(October 14, 2014) Ports all across North America are working hard to handle an increase in the number of import & export containers while the industry continues to battle chassis availability issues, driver shortages, technology upgrades, rail delays, labor talks, and ever-increasing vessel sizes. To compound the situation, congestion at overseas ports has negatively impacted vessel arrival schedules resulting in further congestion and a perceived slowdown on working vessels at North American ports due to multiple vessels arriving at the same time.
During August, volume moving through the key West Coast ports of Los Angeles, Long Beach and Vancouver was up +7.6%, +1.0% and +4.5%, respectively, and in the last two weeks congestion has become more prevalent. According to the Journal of Commerce, some LA terminals are reporting dwell times of ten days versus the normal three days. Similar delays have been reported in Long Beach and Vancouver.
While some relief of the congestion may be anticipated as the peak holiday shipping volume draws to a close, the larger issues at the ports, including chassis availability and inadequate labor supply, are unlikely to resolve significantly in the near term.
Frequently Asked Questions to Combat West Coast Port Congestion:
Can we just re-route cargo via Canada, Mexico or the US East & Gulf Coast?
Odyssey does not advocate this because:
- US East and Gulf Coast ports will quickly become saturated with cargo that shippers are already attempting to re-route due to the existing congestion issues.
- Ports in Canada and Mexico may seem like a viable alternative to LA & Long Beach; however, Canadian ports are presently stressed and the rail connections into Mexico are not prepared to accommodate the increased volumes in a shift of this size. Furthermore, it is likely that these ports will do their best to first honor cargo that has traditionally moved via these ports in the past.
What can importers and exporters do to combat West Coast Port Congestion Issues?
- Consider increasing shipment lead times. Shippers who have year-end/quarter-end pushes may consider starting 2-3 weeks earlier in Q4 of 2014.
- Prioritize shipments. Customer shipments are likely to be prioritized over stock transfers.
- Communicate with overseas partners. Clear lines of communication will manage expectations and minimize frustration.
- Talk to reliable partners and carriers to provide sound and up-to-date information. Information provided by the media can be sensationalized; consulting with well-informed, objective partners will lead to the most rational recommendations and courses of action.
- If circumstances dictate, consider building additional supply at domestic or overseas facilities that are dependent on shipping via US West Coast and Canadian ports.
For up to date information on this issue please click here.