California port congestion: Record number of ships anchored

Record number of ships anchored off California

Record number of ships anchored off California

Forty-four freight ships are stuck awaiting entry into California's two largest ports, the highest number recorded since the beginning of the pandemic, the Marine Exchange of Southern California reported on Saturday.

The California port congestion is a result of the labor shortage, Covid-19-related disruptions, and holiday-buying surges. Port of Los Angeles data indicated that the ships' average wait time had increased to 7.6 days, Business Insider reports.

In mid-August there were 37 ships waiting to enter the two ports.

"The normal number of container ships at anchor is between zero and one," Kip Louttit, the executive director of the Marine Exchange of Southern California, told Insider in July.

California ports in Los Angeles and Long Beach account for about one-third of US imports. These ports operate as a primary source of imports from China and have experienced heavy congestion throughout the pandemic.

"Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago," Louttit said. "They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo."

While the container ships are forced to anchor and await berth space, companies importing and exporting goods to and from Asia expect additional shipping delays.

This comes during one of the busiest months for US-China trade relations, as retailers buy ahead in anticipation of US holidays and China's Golden Week in October, Bloomberg reported. 

"To give you a real-life example of the kinds of challenges we're seeing, one of our dedicated charters was recently denied entry into China because a crew member tested positive for COVID, forcing the vessel to return to Indonesia and change the entire crew before continuing," Michael Witynski, Dollar Tree's CEO, said on a Thursday earnings call. "Overall, the voyage was delayed by two months."

Peter Sand, chief shipping economist at global shipowning organisation BIMCO, told news publication Splash: “Shippers, some of which are already low on inventories, are frontloading to secure goods in stock for upcoming key sales seasons such as Black Friday and Christmas.”

Sand said longshoremen at both ports have been unable to get containers out of the port – loaded inbound as well as empties outbound – fast enough.

“As yard density is now quite high, the efficiency of the logistics comes down,” Sand explained.

A lack of chassis across the US is also making the line of ships waiting longer. Retailers in the US are battling record low inventories, likely meaning the container crunch will worsen in the coming weeks.

 

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