they are paying eight hours for five hours work, and productivity is said to be an issue. A bigger problem is that the trucking and distribution industries would need to be able to receive import containers 24/7, which would require significant change. Seroka said it is something the industry “will continue to look at.”

 

Another issued canvassed during the press conference was how the FMC might be able to assist US exporters with improved empty container availability. The empty box shortage worsened in April, with 342,391 TEU sent back to Asia from Los Angeles empty, compared to 114,449 TEU loaded. On a container basis, the ratio of full export containers to empty export containers hit 4.3:1.

 

Despite pressure from groups like the US Agriculture Transport Coalition (AgTC), there is not much the FMC can do to address the problem in the short term. The US Shipping Act says that carriers cannot refuse to carry US cargo, but says nothing about prices and market rates. Chairman Maffei said that while a “refusal to deal” is a violation of the Shipping Act, setting prices at a level beyond what exporters are willing pay “in itself is not a violation.” Maffei added that there is some talk of amending the Shipping Act, but that is not a matter for the FMC.

 

In the meantime the FMC is continuing to support Commissioner Rebecca Dye’s Fact Finding No. 29, International Ocean Transportation Supply Chain Engagement, in order to identify operational solutions to cargo delivery system challenges related to Covid-19. As Fact Finding Officer, Commissioner Dye is authorised to convene "Supply Chain Innovation Teams" that will engage key executives from all facets of the ocean cargo system to support the effort. Chairman Maffei said the FMC wants to establish a "go-to person for exporters in a consumer response division" and see if there are any areas where it can strengthen enforcement if shippers are, in fact, being treated unfairly on points like detention and demurrage and equipment charges.

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