Los Angeles and Long Beach ports are paralyzed! It will last at least 3 months! 300,000+ containers are difficult to unload, and 21 voyages are canceled...

Recently, the Port of Los Angeles, the largest container port in the United States, and the adjacent Port of Long Beach are facing unprecedented congestion! In the past three months, Chinese sellers may face serious delays in shipping goods to the United States!

Recently, the Ports of Los Angeles and Long Beach are facing their biggest test in history! On January 20, it was revealed that nearly 700 dock workers at the Ports of Los Angeles and Long Beach were infected with the new coronavirus , causing a serious slowdown in the multi-billion dollar logistics economy of the two ports.

To make matters worse, thunderstorms hit the Los Angeles area on Saturday afternoon , causing hail in Woodland Hills and snow in mountain communities near Cajon Pass. A rare snowstorm also hit the coastal city of Malibu Canyon.

High winds and huge waves can wreak havoc on container ships on the high seas. On January 21, the Maersk Essen was caught in high winds and huge waves on its way to Los Angeles, and as many as 750 containers on board fell into the water and were lost. After the accident, the 13,100 TEU ship was forced to turn around and sail to Mexico.

Currently, there are 19 ships berthing at the Port of Los Angeles, and 14 waiting for berths outside the terminal. According to Nerijus Poskus, vice president of ocean freight at the US freight forwarder Flexport, in the past week, 300,000 TEUs were waiting to be unloaded at the port. This has a great impact on other markets where there is a clear shortage of containers. It is reported that this port congestion will last at least two to three months, or even four months.

The large number of container ships piled up near the beaches and Los Angeles is having a ripple effect on the entire container industry, creating uncertainty about when the market will return to normal, while shipping companies are planning to reduce trans-Pacific services.

Hapag-Lloyd will announce this week the cancellation of 21 sailings between Asia and North America in February, as a massive backlog of ships on the US West Coast is affecting shipping services. It is a decision that was made without any alternative due to delays.

In addition, CMA CGM has shut down its premium transpacific SEA-X service due to increased congestion at the Port of Los Angeles, which has affected delivery assurances, and plans to launch a new route between China and competing West Coast ports: Oakland and Seattle.

The SEA-X service provides shippers with a refund if a container is not shipped out of the Los Angeles terminal by the agreed date. Obviously, severe congestion at the Los Angeles port makes it difficult to guarantee on-time delivery.

In order to ease port pressure, the Port of Los Angeles will provide terminal operators with a financial incentive program totaling US$7.5 million to encourage increased container truck turnover rates.

The program will be implemented on February 1, and container terminal operators will receive compensation of US$0.50-2.75 per TEU if they reduce container truck shift times by 5%-20%. The compensation amount will increase with the degree of improvement.

If at least half of the container trucks unload empty containers at a terminal and take away a loaded container, the Port of Los Angeles will pay the terminal a subsidy of $0.40-1.40 per TEU depending on its operating speed.

“These practices are needed now more than ever to ease pressure on the supply chain due to the ongoing surge,” said Gene Seroka, executive director of the Port of Los Angeles. “When trucks move quickly, the port flows more smoothly.”

I hope this subsidy can improve the port congestion problem to a certain extent!

In addition to the cancellation of some voyages between the U.S. and Asia, due to the Spring Festival, many voyages to Northern Europe will also be cancelled , the time for picking up empty containers in China will be extended, and bulk cargo ships will start loading containerized cargoes.

2M Alliance partners Maersk and MSC plan to cancel three open sailings from Asia to North Europe in Weeks 5-7, with one vessel being allowed to be postponed to next week and retain existing bookings. Ocean Alliance member CMA CGM will also skip three sailings in the same period.

MSC said that “the cancellation of sailings is necessary due to the slowdown in demand during the Spring Festival and the severe congestion faced by the entire supply chain.”

Maersk advises its customers that in response to severe port congestion and container constraints, blanked sailings are needed to improve schedule reliability in order to free up these services to resume planned schedule measures.

Suspended sailings: Maersk Herrera on AE55/Griffin loop scheduled to depart Shanghai on February 11; Maersk Enshi (AE6/Lion) scheduled to depart Busan on February 13; Estelle Maersk (AE7/Condor) to depart Ningbo on February 15.

It can be seen that the current global shipping pressure is unprecedentedly large, and it will be difficult to reverse even in the next three months. The stocking pressure of foreign trade sellers has also increased sharply! At present, sellers are always paying attention to logistics dynamics. Stocking needs to be carried out through multiple channels and batches, and do their best to control risks!

(Source: FBA Information)