Los Angeles imports slump further as congestion throttles volume

American Shipper has done a very nice article showing that LA/Long Beach is actually slowing down in throughput in the last two months or so. The graphs from their SONAR statistics show clearly that container processing is bottlenecked at those two ports.

It’s also true that both the port management at Los Angeles and Long Beach has emphasized the overall gains in 2021. But most of that was accomplished before the end of the year,and there has been a dramatic slowdown recently.

One issue that has only recently been mentioned is the large excess of empty containers at these two ports, waiting to be exported back to the Far East. These empties get in the way of unloading and loading real cargo.

Ocean carriers are recalcitrant about taking on the empties, as they don’t pay any fare. And it’s almost cheaper to build new containers in China for Chinese exported goods, than it would be to carry them back. So there is little economic incentive for those containers to be returned. And ocean carriers can’t be ordered to take them by any government.

One option for the ports of LA and Long Beach is to actually enforce fines per day on empty containers not taken by ocean carriers. These have been discussed previously and keep being passed on by the Port Boards.

Another option is for the Ports to declare that any empty container left in the port for more than some number of days will be scrapped for the steel, and the container owner charged for the cost of scrapping. The value of the sold metal could accrue to the port, or could be paid back to the original owner, according to the politics. I’d favor the port keeping the scrap money.

China has been accused of dumping steel in the US before. Now China is dumping fabricated steel in the form of containers. It’s not sustainable to have these boxes build up beyond a point where they interfere with import and export of real goods.

Greg Miller, Senior Editor Thursday, January 27, 2022

Los Angeles imports slump further as congestion throttles volume