As many container vessels continue to loiter across Southern California and farther, waiting for berths at the ports of Los Angeles and Long Beach — the focal points of the American import economy – there has been a consistent increase in transit time between Chinese-base ports and the West Coast ports. Transit time data is measured from the time a container departs from the port of origin until it is discharged at the destination terminal.
Data from Shifl shows transit times have gone up steadily since the summer of ‘21, with transit times in December across the ports of Los Angeles and Long Beach recording 45 days. On average, transit times across the West Coast ports have risen by 96% since May ‘21. This is 181% higher than a pre-pandemic transit average that stands at 16 days between major Chinese ports like Qingdao, Ningbo, Shanghai, and Yantian to the ports of Los Angeles and Long Beach.
Comparatively, the port of New York has fared better in recent weeks, dropping its transit time from 44 days in the third week of November to 33 days by the second week of December.
A consistent increase of incoming vessels could be one of the reasons for increased transit times. Large numbers of ships continue to pile up in the ports of Los Angeles and Long Beach with some ships slow steaming on their way to USA in order to reduce the time they spend at anchor close to the ports of Los Angeles and Long Beach, waiting for a berth. California regulations now warrant vessels to wait far from the shore to mitigate near-shore pollution that has risen due to the queuing ships.
While transit times have kept climbing, landside port operations have seen a reversal, fortunately. Container dwell times have been consistently falling since late October across the West Coast, which coincides with the announcement of additional tariffs on long-dwelling containers at the Los Angeles and Long Beach port terminals. Though the tariff enforcement date kept shifting over November and is yet to be implemented, the warning seems to have served well for hauling long overdue containers out of the port.
This is reflected in the gate-out data tracked by Shifl. The gate-out metric measures the time of discharge of the container at the arrival port to it being gated out of the port premises.
Since mid-October, the Port of Long Beach saw import container dwell times drop from 12 days to 5 days currently which is a 140% improvement, while the port of Los Angeles recorded a 125% improvement with import container dwell times dropping from 9 days to 4 days currently.
The port of New York has consistently managed to keep container dwell times low, with it never going beyond 6 days since May ‘21, bringing it down to 3 days now a 67% reduction in since mid-October.
“We need to stop the ripple effect of ships waiting endlessly at Los Angeles/Long Beach even if it means diverting some ships to other ports like New York/New Jersey which is currently recording a quicker transit than West Coast Ports, optimising the use of some terminals which are underutilised and operate only till 4 pm.” said Levy.
“Regardless of how well we manage to perform in the ports, the continued influx of ships restricts them from performing optimally as they only have a certain capacity. This further ends up rippling into new blank sailings as the current sharp uptick in pricing out of China shows.” added Levy.
Impact of congestion on freight rates
The high number of ships stuck off the coast of Southern California and further, is impacting freight rates which were starting to drop. As per data tracked by Shifl, the freight rates are on the rise again and this is attributed to the increased demand for space out of China brought about by the lack of ships to load cargo on as the ships are still waiting in Los Angeles/Long Beach.
“Once all these ships return to Asia, we are hopeful that rates will come down again and we might have an opportunity to get out of the repeat ripple effect as we get into the traditionally quieter months post Chinese new year,” added Levy.
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