#114 – Inside Our Industry – Only 8 Ships Waiting off Southern California

Posted on | Inside Our Industry

It has been a while since we shared some port activity updates, but last week a headline on freightwaves.com caught our eye. We have been used to seeing a backlog of container vessels waiting for berths at the ports of Los Angeles and Long Beach. Now, a different port on a different coast has a backlog.

Only 8 ships waiting off Southern California — but 41 off Savannah
Greg Miller, American Shipper, August 30, 2022

And then there were eight. That’s the number of container ships waiting for berths at the ports of Los Angeles and Long Beach on Monday, the lowest tally since the early stages of consumers’ COVID-era buying spree. The epic container ship traffic jam that was once a highly visible symbol of the supply chain crisis has now almost vanished.

It’s a different story for North America as a whole, however. The number of container vessels waiting offshore of all ports has remained roughly steady at an extremely elevated level throughout this month, at around 130 ships.

LA/LB: Relief offshore, still strained onshore

“The last day we had eight container ships [waiting off Los Angeles/Long Beach] was Nov. 15, 2020, in the early days of the backup,” said Kip Louttit, executive director of the Marine Exchange of Southern California.

The norm before the pandemic was for no ships, or at most one, to be waiting. The queue first began to climb in October 2020.

The number of ships off Los Angeles and Long Beach hit an all-time high of 109 on Jan. 9. At this time last year, there were 48 container vessels waiting offshore, almost six times more than there are now.

(Chart: American Shipper based on data from Marine Exchange of Southern California)

Although conditions off the shores of Southern California are approaching pre-COVID normality, conditions at the terminals are not. Landside conditions are improved versus the peak, but the numbers are still unusually high.

As of Monday, there were 50,176 empty containers at the Port of Los Angeles. That’s well below a short-lived spike to 90,397 in late November, but it’s same number of empties as in late February.

Persistent shift to East and Gulf coasts

The unwinding of the queue in Los Angeles/Long Beach appears partly driven by easing import demand and partly by a shift in volumes to East and Gulf coast ports. That shift is believed to be driven by shipper concerns over peak season congestion in Southern California and the expiring West Coast port labor contract.

As a result of the coastal shift, shippers are paying higher rates for transport that’s taking longer than scheduled due to port queues.

The Freightos Baltic Daily Index for China-West Coast spot cargo has fallen 29% over the past two months. The China-East Coast spot index has dropped only 10%.

As of Tuesday morning (August 30, 2022), there were still 130 vessels waiting (at U.S. coasts): 41 off Savannah; 24 off Houston; 19 off New York/New Jersey; 14 off Vancouver, British Columbia; 13 off Oakland, California; eight off Los Angeles/Long Beach; seven off Virginia; and four off other ports. West Coast ports accounted for only 27% of the total.

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