Los Angeles Port Chief Sees Labor Deal by Early Next Year

By Sarah McGregor and Matthew Winkler (Bloomberg) — The chief of the busiest US West Coast port expects a new labor contract for dockworkers in the region to be reached by…

By Sarah McGregor and Matthew Winkler (Bloomberg) — The chief of the busiest US West Coast port expects a new labor contract for dockworkers in the region to be reached by...

Enhanced ship routing key to US-Singapore low-carbon corridor

Shippers and carriers are increasing the pressure on ports and other supply chain participants to roll out “green corridors” using digital technology.

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A trans-Pacific trade lane between Singapore and Southern California will use enhanced routing technology to help convert it into a corridor aimed at speeding deployment of low- and zero-carbon container ships.

The “green and digital shipping corridor,” a partnership between the Maritime and Port Authority of Singapore (MPA) and the ports of Los Angeles and Long Beach, is part of a wider Green Shipping Challenge initiative unveiled at the 27th United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, earlier this month.

Included in the green corridor partnership is C40 Cities Climate Leadership Group, a network of international mayors committed to limiting rising average global temperatures.

“Reducing greenhouse gas emissions in the maritime supply chain is essential, and this trans-Pacific partnership will help us build a network of ports and key stakeholders to help decarbonize goods movement throughout the Pacific region,” commented Port of Los Angeles Executive Director Gene Seroka.

The green corridor connecting Los Angeles and Singapore builds on a similar low-carbon corridor partnership announced in January by the ports of Los Angeles and Shanghai, major hubs on one of the world’s busiest container shipping routes. Similarly, Singapore, Los Angeles and Long Beach are hub ports and considered “vital nodes on the trans-Pacific shipping lanes and key stakeholders in the maritime sector’s green transition,” according to the corridor partners.

“While we don’t have as much container volume moving between our port complex and Singapore, it’s probably the biggest fuel bunkering hub in the Pacific,” Chris Cannon, chief sustainability officer at the Port of Los Angeles, told FreightWaves. “So we really wanted to begin to work with them because of the critical importance they play in fuels and bunkering for the entire trans-Pacific trade.”

Cannon said that up until the green corridor partnerships with Shanghai and Singapore, cutting air pollution centered around cargo-handling equipment, drayage trucks serving the container terminals, zero-emission locomotives moving in and out of the port, and low-sulfur fuel emission control areas that extend 200 nautical miles from the coastline.

“That’s where our focus had ended,” Cannon said. “But with the green shipping corridors, our focus is starting to be on what we can do to reduce carbon emissions along a ship’s entire journey.”

Untangling supply chains

To make that happen, the partners in the initiative will use digital technology, Internet of Things (IoT), and cloud-based computing to improve how cargo is transferred, Cannon emphasized.

“The plan is to identify the most direct and efficient routing for the ships and the most efficient way to track and provide advance notice of where cargo’s going, so that when it’s picked up, it can be picked up quickly, with advanced staging in place so that you can plan for things like customs clearance, freight forwarding and [drayage] appointments,” he said. “If we can reduce the number of times a container is touched, that reduces the amount of overall activity associated with the movement of that container, which means less fuel used which generates less carbon emissions.”

While carriers presumably always seek the most efficient routing to reduce fuel costs, electronic data interchange within various sectors of the supply chain has been lacking, according to Peter Zimmerman, North American software sales manager for Vormittag Associates, Inc., an enterprise resource planning company.

“If we know when a ship is due in at port, the port can be more efficient — whether that’s storing cargo or notifying the trucking or rail company,” Zimmerman told FreightWaves. “So it’s not just the green aspect of it. There hopefully will be an opportunity for cost reduction in the supply chain as well.”

Initiative has shipper, carrier buy-in despite costs

The strongest backers of the initiative are the cargo owners, according to Cannon. He noted that Amazon, Ikea and other retailers last year committed to purchasing ocean freight services powered only by zero-carbon fuels by 2040 because consumers increasingly are asking that the goods they buy are transported in a way that reduces their carbon footprint.

“They’re telling the shipping lines, if you want my business, you better get yourself a low-carbon ship because, if you don’t, someone else will,” he said.

Container ship operators A.P. Moller – Maersk, CMA CGM, COSCO Shipping Lines and Ocean Network Express have signed on to the Shanghai corridor and are expected to commit to the Singapore corridor as well.

Cannon also acknowledged the low-carbon ships on order by some of the shipping lines are more expensive to operate.

“Cargo owners are willing to pay more if their cargo is moved in the manner they want,” he said. “And shipping lines are going to build the cost into their business plans because that’s what their customers want.”

No regulatory oversight — yet

The Federal Maritime Commission, which regulates international container shipping in the U.S., has been extracting information from carriers, shippers, ports and terminal operators to figure out how to improve data flow in an effort to speed cargo through the supply chain.

Cannon points out, however, that the green and digital initiatives are so far voluntary with no mandates planned from regulatory agencies.

“The best way to get progress in reducing emissions in shipping is to start voluntarily and use incentives to encourage the use of these types of fuels and participate in these corridors,” he said.

At the same time, he said, regulators are interested and supportive.

“The IMO [International Maritime Organization, the U.N. agency responsible for regulating maritime shipping] is excited and wants to help us, and would like to help us with tracking our progress,” Cannon said. “FMC is interested as well, along with the [Environmental Protection Agency] and the [California Air Resources Board].”

The World Shipping Council (WSC), which represents container line shipping and which Cannon said also supports the Singapore initiative, wants to ensure that any regulations involving the adoption of low-carbon fuels takes into consideration “the total climate footprint from production to combustion.”

In a Nov. 21 letter to the European Union, which has proposed using an emissions trading system as a way to lower emissions from global shipping, WSC and its coalition members emphasized that when a price is set for fuel emission, “it is important that a fuel is not considered green if it has left a significant climate footprint during extraction and production,” stated Jim Corbett, WSC’s environmental director for Europe.

“Liner carriers are already investing in alternative fuels and technologies, and urge the EU to ensure policies are geared to accelerate investments in the necessary renewably derived fuels by adopting a full life-cycle perspective.”  

Click for more FreightWaves articles by John Gallagher.

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Zero ships waiting off Southern California, 59 off other ports

Southern California’s container-ship logjam is gone and congestion is easing at East and Gulf Coast ports.

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Not a single container ship waited offshore of the ports of Los Angeles or Long Beach on Tuesday. It was the first time the queue had gone to zero since October 2020, in the early days of the COVID-era consumer boom.

“The container-ship backup for the ports of Los Angeles and Long Beach has ended,” declared Kip Louttit, executive director of the Marine Exchange of Southern California, in a statement to the media. “It is time to move into a different phase of operations.”

The backup may be over in Southern California, but it’s not yet over for North America overall.

An American Shipper survey of MarineTraffic ship-position data and port queue lists showed 59 container ships waiting off North American ports on Tuesday morning, mainly along the East and Gulf coasts.

That’s still well above pre-COVID levels, when numbers were in the single digits. But congestion is clearly easing: The count is down 60% from the peaks earlier this year.

The rise and fall of the SoCal queue

The traffic jam of container ships off Southern California began garnering headlines in early 2021 and became emblematic of the supply chain crisis (see aerial video here).

Southern California’s ship queue shot to new heights in the second half of 2021. The extremely high number of vessels anchored and loitering in close proximity to each other in San Pedro Bay and the surrounding waters raised both safety and environmental concerns.

A new queuing system was launched on Nov. 16, 2021, to address those concerns. Instead of securing a spot on the waiting list on a first-come, first-served basis, inbound ships were assigned a so-called “Calculated Time of Arrival” (CTA) as soon as they sailed from their prior ports. Their position in line was dictated by the CTA, so they had no need to race across the Pacific and wait close by. Ships were urged to voluntarily wait outside port waters. Most loitered off the Baja peninsula.

The new queueing system didn’t do anything to reduce the number of waiting ships. The tally kept rising, hitting an all-time high of 109 container vessels on Jan. 9, 2022.

The numbers have been falling ever since, driven down by decreased import demand and a shift by shippers to East and Gulf Coast ports, partly due to concerns about the expiring West Coast labor contract.

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

Ships still in queue are there ‘by choice’

While Tuesday was declared the end of the backlog by the Marine Exchange, the backlog has effectively been over for the past three months.

Since Aug. 24, there has only been an average of seven ships in the queue per day. There have been three or less ships on multiple occasions.

The queue could build up again if there is a resurgence in import demand or some new supply chain disruption. Barring that, the count seems likely to hover at very low levels but not completely vanish, mirroring the single-digit counts seen since late August.

The reason is that the queuing system instituted in November 2021 will remain in place, with ships still assigned a CTA. Under this system, a ship is considered “in the queue” if its CTA is before the time the queue count is taken by the Marine Exchange. But unlike the situation during the supply chain crisis, ships are no longer in the same rush to dock at the moment their CTA comes up. (This also likely explains why the queue didn’t go to zero earlier.)

According to Louttit, “Ocean carriers, working together with their terminals, are sometimes choosing to arrive after their CTA … because it optimizes their vessel operations.” The queue used to exist because of supply chain bottlenecks. What’s left of the queue now exists “by choice.”

Queues off other ports are shrinking

Looking at all North American ports, the total queue reached a high of around 150 container ships in early 2021, with most waiting vessels off West Coast ports, primarily Los Angeles/Long Beach.

The overall count declined through the spring as the Southern California backlog eased. Then queues began to build off East and Gulf Coast ports as shippers directed more cargo away from the West Coast.

The North American queue rebounded to around 150 in late July, this time driven by queues off the East and Gulf Coast ports.

East and Gulf Coast port congestion has gradually eased over recent months. New York/New Jersey and Houston have significantly reduced ship backlogs.

Ship positions as of Wednesday morning. (Map: MarineTraffic)

As of Wednesday morning, the largest East Coast backlog was off Savannah, Georgia, with 28 vessels waiting. There were 11 ships off the coast of Virginia, one off New York/New Jersey and one off Freeport, Bahamas.

On the Gulf Coast, six container vessels waited off Houston and one off Mobile, Alabama. On the West Coast, Oakland, California, had the largest queue, with nine ships waiting. Another two vessels waited off Vancouver, British Columbia.

Click for more articles by Greg Miller 

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October Imports at Port of Los Angeles Plunge to Lowest Level Since 2009

Imports through the Port of Los Angeles crashed 28% in October to the lowest monthly level in more than a decade. Cargo volumes at the Port of Los Angeles started…

Imports through the Port of Los Angeles crashed 28% in October to the lowest monthly level in more than a decade. Cargo volumes at the Port of Los Angeles started...

Los Angeles imports keep sinking as East Coast gains more ground

The head of Los Angeles’ port is on a worldwide sales blitz, trying to convince shippers and carriers to come back.

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The Port of Los Angeles reported yet another month of falling volumes on Tuesday, as the import pendulum continues to swing away from the West Coast and toward container shipping gateways on the East and Gulf coasts.

Los Angeles’ total throughput for October came in at 678,429 twenty-foot equivalent units, down 25% versus October 2021.

Imports totaled 336,307 TEUs, down 28% year on year.

It was the lowest October import tally since 2009 amid the global financial crisis and the lowest monthly imports since May 2020 at the height of the COVID lockdowns. This October’s imports were down 14% from October 2019 prior to the pandemic.

On a positive note, the huge month-on-month slide seen in Los Angeles in September has slowed. Imports fell 15% in September versus August. October’s imports declined only 7,155 TEUs (i.e., a single shipload) or 2% versus September.

(Chart: American Shipper based on data from Port of Los Angeles)

During Tuesday’s news conference, Port of Los Angeles Executive Director Gene Seroka said carriers “blanked” (canceled) 20 sailings in October, removing about 25% of normal service. An additional 20 sailings have been blanked in November and December combined.

“November numbers will be soft, and so will December,” Seroka acknowledged.

‘We need to get labor peace’

Seroka blamed “the steep decline” on three factors: a lack of a West Coast port labor contract, an early peak season and lower consumer spending on durables compared to purchases during the pandemic.

Both Seroka and Los Angeles Mayor Eric Garcetti repeatedly highlighted the labor issue during the news conference. The previous West Coast port labor agreement expired on July 1.

Seroka said that he has been on a “whistlestop tour” and “knocking on doors,” speaking to shippers and carriers in the U.S., Asia and Europe and “looking to get that allocation back to Los Angeles.” But he admitted that “it starts with getting a labor agreement … where they can feel that certainty of the cargo flow and getting to market on time.”

Garcetti stressed “we need to get labor peace and an agreement done.” However, he insisted “there will not be a strike. I don’t say this as someone trying to market [Los Angeles], but the remaining issues are so much more minor than in past years when we’ve been able to resolve this.”

Regarding the cargo shift to the East Coast and the Port of New York/New Jersey recently unseating Los Angeles as America’s busiest port, Seroka said, “We’ve been in the No. 1 position here for 22 consecutive years, and one or two months [in second place] is not going to create a trend. Our dwell times have improved and the ship backlog is nearly gone. We’re eager to ramp volume back up.”

Long Beach month-on-month decline worse than LA’s

Declines in Los Angeles were mirrored in the neighboring Port of Long Beach, highlighting the pressures facing West Coast ports.

On Thursday, Long Beach reported a 24% year-on-year drop in imports to 293,924 TEUs. It was the port’s lowest import number in any month since April 2020 at the beginning of the pandemic. It was Long Beach’s lowest import total for the month of October since 2012 and was down 13% from October 2019, pre-pandemic.

(Chart: American Shipper based on data from Port of Long Beach)

October imports sank 48,747 TEUs or 14% in October versus September, a much steeper month-on-month decline than in Los Angeles.

East Coast ports take more market share

The import picture at East and Gulf Coast ports remains in stark contrast to the situation at West Coast ports. These ports are still near their all-time highs.

On Monday, Savannah, Georgia, reported October imports of 263,828 TEUs, its second best monthly total ever behind the record reached in August. It was the port’s best-ever October for imports, up 2% year on year and up 32% from October 2019, pre-COVID.

(Chart: American Shipper based on data from Georgia Ports Authority)

Savannah posted an increase of 53,461 TEUs or 25% in October versus September, when imports were depressed by the Hurricane Ian closure.

In its monthly release in October, the port said it expected to clear its anchorages by the end of November. That is proving too optimistic: As of Tuesday, there were still 33 container vessels at anchor off the coast of Georgia.

The Port of Charleston in South Carolina also reported its October throughput on Monday. Loaded imports came in at 121,305 TEUs, up 13% year on year, 7% month on month and 27% versus October 2019, pre-pandemic. It was Charleston’s best October for imports ever and its fifth-highest monthly import total. 

(Chart: American Shipper based on data from South Carolina Ports Authority)

Click for more articles by Greg Miller 

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After steep September slide, US imports stabilize in October

Imports remain 7% higher than pre-pandemic levels, with volumes steadying last month after September’s plunge.

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The outlook for U.S. imports looked ominous in September, when volumes plummeted double digits, both year on year and compared to August. If imports had continued to collapse at September’s pace, they would have sunk below pre-COVID levels in October.

But imports didn’t continue to plunge in October, according to data released Monday by Descartes Datamyne. Last month’s volumes were effectively flat versus September. The reversion toward pre-pandemic volumes is taking a more gradual path.

According to Descartes, U.S. ports handled 2,220,331 twenty-foot equivalent units of imports in October, up 0.8% versus the month before. Volume was down 13% year on year yet still up 7.2% versus October 2019, pre-COVID.

(Chart: Descartes. Data source: Descartes Datamyne)

Savannah rebounds, NY/NJ pulls back

September’s plunge was driven by exceptionally large declines at the ports of Los Angeles and Long Beach, California, and Savannah, Georgia. In October, Descartes reported much smaller month-on-month drops at the two California ports: 9,241 TEUs in Long Beach (down 2.7% versus September) and 12,105 TEUs in Long Beach (down 3.9%).

Savannah was a special case. September volumes were pushed down over 20% by the Hurricane Ian closure. The latest Descartes numbers show an increase of 11,958 TEUs or 5.3% for Savannah in October versus September. (Descartes derives its data from customs filings; its numbers differ from official port numbers that are released later each month.)

In addition to Savannah, month-on-month gains were recorded for Houston; Charleston, South Carolina; Oakland, California; and Seattle and Tacoma, Washington.

The biggest surprise in the numbers was a large drop for New York/New Jersey, which recently surpassed Los Angeles to become America’s busiest container port. According to Descartes, New York/New Jersey imports fell 26,972 TEUs or 6.3% in October versus September.

East Coast delays still high but easing

Shippers have shifted significant volumes from West Coast ports to East and Gulf Coast ports due to concerns over West Coast port labor negotiations. A new labor contract has still yet to be negotiated, more than four months after the last one expired.

Bookings to East Coast ports far outpace the national average. Index: 100 = January 2019. Green line: bookings to Savannah. Orange line: to NY/NJ. Blue line: national average (Chart: FreightWaves SONAR)

This shift led to a drop in vessels at anchorage or loitering offshore of West Coast ports and a rise of ships waiting off the other coasts.

According to American Shipper surveys of MarineTraffic ship-position data and port queue lists, the total number of ships waiting off North American ports rose to around 150 in January and then fell below 100 in the spring as the Los Angeles/Long Beach queue cleared. It then rebounded back over 150 in late July, driven by queues off the East and Gulf coasts. 

Since then, as inbound volumes have declined, queues have gradually cleared. The tally fell below 100 by mid-October. As of Tuesday morning, there were 87 ships waiting, 14% off the West Coast and 86% off the East and Gulf coasts. That’s still very high: Pre-COVID, the number was in the single digits.

Descartes data on average port delays shows the same divergence between the coasts.

This data shows that the average delays at the top five West Coast ports fell 40% from January through October. In contrast, average delays in the top ports on the other two coasts fell at half that pace — by 20% — over the same period.

Top 5 West Coast ports: Los Angeles, Long Beach, Oakland, Seattle, Tacoma. Top 5 East/Gulf Coast ports: NY/NY, Savannah, Charleston, Houston and Norfolk, Virginia. Delays defined as days between estimated arrival date on bills of lading and processing date by U.S. Customs of bills of lading (Chart: American Shipper based on data from Descartes Datamyne)

Click for more articles by Greg Miller 

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Port of Los Angeles Took a Beating in September

Imports at the Port of Los Angeles fell by a dramatic 27% in September as retailers sit on high levels inventory on shelves and in warehouses, the nation’s top container…

Imports at the Port of Los Angeles fell by a dramatic 27% in September as retailers sit on high levels inventory on shelves and in warehouses, the nation’s top container...

Container imports to Los Angeles and Long Beach are plummeting

Southern California ports are being hit by double-digit import drops as the COVID-19 cargo boom winds down.

picture showing Port of Long Beach, where container imports are dropping

September is usually a strong month for West Coast imports as U.S. companies bring in their year-end holiday goods. Not so in 2022.

On Wednesday, the Port of Los Angeles reported its lowest import total for September since 2009, amid the Great Recession. The day before, the neighboring Port of Long Beach posted its weakest import total for September since 2016.

Imports to Southern California ports are falling fast because shippers have shifted volumes to East and Gulf coast ports, fearing disruptions from West Coast port labor negotiations. Simultaneously, volumes are now pulling back nationwide due to falling demand.

Holiday imports ‘dropped precipitously’

“In the month of September is where the real story lies,” explained Gene Seroka, executive director of the Port of Los Angeles, during a news conference on Wednesday. 

Earlier this year, imports of durable goods bought heavily during the pandemic — furniture, appliances, etc. — began pulling back. In September, declines were heavily driven by reductions in holiday goods, as well.

“September is traditionally a high-volume month for end-of-year products,” said Seroka. “Think toys and games, clothing, footwear and other products. Those holiday gift items dropped precipitously compared to last September, mainly because they came in earlier. This year our peak season was in June and July, as savvy importers moved up the arrival of these goods to bring some certainty back to when they could get to market.”

Commenting on the shift to East and Gulf coast ports, Seroka said “concern over the dockworkers labor contract negotiations [was] a major factor contributing to volume declines.” He believes the shift “is likely to continue until a West Coast labor contract is in place — and that can’t happen soon enough.” The previous contract expired July 1.

Asked by American Shipper how October’s volumes are shaping up versus September’s, he said they will be “probably about the same or a little bit lighter. It’s going to be a soft October.”

LA September imports down 15% vs. August

The Port of Los Angeles reported total throughput of 709,873 twenty-foot equivalent units in September, down 21.5% year on year (y/y). Exports came in at 77,680 TEUS, up 2.6% y/y, while empties totaled 288,731 TEUs, down 19.8% y/y.

Loaded imports to Los Angeles totaled just 343,462 TEUs, down 26.6% y/y. Imports fell 15.1% sequentially versus August, following a 16.7% drop in August versus July.

Los Angeles’ imports reached their highest level this year in May. September imports were down 31.3% compared to that month. Imports in September were the lowest for any month since May 2020, when the U.S. was in the midst of COVID-19 lockdowns.

chart showing container imports to the Port of Los Angeles
(Chart: American Shipper based on data from the Port of Los Angeles)

Long Beach September imports down 11% vs. August

The Port of Long Beach reported total throughput of 741,823 TEUs for September, down 0.9% y/y. Exports came in at 112,940 TEUs, up 1.9% y/y, and empties totaled 286,212 TEUs, up 7% y/y.

Long Beach handled 342,671 TEUs of imports in September, down 7.4% y/y and down 10.9% sequentially versus August. As in Los Angeles, Long Beach’s imports peaked this year in May. September was down 27.5% from that high. Monthly imports have not been this low since June 2020.

(Chart: American Shipper based on data from the Port of Long Beach)

Port of Long Beach Executive Director Mario Cordero blamed the import decline on consumer and retail concerns about inflation, “leading to warehouses filled with inventory and fewer product orders from Asia.”

Fewer ships being worked at berths

The focus during the supply chain crisis was on the massive number of container ships at anchorages or loitering offshore as they waited for berths in Los Angeles or Long Beach. Statistics from the Marine Exchange of Southern California show a steep drop throughout this year, from a high of 109 waiting container ships Jan. 9 to only seven Tuesday.

The Marine Exchange also collects data on the number of container ships at the berths in the two ports. This data also shows a major — and more recent — change.

As the supply crisis intensified, there were often over 30 ships at the two ports’ berths each day. Between August 2021 and February 2022, there were an average of 28.8 container vessels alongside in Los Angeles and Long Beach daily.

In recent weeks, however, the numbers have sunk to much lower levels. The average from Sept. 1 through Tuesday was 19 ships alongside, down over 30% from peak levels. There were 18 ships at the ports’ berths Tuesday. There were only 10 ships alongside on Sept. 12.

This is getting closer to pre-COVID levels. The average number of ships at the ports’ berths daily in full-year 2019 was 14.8.

Booking index down sharply in May-October versus Jan.-.April. 100 = January 2019. (Chart: FreightWaves SONAR’s Container Atlas)

Click for more articles by Greg Miller 

Container-ship logjams off US ports finally easing as imports fall

Declining imports have led to fewer container ships waiting off ports, injecting more capacity into the market, a negative for spot rates.

maps showing container ship backlogs

The good news is that there were fewer than 100 container ships stuck waiting off North American ports on Friday. The bad news is that there were still 99 container ships offshore and the pre-COVID norm was in the single digits.

There’s still a long way to go to clear the backlog. But the current tally is now back to June levels and 35% off recent highs.

The number of ships waiting off North American ports peaked at around 150 in January, with waiting vessels almost entirely off the West Coast. The queue fell through the spring as Los Angeles and Long Beach, California, improved their cargo flows. It rebounded back to over 150 in late July, propelled by traffic jams off East and Gulf Coast ports. It has gradually declined since then.

According to an American Shipper survey of MarineTraffic ship-position data, together with the latest queue lists from California ports, there were 27 container vessels off the West Coast and 72 off the East and Gulf coasts as of mid-day Friday.

East and Gulf Coast ship queues

Savannah, Georgia, continues to have the largest queue, with 29 container vessels waiting. That’s well below the peak: In early August, Hapag-Lloyd reported 48 ships waiting off Savannah.

Georgia Ports Authority Executive Director Griff Lynch said Thursday that “easing of demand should help U.S. ports address vessel backlogs” and that Savannah expects to clear its queue by the end of November.

Lynch said that the number of containers now on the water en route to Savannah is down 22% from July highs. Bookings data on cargo bound for Savannah from FreightWaves SONAR shows a similar drop from July levels.

Index of bookings bound for Savannah from all destinations based on date of departure. 100 = January 2019 (Chart: FreightWaves SONAR)

The second-largest queue in North America is off Houston. As of Friday, there were 17 vessels waiting, down from the mid-20s last month.

Elsewhere off East and Gulf coast ports, there were 14 container ships waiting for berths at the Port of New York and New Jersey, seven off the coast of Virginia, two off Florida, two off New Orleans and one off Charleston, South Carolina.

West Coast ship queues

Meanwhile, the ship backlog off the West Coast continues to dwindle.

There were eight container vessels in the queue off Los Angeles/Long Beach. On Thursday, there were only six, tying the record low hit three times previously in the past three weeks. Los Angeles/Long Beach used to be the epicenter of the container-ship traffic jam, with a peak of 109 vessels waiting on Jan. 9.

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

There were 13 ships waiting for berths in Oakland, California, on Friday. The queue off Vancouver, British Columbia, was down to six, with none waiting off Seattle/Tacoma.

Imports, queues and spot rates

Assuming U.S. imports continue to fall month on month, ports should continue to bring down ship backlogs through the remainder of the year.

Data from Descartes and Panjiva showed that U.S. imports fell 12% in September versus August. Data from PIERS showed an 8.2% month-on-month decline.

As port queues wind down, vessel capacity that had been tied up waiting is released into the market. This increases effective vessel capacity and the number of slots available for cargo. To the extent this is not offset by carriers “blanking” (canceling) sailings or suspending services, declining port congestion creates downward pressure on spot rates.

Over the past week, Drewry’s index for Shanghai-Los Angeles spot rates fell another 13% to $2,619 per forty-foot equivalent unit. Its Shanghai-New York index declined 8% to $6,321 per FEU.

Rates have held up better on the East Coast trans-Pacific route, where port congestion has supported pricing to a greater extent than on the West Coast route. Drewry’s Shanghai-Los Angeles index is down 76% year on year, while its Shanghai-New York index is down 55%.

Weekly spot rate assessment in $ per FEU. Blue line: Shanghai-Los Angeles. Green line: Shanghai-New York (Chart: FreightWaves SONAR)

Click for more articles by Greg Miller 

Port of New York and New Jersey Claims ‘Busiest Port’ Title in August

The numbers are in. The Port of New York and New Jersey has officially surpassed the ports of Los Angeles and Long Beach to become the top container port in…

The numbers are in. The Port of New York and New Jersey has officially surpassed the ports of Los Angeles and Long Beach to become the top container port in...