Authorities at West Coast ports expect that congestion will lessen.
Port officials expressed optimism that as summer approaches, the congestion that has beset cargo loading and unloading facilities along the West Coast will lessen. However, it is unlikely that port operations will return to normal completely before August, when already record-high import volumes will start to grow seasonally ahead of the vacations.
Meanwhile, exporters of US agricultural products complained that ocean carriers were reluctant to load US agricultural exports in order to speed up the return of empty containers, and importers of containers loaded with consumer goods—including food and food ingredients grown or manufactured in Asian and Pacific nations—were delayed in reaching American importers for transportation to markets across the United States.
The explosion in e-commerce purchases by American consumers in the last several months of the pandemic resulted in container volumes that overwhelmed workforces on the docks, in warehouses and on truck routes in between that have struggled with illnesses and absences because of the COVID-19 pandemic. It was expected these workforce problems will abate as more workers are vaccinated.
Some US ports have never been busier. The Port of Los Angeles, the largest container port in North America, was experiencing record volume. The port processed 799,315 containers, 20-foot equivalent units (TEUs), in February, a 47% jump compared with February 2020. It was the seventh consecutive month of year-over-year increases in volume and the strongest February in the port’s 114-year history.
“One year ago, global trade slowed to a crawl as the COVID-19 pandemic first hit China and then spread worldwide,” Gene Seroka, executive director, Port of Los Angeles, said in a March 16 press briefing. “Today, we are in the seventh month of an unparalleled import surge, driven by unprecedented demands by American consumers.”
Mr. Seroka noted in February 2021 loaded container imports at the Port of Los Angeles reached 412,884 TEUs, up 53% from 270,025 TEUs in February 2020. But loaded container exports totaled 101,208 TEUs, down 25% from 134,469 TEUs in February 2020.
“Global trade slowed to a crawl as the COVID-19 pandemic first hit China and then spread worldwide,” said Gene Seroka, executive director of the Port of Los Angeles, during a news briefing on March 16. The unprecedented import boom that has been driven by historically high demand from American consumers is currently in its seventh month.
In February 2021, the Port of Los Angeles received 412,884 TEUs of loaded containers, up 53% from 270,025 TEUs in the same month the year prior, according to Mr. Seroka. But loaded container shipments were only 101,208 TEUs, down 25% from 134,469 TEUs in February 2020.
“Truck times, or how long it takes a truck driver to enter and exit the port in order to drop off and pick up containers, have dropped from 88 minutes back in December to 77 minutes,” Mr. Seroka stated. “So, some of the trending in the right direction is beginning to show.”
Mr. Seroka underlined the significance of immunizing every member of the port workforce in order to hasten progress.He clarified, “Every day, more than 100,000 people come to work here at the port complex.” “We’ve made great progress (in vaccinating) with our longshore and dock workers, but we still have a long way to go with truck drivers, warehouse workers, and other workers.”
Additionally, Mr. Seroka stressed the significance of importers retrieving their products as soon as possible.
Then, he added, “we can increase fluidity much more quickly.” “80% is considered full capacity in our industry, and our tarmacs are about 90% full.”
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The biggest annoyance for exporters of agricultural products in recent months has been the challenge of securing containers, which are increasingly being returned across the Pacific empty.
Peter Friedmann, executive director of the Agricultural Transportation Coalition, clarified in a recent interview with DC Velocity that maritime carriers decide whether to have containers returned empty based on the money they stand to make on cargo sent from Asia to the United States. Asian commodities exporters to the US pay $6,000, $8,000, $10,000,and occasionally as much as $14,000 in freight charges for a container headed for the US, according to Mr. Friedmann.
Mr. Friedmann went on, “US agriculture exporters have to compete with producers from all over the world.” “We are unable to cover those freight costs. Those export containers are carrying agricultural goods that is headed for Asia, so the value of the cargo is not very great. As a result, the ocean carriers’ export earnings for shipping the goods westward to Asia are closer to $400, $800, or at most $1,400 to $2,000. Therefore, ocean carriers are returning the containers empty and choosing not to ship cargo outward across the Pacific due to financial considerations.
Members of Congress and US agricultural organizations put pressure on the Biden administration to guarantee that US agricultural exporters receive equitable treatment from ocean carriers.
The Agriculture Transportation Coalition, along with 70 other food and agriculture organizations, wrote a letter to President Joe Biden on February 24 that was copied to Secretary of Transportation Peter Buttigieg, Secretary of Agriculture Tom Vilsack, Chairman of the Federal Maritime Commission (FMC), and Chairman of the Council of Economic Advisers, Michael Khouri. The letter also stated that “according to their own public records, the ocean carriers are enjoying their most profitable period in decades by controlling capacity and charging unprecedented freight rates, imposing draconian fees on our exporters and importers, and frequently refusing to carry US agricultural products.”
For the first time, the groups clarified, “These refusals and charges by the ocean carriers dramatically increase costs to our exporters, rendering foreign sales inefficient and uneconomical.”
The groups asserted, “The Shipping Act provides the FMC with the authority to prohibit unreasonable, unjust practices and ‘to promote the growth and development of US exports through competitive and efficient ocean transportation.’ Given the urgency of this situation in commerce, we ask that these tools and any others available to our government be immediately applied to stem the current ocean carrier practices that are so damaging our agriculture exports.”
Roger Isom, president and chief executive officer, Western Agricultural Processors Association, who signed the letter addressed to the Biden administration, recently told Ag Net West, “There’s been movement from the Federal Maritime Commission. They’re definitely taking a deeper dive into investigating what the shipping companies are doing, but it’s very bureaucratic. They’re telling us it’s going to take weeks before any answers come back. We don’t have weeks. This thing has been going on for months.”