Why can’t container ships sail in a bottleneck in California ports?

There are no signs of shipping around the breathtaking reserves of container ships at the clogged ports of Los Angeles and Long Beach.

The new arrivals are expanding to a record-breaking fleet waiting to unload cargo, which reached 73 on Sunday according to the Southern California Stock Exchange, nearly double the number a month ago, and expanding the fleet, which has become a sharp sign of shipping. disruptions and delays that are reversing global supply chains.

Before the epidemic, it was unusual for more than one ship to wait at a port.

Experts say large ships continue to join the bottleneck as shipping companies and their cargo customers have little opportunity to rebuild the myriad supply chains that transported goods to the United States that have been built for decades around the critical San Pedro Bay gateway it has now eroded. the overflow. demand for imports.

Although some ships headed for other import gateways and a handful of shippers chartered smaller ships to transport goods through other ports, the diversion is small compared to the hundreds of thousands of containers empty in the waters off Southern California.

“It all aligns with LA,” said Nathan Strang, senior commercial lane manager for ocean operations at the San Francisco-based forwarder Flexport Inc.

This year’s congestion was caused by a surge in imports as consumer demand in the U.S. shifted to goods and home renovations instead of services, and retailers rushed to replenish inventories that were depleted in the first months of the epidemic last year.

Neighboring California ports are the U.S.’s main gateways, thanks to the growth in container traffic over the past 60 years and the explosive growth in trade in goods, especially U.S. trade with China. Last year, the two ports handled the equivalent of 8.8 million loaded import containers, more than double the 3.9 million loaded boxes that arrived in the country’s next busiest port, New York and New Jersey.

The ports of California are close to China and factories that produce a wide range of large quantities of electronics, clothing and other consumer goods. They have enough land to accommodate dozens of cranes capable of unloading large ships as well as widespread terminals for storing boxes.

Container ships outside the port of Oakland. Smaller ports, such as Oakland and Seattle, can handle a fraction of the containers processed in the ports of Los Angeles and Long Beach.


Photo:

Justin Sullivan / Getty Images

For major retailers in Los Angeles and Long Beach, the ports offer quick access to one of the country’s largest population centers. This means they can split incoming goods between a large local consumer base and rail connections that provide continuous, direct transportation to the rest of the United States through domestic hubs, with most of the boxes passing through Chicago.

Despite some shortages, the availability of means of transport, storage space and labor is also much higher than in other ports.

According to shipping drivers, other ports on the West Coast, such as Oakland or Seattle, are simply not large enough to handle the hundreds of thousands of containers Los Angeles and Long Beach unload, store and transport by truck or rail every week.

“It would only take a very small portion of LA / Long Beach to congest these ports,” said Craig Grossgart, senior vice president of global ocean operations at Seko Logistics, an Itasca, Ill. based carrier.

According to the leaders, the demand is so high that shippers are willing to go into the country on almost any route to replenish their stocks in time for the holidays.

“We use all available ports,” said Sri Laxmana, vice president of global ocean products at CH Robinson Worldwide. Inc.,

is the largest freight broker in North America.

Some shippers have shipped cargo to U.S. Gulf and East Coast ports, but this alternative also comes at a cost as it increases transit times from Asia by weeks and longer routes are more expensive than shipping to the West Coast.

“Shipping to the East Coast was a big secret for those who gave advice in the early stages of the crisis,” said Bjorn Vang Jensen, vice president of global supply chain for Danish-based marine data company Sea-Intelligence ApS. “But the secret has been revealed, and now these ports are just as twisted as the other ports because everyone wants to go there.”

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In recent weeks, 20 or more ships have been anchored in the port of Savannah and have been waiting for a berth. Griff Lynch, executive director of the Georgia Ports Authority, said he expects congestion to last for at least a few more weeks as the shipping peak season continues.

“This has never happened before,” he said.

Companies that transported risks through alternative ports roared in other ways over the congestion in Southern California.

An average of 30 container carriers a day are stranded outside the ports of Los Angeles and Long Beach and are just waiting to ship their goods. The backlog is part of the global supply chain turmoil caused by the pandemic, which means consumers may experience delivery delays of weeks. Photo compilation: Adam Falk / The Wall Street Journal

Malouf Cos., A Utah-based furniture retailer based in Logan that began shipping some of its goods through Port Houston a few years ago, is now struggling to get containers because hundreds of thousands of boxes are floating on ships waiting to be unloaded in Los Angeles. and Long Beach.

Jordan Haws, Malouf’s director of supply chain, said he would have about 55% of the company’s inventory if he had full inventory.

“It’s a vicious circle we’re stuck in, and until this harbor gets to the top of things, I don’t see things stabilizing in cross-Pacific trade,” he said.

More from the logistics report

Write to him Paul Berger at Paul.Berger@wsj.com

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