Domino effect of LA/LB congestion

08 Dec 2014
US congestion trouble could impact Asia, says SeaIntel

US congestion trouble could impact Asia, says SeaIntel

The Los Angeles/Long Beach (LA/LB) port complex has been suffering from congestion for the past few months and is beginning to take its toll on the industry as a whole, says SeaIntel.

According to the maritime market analyser, schedule reliability into the West Coast ports has declined by more than 40 percentage points year-on-year, while the port called after POLA/POLB has seen a decrease of 50 percentage points.

“Congestion in the LA/LB port complex is a significant challenge for both carriers and shippers as it has a tremendous impact on the shippers’ supply chains and the carriers’ networks involving a considerable increase in costs,” said Alan Murphy, chief operating officer and partner, SeaIntel.

SeaIntel says its latest figures revealed the congestion situation has definitely worsened from August to September, but especially from September to October. “All our findings support this troublesome development as the schedule reliability declined further from September to October in both the LA/LB port complex, but also in the following port a vessel calls, and the number of average days late has also increased considerably,” Mr Murphy added.

Despite this, a spokesperson for the Port of Long Beach (POLB) told Port Strategy:“This morning’s report shows no Port of Long Beach vessels waiting outside the breakwater for a berth – that’s the first time in a few weeks.”

But, in a bid to help ease the problem, a number of carriers have begun to temporarily suspend port calls – notably Hapag-Lloyd and the G6 carriers, which announced this week they will temporarily suspend the eastbound call in Los Angeles on their PA1 service with effect from Singapore Express. So far, the suspension has been agreed for four consecutive weeks.

SeaIntel says this, in turn, could lead to problems in further afield, as carriers transport necessary empty containers on the back haul from the US West Coast to Asia.

“If the carriers skip port calls into Los Angeles and Long Beach to a certain extent, it could have a negative effect on the repositioning of empty containers from the Californian ports to Asia, and could potentially mean that at some point we would see a shortage of equipment in Asia,” Mr Murphy concluded.

 

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