US Federal Maritime Commission steps in as congestion at Los Angeles and Long Beach reaches ‘critical’ levels
Container lines are blaming massive port congestion in Southern California for mounting losses.
The companies say they are losing money as bottlenecks on the US West Coast [USWC] threaten to wipe out their hard-earned efficiency gains.
In the major ports of Los Angeles and Long Beach, the congestion has reached “a critical point,” says Hapag-Lloyd, which operates to the region as a member of the G6 Alliance.
The German carrier says several containerships are anchored off the harbours and waiting to come alongside, resulting in berthing and cargo delays on up to 15 services it operates with partners.
The congestion issue is of “great concern” to the US Federal Maritime Commission (FMC), which concluded a series of nationwide forums on 3 November designed to discuss possible solutions to the problems plaguing the major US ports.
Speaking before the Maritime Administrative Bar Association recently, FMC chairman Mario Cordero highlighted the impact of the introduction of 15,000-teu to 18,000-teu vessels, which he said flood port facilities with containers when they are unloaded.
Alliances make calls at multiple terminals used by their members and further disrupt the productivity of the affected terminals, he said.
“Where such vessels miss their berth target time, other vessels are delayed awaiting access to berths. These delays may be significant, as alliance vessels may have berthing priorities,” he added.
The situation is complicated by inland congestion said to be caused by, among other things, a shortage of lorry drivers.
“Unfortunately, the sources of the problems are multiple and do not appear to be subsiding during this peak season,” said Cordero.
“While there may be a reduction in congestion in the next few weeks, it seems likely that congestion will increase with the cargo surge in advance of the Chinese New Year.”
A short-term fix to the problem has yet to be identified, although the International Longshoremen’s Association (ILA) is looking for a long-term solution by calling for an improvement in transport infrastructure.
“As ships become increasingly larger, terminals must adapt to accommodate the increased volume of cargo passing through ports on a daily basis. Equipment that was once sufficient to handle the cargo is no longer adequate,” the ILA wrote in a filing to the FMC.
Meanwhile, the cost of congestion is adding to the woes of carriers, with Singapore-based Neptune Orient Lines (NOL) blaming severe congestion for an increase in operating costs of its liner division, APL.
Together with lower freight rates and volumes, congestion was partly responsible for losses of $59m in the year to date.
“Unfortunately, the industry-wide port congestion issues in Southern California have adversely impacted our performance,” said APL president Kenneth Glenn.
“We are working simultaneously on several fronts to urgently address the issues.
“This includes realigning our network to facilitate smooth cargo flow through the USWC, and working with our partners on equipment and productivity challenges,” he said.
Port congestion has badly affected schedule reliability for carriers on the transpacific eastbound trade, despite some, including Hamburg Sud, sailing at full speed to make up for the departure delays, says Alan Murphy of analyst SeaIntel.