Inside California’s colossal container-ship traffic jam

www.freightwaves.com , Greg Miller, Senior Editor, Wednesday, January 13, 2021

Over 30 container ships are anchored in San Pedro Bay off Los Angeles and Long Beach.

In the movie “Falling Down,” the character played by Michael Douglas is stranded in a Los Angeles traffic jam. He abandons his car, starts walking with briefcase in hand and ultimately has a mental breakdown. Cargo shippers trying to get their containers through the ports of Los Angeles and Long Beach can relate. The pileup of container ships offshore in San Pedro Bay and the congestion onshore at the terminals have reached epic proportions.

The situation could get even more maddening in the weeks ahead.

32 container ships at anchor

American Shipper interviewed Kip Louttit, executive director of the Marine Exchange of Southern California, to get the latest on ships in San Pedro Bay.

He reported that as of midday Wednesday, 91 ships were in port: 46 at berth and 45 at anchor. Of those, there were 56 container ships: 24 at berth and 32 at anchor. Between Wednesday and Saturday, 19 more container ships will arrive, with the same number due to depart.

There were a few more container ships at anchor on Friday —37 in total. Yet Louttit said “there has been no significant change between the first of January and today.”

Louttit confirmed that ships have effectively filled all of the usable anchorages off Los Angeles and Long Beach. Ships have also taken six of the 10 contingency anchorages off Huntington, the next town south.

If all the anchorages and contingency anchorages fill up, ships will be placed in so-called “drift boxes” in deeper water. These are actually circles not boxes. Unlike ships at anchorages in shallower water, ships in drift boxes would not anchor, they’d drift. “When you drift out of the circle, which has a radius of 2 miles, you start your engine and go back to the middle of the circle,” explained Louttit.

Historical perspective on traffic jam

Given the drift-box option, container ships are not about to hit any kind of maximum capacity offshore of California. Nor is there a higher safety risk. “There are a lot of ships, but they’re all very carefully watched and managed,” affirmed Louttit.

The significance of so many anchored ships is what they reveal about the extent of the logistics logjam on shore. The most recent comparable anchorage level occurred during the labor dispute between the International Longshore and Warehouse Union (ILWU) and their employers in 2014-15.

“On March 14, 2015, there were 28 container ships at anchor. We’ve blown through that record,” said Louttit. The all-time record for ships at anchorage off California occurred in 2004 during a rail staffing shortage.

“Normally, if you want a baseline, there’d be a dozen and rarely are they container ships,” he said.

Signal still flashing red

The Marine Exchange does not look past the coming four days’ arrivals. But there are other ways to see what’s headed this way across the Pacific.

It takes two to three weeks for containers to cross the ocean from China to California. The Port of Los Angeles developed The Signal, a daily digital tool powered by Port Optimizer, to indicate what’s en route. The system uses manifest data from nine of the top 10 carriers calling in Los Angeles.

The Signal data updated on Wednesday showed no letup in sight. Imports are expected to rise from 143,776 twenty-foot equivalent units (TEUs) this week to 157,763 TEUs next week to 182,953 TEUs the week of Jan. 24-30.

Importantly, the data does not solely include TEUs arriving in a particular week. It also includes TEUs arriving in prior weeks that the port expects to handle in the stated week.

Consequently, the data provides an indirect indicator of how much cargo is getting delayed. For example, on Monday, Jan. 4, The Signal indicated the port would handle 165,000 TEUs that week. But by Friday, Jan. 8, the assessment for that same week had plunged to 99,785 TEUs — implying that over 65,000 TEUs were pushed to the following week (i.e., this week). This pattern also suggests that the forecast for 182,953 TEUs the week of Jan. 24-30 will ultimately be revised downward.

Congestion causes

In an alert to customers this week, carrier Hapag-Lloyd reported, “All terminals [at Los Angeles/Long Beach] continue to be congested due to the spike in import volumes and [this] is expected to last until February.

“Terminals are working with limited labor and split shifts,” it said, asserting that this is related to COVID. “This labor shortage affects all terminals’ TAT [turnaround time] for truckers, inter-terminal transfers and the number of daily appointments available for gate transactions and delays our vessel operations.”

As a result of “lack of terminal space” to service vessels, “there is a constant switching of terminals that must be kept in mind” given that containers are ending up “in the wrong terminal,” said Hapag-Lloyd. 

Congestion woes are now spreading well beyond California ports, confirmed Hapag-Lloyd. The carrier reported “heavy congestion” in Canada and “berth congestion at Maher Terminal and APM Terminals [in the Port of New York and New Jersey] impacting all services with delays of several days being experienced upon arrival.”

Little relief ahead

Liner companies traditionally cancel numerous sailings during the Chinese New Year period to account for decreased Chinese exports. If they did so in 2021, it would allow U.S. terminals time to clear some of the inbound congestion. Unfortunately for terminals, liners are opting against canceling sailings during the Chinese holiday period next month.

Ports could also see congestion relief if U.S. consumer demand slowed. However, that does not appear to be happening.

Analysts believe the “blue sweep” scenario — with Democrats winning the presidency as well as both houses of Congress — will spur $1 trillion-$2 trillion in new stimulus during the first half of this year.

Investment bank Evercore ISI predicted, “Additional checks will reach consumers at a time when unemployment is lower [than during the 2020 stimulus round], mobility has significantly improved, the overall willingness to spend of the general public is up significantly, confidence levels are higher, housing is strong and the savings rate is still extremely high. That is a set-up for a consumer boom.”

CSMS #45244051 – GUIDANCE: Generalized System of Preferences (GSP) Expires effective, December 31, 2020

This notice is to inform the Trade that the Generalized System of Preferences (GSP), special program indicator (SPI) “A,” “A+,” and “A*”, will expire on December 31, 2020 if no Congressional legislation is passed to renew the program.

Until further notice, GSP eligible goods entered or withdrawn from warehouse need to pay “General” (column 1) duty rates effective, January 1, 2021, 12:00 am.

U.S. Customs and Border Protection (CBP) encourages importers to continue to flag GSP eligible importations with SPI “A” during the lapse, starting January 1, 2021.

Importers may not file SPI “A” without paying duties. CBP has programming in place that, in the event that GSP is renewed with a retroactive refund clause, will allow CBP to automate the duty refund process.

CBP will continue to allow post-importation GSP claims made via post summary correction (PSC) and protest (19 USC 1514, 19 CFR 174) subsequent to the expiration of GSP, for importations made while GSP was still in effect. CBP will not allow post-importation GSP claims made via PSC or protest subsequent to the expiration of GSP, for importations made subsequent to expiration.

Should you have any questions regarding this notice, please contact the Trade Agreement Branch at FTA@cbp.dhs.gov

Brexit has happened. UK and EU finally split as a New Year dawns.
But what are the key changes?

This time there are no mass celebrations — or public mourning — of the event. Pandemic restrictions put paid to the type of scenes that greeted the UK’s departure from the EU last January.

That moment was largely technical, symbolic. Eleven months on, this one brings real, tangible, immediate change.

The shift in power that has beckoned ever since the United Kingdom voted to leave the European Union in June 2016, finally takes place from New Year’s Day.

The post-Brexit transition period, which has kept the UK temporarily attached to most EU rules, expired at midnight CET (23.00 UK time on December 31).

As of January 1, 2021, the UK is no longer inside the EU’s Single Market and Customs Union. People and businesses will notice the difference as at last — more than four-and-a-half years since the UK’s EU referendum — significant changes begin kicking in.

• Brexit Timeline 2016–2020: key events in the UK’s path from referendum to EU exit
• Post-Brexit Guide: Where are we now – and how did we get here?

Living, travelling, working won’t be the same

The impact will be felt by millions of people with links between the UK and the EU as they live, travel, work and study in countries other than their own.

The EU’s freedom of movement principle no longer applies to the UK, which will introduce a new immigration policy.

Travel between the UK and the continent, and vice-versa, brings new restrictions — with new rules affecting passports, the length of stay, healthcare, driving, insurance, mobile charges and travel for pets.

Working in each other’s territories may require a visa, and professional qualifications may no longer be recognized across borders. The UK is leaving the EU’s Erasmus+ student exchange program.

Residency rights for EU nationals now living in the UK — and Britons living on the continent — are already protected.
But no longer will people be able to move freely between the UK and the EU in the future.

Gibraltar remains in the EU’s borderless Schengen zone following a last-minute deal with Spain.

• Life after Brexit: What will change for people in 2021 when the UK is free of EU rules?

For business, new red tape will bite

The UK’s decision to leave the EU Single Market and Customs Union frees it up to implement an independent trade policy outside the bloc.

But there will be new barriers between the EU and Great Britain — although arrangements for Northern Ireland are different (see below).

New border rules will mean customs declarations and checks on goods between the two major trading partners.

Where products come from will become important: rules of origin will have a knock-on effect on supply chains, while VAT will be due on imports.

Instead of one single regulatory framework there will now be two, bringing further checks and controls as the UK goes its own way over standards.

A combination of stockpiling and pandemic border closures brought logjams to roads leading to Channel ports in the run-up to the end of the transition period, and there are fears of further disruption to supply chains from January.

On New Year’s Eve the UK government published updated advice on new EU trading requirements, with examples for GB-EU trade.

• Life after Brexit: What will change for businesses in 2021 even with the UK-EU trade deal?
• Europe’s major ports are ready for Brexit. Here’s how they did it

Last-ditch trade deal limits damage

The post-Brexit EU-UK deal on trade and future ties struck on Christmas Eve preserves tariff-free, quota-free access to each other’s markets.

It banished the threat of a catastrophic “no-deal scenario” that could have sent thousands of businesses to the wall.

However, it comes with many strings attached. The two sides can diverge on the likes of employment and environmental standards, but there are safeguards — a “rebalancing mechanism” governed by arbitration — to ensure fair competition.

The UK is beyond the remit of EU law or the European Court of Justice (ECJ). But challenges are possible in each other’s courts, and punitive measures may be taken if subsidies distort trade.

And for service industries — highly important to the UK — further uncertainty beckons, as the deal contains only vague commitments. Financial services are not covered at all, to be dealt with by a separate process.

Science and security: Cooperation to continue

Beyond trade, scientific cooperation will continue with the UK still a paying member of the EU’s Horizon Europe program for seven years. It will also remain in Copernicus and Euratom.

There will still be cross-border police investigations and law enforcement. The UK will remain in some EU security exchange programs, but will no longer be part of the European Arrest Warrant or Europol.

The UK will also stay in the European Convention on Human Rights.

• Brexit deal: UK announces ‘Canada-style’ arrangement with EU after December 31
• Brexit deal: what changed on key issues to get the agreement?

The freedom to fish

The trade deal brought a five-and-a-half-year transition period on fisheries. During that time, EU access to UK waters will be cut by a quarter, and British quotas will be increased.

Annual negotiations will then take place, but the EU can take retaliatory action if access is further reduced. And the UK, which sells most of its fish into the EU, is likely to continue to need the European market.

• UK fishermen face new uncertainties over post-Brexit trade deal

New status for Northern Ireland

Although a part of the UK, Northern Ireland nonetheless begins implementing new border formalities with Great Britain in order to keep an open land border with the Irish Republic, an EU member.

Northern Ireland remains aligned to the EU Single Market for goods and will follow EU customs rules, although it leaves the Customs Union along with the rest of the UK.

In December, an agreement was struck between the UK and the EU on implementing the complicated arrangements contained in the 2019 divorce deal that sealed the UK’s exit from the bloc.

• Brexit: UK agrees to withdraw controversial plan to breach international law

A celebration for some, a wake for others

Predictably, UK and EU politicians view the day and its meaning in contrasting ways:

“We are going to open… a new chapter in our national story, striking free trade deals around the world… and reasserting global Britain as a liberal, outward-looking force for good. Detaching ourselves from the EU is only a prelude to the greater task of establishing our new role.” — Boris Johnson, UK Prime Minister.

“My colleagues in the European Research Group have fought long and hard for this day, and we have sometimes been lampooned or even vilified by the Remain-dominated electronic media for our trouble when all we have ever wanted is one thing – to live in a free country that elects its own government and makes its own laws here in Parliament and then lives under them in peace.” — Mark Francois, Tory MP and member of the nationalist ERG.

“Today is a victory for a poisonous nationalistic populism over liberal rules-based internationalism and it’s a very bad, and for me very painful, day.” — Roger Liddle, opposition Labor Party member of the House of Lords.

“We were European before we were British… In time, this country, Scotland, will return to membership of the EU. And in so doing, we will simply make the choice we have made for centuries.” — Michael Russell, President, Scottish National Party (SNP).

“Scotland will be back soon, Europe. Keep the light on.” — Nicola Sturgeon, First Minister of Scotland and SNP leader.

“The United Kingdom remains our neighbor but also our friend and ally… This choice of leaving Europe, this Brexit, was the child of European malaise and lots of lies and false promises.” — Emmanuel Macron, French President.

“It’s a day that will be historic, that will be sad… But we also have to look toward the future. A number of lessons must be drawn from Brexit, starting with lies, I think, that were told to the British. And we will see that what was promised — a sort of total freedom, a lack of restrictions, of influence — I think will not happen.” — Clément Beaune, France’s Europe minister.

Terminal, Rail, Trucking, Chassis Updates

1. Terminal Operations

• LAX/LGB Vessel/Terminal Delay Update:

Terminals:

There are currently 19 ships at anchor awaiting berths in LAX/LGB as of Friday Dec 18th.

All terminals continue to be congested due to the spike in import volumes and the same is expected to last until February 2021.  Moreover, terminals are working with limited labor and split shifts (COVID-19 related).  This labor shortages affect all terminals TAT for truckers, inter terminal transfers, the number of daily appointments available for gate transactions and generates delays in our vessels operations. Lack of terminal space due to congestion for operating the vessels, there is a constant switching of terminals that must be kept in mind when accepting OW bookings that are supposed to be going on dock but end up in the wrong terminal or the UP Off dock terminal (illegal moves).    Hapag-Lloyd is currently shut out at some terminals limiting single empty returns and this situation will not change until we are able to work on the mty extra-loader vessel scheduled for late December.  Dual transactions are encouraged and the Port Authority is pushing this process to keep freight moving in the complex.

An “unprecedented amount of import containers” has taken up all of the marine terminal space at the ports of Los Angeles and Long Beach and forced employers to strictly ration longshore labor, with no immediate relief in sight, according to the largest terminal operator in Long Beach. “Because there is no room at the terminals, imports are just sitting on the docks, taking up space,” Ed DeNike, president of SSA Containers, told a virtual conference Tuesday sponsored by the Agriculture Transportation Coalition.

DeNike said import distribution centers filled beyond capacity are a significant contributor to the congestion at the ports. Truckers are unable to dray import loads from the terminals to warehouses throughout Southern California. SSA’s operating model calls for draying import loads from its three terminals in Long Beach to nearby off-dock yards for temporary storage before the containers are moved to the distribution facilities, but the warehouses are full. “I have 3,000 containers sitting on off-dock terminals that can’t be delivered,” DeNike said.

Rail:

While the shortage of railcars has improved, the terminals are still congested and the on-dock rail performance is still not optimal forcing many units to be trucked to/from the off dock rail ramp and the terminals.  The off-dock ramp (ICTF for UP) is still congested and there are still containers stacked.  We have units at ICTF that have been there for weeks and this has affected many key customers of Hapag-Lloyd.  We are currently working with the UP & our house truckers to move these boxes to the terminals as soon as possible in order to load the cargo but the lack of chassis and limited appointment numbers hinder these efforts.

• Long Beach, CA – Average 7.4 at port – Rail units.  At ramp: 2.3 days; total 9.7 days 
• Los Angeles, CA – Average 8.1 days at terminal.  At ramp: 2 days; total 10.1 days 

Truckers:

High demand has affected overall trucker availability and better rates in other business segments have taken drivers away from the container transportation market & long haul routes.  Industry facing overall trucker shortage (especially for DG & OW units).  If still possible to move some OW units using triaxle chassis, the moves may take more than a week due to scarcity of triaxle chassis and truckers.

• New York Terminal Delay Update:

Terminals – USNYC:

Seeing steady increase of berth congestion / delays mainly at Maher Terminal and APM Terminal. These delays are effecting ERD’s and the number of days being given for export receiving for certain services as all terminals struggle with yard capacity issues. Expect short work weeks and upcoming holidays will impact yard productivity further.  Increased dwell times for import volumes, and large inventories of empty containers continue to impact operations.  Gate turn times for truckers have increased slightly, and terminals with trucker management systems (appointments) (GCT Bayonne, APM Term.) are continuing to report almost 100% utilization of available appointment slots.  Terminals have been extending gate / terminal hours when necessary to accommodate import deliveries.  Maher Terminals, APM, GCT New York, and PNCT are offering Saturday gates on 12/19 to help deliver backlog of import shipments.  Terminals report these Saturday gates are not being utilized as much as needed / expected, so not having great impact on relieving import congestion.

More Saturday gates may be offered in next few weeks, but terminals are requesting help in making sure they are utilized by customers.  ILA labor shortages are a possibility in near future as number of cases amongst ILA members continue to rise.  No drastic impact noted as of yet.

Rail:

NY – Average 5.3 days dwell from DIFU to transfer to MMR ramp (at MMR 4.6); total 9.9 days

• Canadian Terminal Delays Update:

Terminals:

All terminals continue to be congested due to the spike in import volumes and the same is expected to last until the end of Q1 2021.

Weekend labor shortages reported. Holiday labor shortages anticipated.

Berth delays at PRR are particularly long with vessels being held off berth for days. 

Rail:

Railcar supply stable, however, daily rail production under target which is contributing to yard and berth congestion.

Current average rail dwell times:

VAN: 3.6 days

PRR: 2.1 days

2. Trucking Availability:

• Capacity limitation in certain markets due to import volume spikes and severe drivers’ shortage.  Please find main markets, and estimate lead-time to secure capacity below: 

Market / Average 12-days+:

• Savannah, GA (21 days) – Memphis, TN – Baltimore, MD – Macon, GA – Atlanta, GA

Markets / Average 7-days+:

• Cincinnati, OH – Charleston, SC – Miami, FL – New York, NY – Charlotte, NC – Tacoma, WA – Seattle, WA – Dallas, TX – Miami/PT. Everglades, FL –  Los Angeles, CA – Long Beach, CA – Philadelphia, PA –  Norfolk, VA

Markets / Average 4-days +:

• Boston, MA – Buffalo, NY –  Chicago, IL – Cincinnati, OH – Cleveland, OH – Indianapolis, IN – Kansa City, MO – Council Bluffs, IA – Birmingham, AL – Greensboro, NC – Greer, SC – Jacksonville, FL –  Santa Teresa, NM – Laredo, TX – Portland, OR – New Orleans, LA  – Oakland, CA – Houston, TX

3. Chassis Pools:

• USOAK – Constrained on all size types chassis due high demands.
• UCHI – Deficit on 40’ chassis due to demands.
• USMES – Deficit on all chassis types, longer dwells on street.
• USCVG – Constrained on 40’ chassis, need to expedite repairs.
• USNYC – Constrained on 40’ chassis due to volumes.
• USLAX/USLGB – Pool of Pools seeing stressed chassis inventory in most terminal locations.

4. Railway Operations:

• Congestions at some terminals & rail ramps (imports):
• New York, NY – Average 5.3 days dwell from DIFU to transfer to MMR ramp (at MMR 4.6); total 9.9 days
• Long Beach, CA – Average 7.4 at port – Rail units, at ramp: 2.3 days; total 9.7  days 
• Los Angeles, CA – Average 8.1 days at terminal, at ramp: 2 days; total 10.1 days 
• Charleston, SC – Average 2.6 days at terminal, at ramp: 3.6 days; total 5.12 days 
• Savannah, GA – Average 4.7 days at terminal, at ramp: 2 days; total 6.7 days
• Norfolk, VA – Average 3.8 days at terminal, at ramp: 2 days; total 5.8 days

5. Cross Border Traffic (US/CA):

• No impact at this time.

6. Volume / Bookings Development (US/LGB/CANADA):

• Bookings are beginning to exceed the daily average.

7. Equipment Release (in Boxes): 

8. Equipment Inventory:

No Impact at this time.

9. Reinstated Sailings:

December:

Transpacific – West Coast

All PSW (including India leg for PS3) and PNW loops will maintain their weekly sailings in December.     

Transpacific – East Coast

All USEC loops will maintain their weekly sailings in December, except for in the following weeks:

• Week 50 – EC3 Void
• Week 52 – EC3 Void

January:

Transpacific – West Coast

All PSW (including India leg for PS3) and PNW loops will maintain their weekly sailings in January, except for the following week:

• Week 1 – FP1 TP leg void

Transpacific – East Coast

All USEC loops will maintain their weekly sailings in January, except for in the following week:

• Week 1 – EC3 void

In the 27 years of BOC International’s existence managing logistics supply chains and transpacific transportation, we have never experienced such turmoil, disruption, delay, cargo congestion, lack of capacity, lack of equipment, as we see today. Unfortunately, we are forecasting that it will become worse each day in the next two months. We think it is our responsibility to be transparent and share all market conditions with our customers. We are partners and need to communicate openly and tackle challenges together. As 2020 comes to a close, we feel we are approaching the nearest we have ever come to a logistical Apocalypse.

BOC would like to advise you of some observations we see in the marketplace to help you manage your supply chain.

• Despite the entire global fleet of ocean capacity being launched in the Transpacific Market, the backlog of tens of thousands of containers continues to grow larger each day.
• Empty Container availability in Asia is approaching a new record low, and containers are scarcer every day in most Asia origin ports.
• Container volumes in October jumped 23.7 percent from a year ago. Container volumes in November jumped 28.2 percent from a year ago.
• Globally, carrier on-time performance in October reached a record low of 52.4 percent. November on-time performance is approaching a new record low of 45%, as we wait for the final numbers to be calculated. The average vessel delay globally in October was 4.86 days. The average vessel delay globally in November was approximately 6 days.
• Containers are rolling over 25%-50% of the time, depending on the carrier. Particularly at transshipment ports, we see a high percentage of rollovers with cargo sitting 7-21 days.
• Many USA ports are overwhelmed with container volume, and some setting record volume months in the history of their port operations (Savannah and Virginia) in November. The heavy volume has caused tremendous delays to pick up cargo and drop off empties. Up to 20 vessels have been seen at anchor waiting to be unloaded in the LA/LB harbor.
• Excess demurrage and detention are being accumulated due to a lack of chassis, inadequate trucker capacity,  and terminal operation volume constraints. Cargo is difficult to pick up and drop off throughout the USA Ports and Container Yards.
• Multiple carriers have announced they will temporarily suspend the cargo’s acceptance from/to South China side ports via transit ports from 1/15/2021 to 2/23/2021. This policy of suspending feeder vessel service in South China will add to a further backlog.
• Carriers are reducing and in some cases eliminating the release of any new fixed-rate and spot rate bookings. We are also seeing some cargo that is already booked being canceled and encouraged to rebook at spot rate plus a premium surcharge.
• Transpacific container transportation costs have now achieved all-time highs. Costs are now 200%-500% higher than in May 2020. We see this trend continuing to at least March.

Please contact your BOC representative to guide you through these challenges. Together we will navigate the storm and find the best solutions to minimize the damage and satisfy your customers’ needs.

Section 301 Investigations of Vietnam

On October 8, 2020, USTR initiated Section 301 investigations into Vietnam’s acts, policies and practices related to (1) the importation and use of illegal timber and (2) currency valuation. These investigations could result in tariffs, quotas, or other restrictions on imports from Vietnam if consultations do not yield a successful resolution.

Importers of wood products from Vietnam in particular could be affected by any such restrictions. These and other importers now have until Nov. 12 to submit comments on the issues being examined in these investigations.

For assistance preparing and submitting comments, or additional information on the potential impact of these investigations, please contact Nicole Bivens Collinson or Kristen Smith.

For more information, contact your BOC Representative.

China Tariff Refund Lawsuit for List 3 and 4A Goods

There is still an opportunity for importers who have not yet filed a lawsuit in the Court of International Trade to challenge the Section 301 tariffs on List 3 and 4A for goods originating from China.

There is an argument that there was no sufficient time to file a claim for List 3  based upon the September 24, 2020 deadline. If interested importers are urged to file a claim as soon as possible. The claims for List 4A have a deadline of August 19th, 2021, but importers are encouraged to file at their earliest convenience.

If you have any questions or interest please contact your local BOC representative and they will be able to put you in touch with one of our partners to assist with your filing.

BOC Bullets to Help the USA Importer During the Current Shipping Crisis

After another challenging shipping week, here are some tips and market updates we wanted to share to help our customers deal with this current shipping crisis.

1. Instruct your factories in Asia to inspect all empty containers very closely when picking up and loading for any holes or signs of damage. Your vendor should follow the 7 point inspection guidelines (https://www.cbp.gov/sites/default/files/documents/7_pcic.pdf) and take detailed pictures of the inside and outside of the container, including capturing the container number in the photos. This inspection process is your best protection to help your cargo from getting water damage. With a shortage of containers, many Container Yards are releasing lower grade containers that might not be seaworthy and leak water on your cargo.

2. Consider using the premium ocean services for urgent cargo. We see even spot rate ocean cargo (which generally gets priority) being rolled at origin or stuck at transshipment ports for one to three weeks. In the past 45 days, the ocean carriers are rolling approximately 1 of 3 all containers in the Transpacific market.

3. Plan for 1-2 week delays of availability for arriving cargo to the USA because of record volumes, lack of chassis, slow unloading and loading of vessels at the congested origin and destination ports, and extreme global trucking shortages. We have seen some USA truckers refuse to accept delivery orders from their regular USA import customers for 2-4 weeks. The delays unloading the vessels arriving LA/LB are being exacerbated by a shortage of stevedores at LA/LB terminals due to additional gangs being assigned for each shift because of the full ships, larger ships and extra loaders being deployed. One notable volume record was the Port of LA reported their largest container month ever in September – 888,625 TEU – and no blank sailings.

4. Ship essential goods early, well before the Chinese New Year holidays begins on February 12th. Door to door delivery times are expected to continue to be delayed well into 2021, and Asian bookings remain very strong with November space almost entirely consumed. We are also seeing Shipping Orders (SO’s) being released very late by the ocean carrier just prior to vessel cutoffs. The ocean carriers are intentionally delaying the SO’s to enable them to capture as much as possible of the higher-priced premium cargo and delay shipping the lower-priced fixed cargo to maximize their profits. Overall, market capacity is continuing to worsen. Due to lack of charter vessels and equipment shortages, the carriers so far have deployed an inadequate amount of TP November extra loaders with COSCO only adding three sweepers in weeks 45, 46, and 47 to USWC and Maersk providing some limited relief with Suez service transshipping over Europe to the USEC.

5. Prepare for higher air freight costs in the coming weeks. There are substantial rises in air freight prices on major lanes out of China and other parts of Southeast Asia, as surges in demand meet continuing constrained capacity due to Covid’s devastation of the PAX market.  The simultaneous deluge of air freight caused by the launches of new versions of products(Apple’s 5G phones, Microsoft’s Xbox, Sony’s PlayStation, etc.), growing demand for 2nd wave PPE items, and a final push to move holiday gifts creates the perfect storm.

Please contact your BOC representative to help you with these issues or any other specific problems. We will get through this crisis together.