Caught in a Perfect Storm
In our previous blogs we've described the difficulties vendors and shippers are experiencing with port congestion at the west coast Ports of Los Angeles and Long Beach. Reasons cited for the delays are several including port union labor slowdowns and contract issues, increased shipping volume, increased container size, multiple delivery points, tight terminal space, insufficient supply of chassis and disagreement about drayage driver assignments. In short, there is no shortage of problems and apparently, no quick fix in sight.
Anything but Yaw
A recent survey conducted by the Journal of Commerce (JOC) reports that 97% of shippers have been impacted by the serious delays at Los Angeles and Long Beach. Major lines like Hapag state that delays are creating a chain of economic fallout. Late arrivals make it possible for vendors to insist on cost reductions on their shipping contracts. Retailers waiting for goods are canceling orders that effect manufacturers. Ships stuck in port are missing contractual departure dates and being penalized through additional fare slashing. The economic burden is exponential.
Some shippers have elected to change routes and divert shipments to US east coast ports and western Canadian ports. Others that cater to manufacturers on the west coast say they would divert their ships if it were possible; they describe themselves as geographic hostages. Expressed in numbers, the extent of the pain due to port congestion is graphic.
- When asked if things were getting better or worse at LA Port and Long Beach Port, only 2% said things were improving, 33% said things were unchanged while 65% said they were getting worse.
- Asked if their company had been negatively impacted, 97% said yes.
- Inquiries about ship days in port were eye opening. Only 11.6% reported sitting in LA-LB terminals for 5 days or less. The majority, 51.5%, reported stays of 5-10 days. A full 33% stated experiences of being docked for more than 10 days.
- Questions about shifting routes to other ports were not surprising. Nearly 70% said they were looking to reroute their vessels; many of the remainder would reroute if it were feasible.
Reasons cited for the various problems are likely topics for dispute and interpretation, but through all the muck one thing is clear - the problems are complex and not easily resolved. While the Port of Oakland has also experienced some delays they are small in comparison to LA and Long Beach. To assess whether it makes sense for you to ship cars through Port of Oakland, please contact one of our shipping professionals.