Shipping Companies Look at Sailing Away From Choked Southern California Gateways
Some container lines and their importing customers are looking for alternate paths to get around bottlenecks at the main U.S. trade gateways in Southern California, where an armada of cargo vessels is anchored offshore at the congested seaports.
Shipping lines have started moving some operations to smaller ports and have canceled some sailings altogether to avoid the backups that have tied up dozens of ships and hundreds of thousands of containers stuffed with goods off the ports of Los Angeles and Long Beach.
France’s CMA CGM SA, the world’s fourth-largest container operator by capacity, said it was replacing a weekly six-ship service from China to Los Angeles with a separate sailing to Oakland, Calif., and Seattle.
Food is piling up in all the wrong places, thanks to carriers hauling empty shipping containers.
Global competition for the ribbed steel containers means that Thailand can’t ship its rice, Canada is stuck with peas and India can’t offload its mountain of sugar. Shipping empty boxes back to China has become so profitable that even some American soybean shippers are having to fight for containers to supply hungry Asian buyers. Strikes in Argentina have also boosted Asian demand for U.S. agriculture products, adding to competition for boxes.
“People aren’t getting their goods where they need them,” said Steve Kranig, director of logistics at IM-EX Global Inc., a freight forwarder that handles cargoes including rice, bananas and dumplings from Asia to the U.S. “One of my customers ships 8 to 10 containers of rice every week from Thailand to Los Angeles. But he can only ship 2 to 3 containers a week right now.”
The Los Angeles port is expecting to handle 155,000 inbound containers next week, 80% more compared to a year earlier, according to Bloomberg. The vessels floating off the post have a capacity of 300,000 containers.
Ships wait from several days to around two weeks to gain access, according to Bloomberg. The ship that is first in queue arrived on January 16 with over a dozen container ships expected to arrive this week.
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The ship congestion has become a problem that doesn t have a short-term fix CEO of SeaIntelligence Consulting in Copenhagen Lars Jensen told Bloomberg.
The waiting time could end depending on whether the carriers maintain scheduled sailings to the US or cancel some trips in the upcoming period, according to Bloomberg.