The number of container ships slated for southern California remains unchanged (Port of Los Angeles file photo)

Posted on Jan 6, 2022, 9:24 PM by

The maritime executive

While there has been speculation that the worst supply chain disruption may be over, port officials report that the surge in imports shows little sign of slowing after the year-end holidays and at the start of the new year. While some ports such as Savannah continue to predict success in clearing the container ship backlog, the number of ships heading to southern California ports shows no signs of slowing down.

“We’re in a mini-peak before the Lunar New Year,” Port of Los Angeles executive director Gene Seroka told CNBC in a Jan. 4 interview with the Squawk Box program. “The cargo trailer continues.”

The first reports from the Marine Exchange of Southern California for the new year confirm that little progress has been made in reducing the backlog. However, the new vessel reservation system has succeeded in spacing out vessels by removing images of container ships stacked in the anchorage offshore. The report shows that there are only 16 ships either at anchor or within 40 miles of the ports of Los Angeles and Long Beach. The total, however, remains largely unchanged with 89 additional ships checking in for arrival slots and slowly heading south to Southern California. A total of 105 container ships are heading to the terminals at the twin ports, but demonstrating the effectiveness of the new queuing system, out of the 17 container ships arriving in the current three-day period, all but one head straight for the terminals.

In her interview, Seroka told CNBC listeners that there is additional capacity both in the tracks and in unused truck reservation slots. He said the goal is to use every bit of capacity and reduce every hour and every change in capacity to maximize efficiency.

IHS Markit’s analysis of data reports, however, indicates that port productivity has fallen with increasing dwell times. They told the Journal of Commerce that there was “a dramatic increase in the average number of mooring hours” citing that overcrowded stations and terminals made it more difficult to unload containers.

Voids continue to be one of the biggest issues, Seroka says. On CNBC, he cited data that found 71,000 empty terminals at the start of this week with an additional 10,000 TEUs in off-dock yards that had been set up to relieve some of the pressure at the terminals. He said more than two-thirds of boxes have a residence time of nine days or more, which has led to the new fee being proposed by ports to encourage carriers to empty empty boxes and send them back to Asia.

“It’s hard to say if the pressures in the supply chain are at their peak – peaked,” replied John Porcari, envoy from the port to the White House Supply Chain Working Group at the time. a press briefing on January 5. “I think what’s clear is that the pandemic was laid bare what the underlying reality was that the supply chain was stressed even before the pandemic. And we clearly have changes to it. contribute to build a more sustainable and resilient supply chain. ”

When asked what he envisions for the future, Seroka told CNN in an interview, “I don’t see us falling off a cliff.” He expects consumer spending to remain high, fueling import volumes through 2022. However, he believes large retailers, in particular, are becoming more strategic in their shipments, which is helping both small shippers to find capacity and reduce overall challenges. go ahead for the ports.

“The system was gutted because a lot of people on the bigger side had gone from managing inventory ‘on time’ to ‘just in case’,” Seroka told CNN. “They wanted to get their orders to factories before their competition did, they didn’t want to be the ‘Stationery Person of 2021’.

The Port of Los Angeles expects that when the final tally for 2021 is complete, it will report a 13% increase in container volumes to a record 10.7 million TEUs. Seroka predicts that the current rush to get cargo on ships will continue until the Lunar New Year holiday, which means it will continue to arrive at the port until the end of February before pressures abate with the Chinese factories which should be closed for the holidays.