The backlog of ships in the west coast port shows the breakdown of the maritime supply chain

  • There have been delays in processing vessels at terminals within the Port of Los Angeles and Long Beach.
  • A shipping expert told CNBC that current vessel wait times are breaking ‘normal’ and a ‘stressed’ maritime supply chain not seen since the Covid spike returned.
  • The Department of Transportation and the Biden Administration are said to be closely watching developments at West Coast ports as trade groups from retail to manufacturing warn of economic damage and urge the Biden administration to to intervene.

Tugboats guide the Mediterranean Shipping Co. (MSC) container ship Mia as it arrives at the Port of Los Angeles in Los Angeles, California, U.S., on Wednesday, April 1, 2020.

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The number of vessels docking at the Port of Los Angeles and Long Beach is rising as slowdowns at West Coast port terminals have affected supply chain operations from trucking to rail and ocean carriers.

On Wednesday, six vessels were delayed in the Port of Los Angeles, while two vessels in the Port of Long Beach were anchored upon arrival, unable to interact with port operations, according to a vessel update announced by the Marine Exchange of Southern California. and Vessel Traffic Service, Los Angeles and Long Beach.

MarineTraffic data shows that ship problems are moving from isolated to more widespread. Over the past two and a half months, average wait times in Anchorage in Los Angeles were half a day to a day and a half, with an average service time of two to five days.

At APL’s Los Angeles terminals, docked ships now occupy space for nine days.

“This indicates that we are past ‘normal’ and are back in a stressed maritime supply chain,” said Capt. Adil Ashiq, director of MarineTraffic for North America. He said these ships have yet to be loaded/unloaded and shipped, which is critical to make room for the next wave of ships heading to Los Angeles. “The domino effect can be a bit hard to swallow considering we’ll have slack imports and slack exports,” he said.

One of the ships waiting to enter the Port of Los Angeles on Wednesday was the MSC JEONGMIN, whose journey was documented using CNBC supply chain heatmap data provider MarineTraffic, and was an early example of how the Increased labor problems in West Coastal ports were beginning to affect shipping operations. The ship, which was carrying items including tires for Tesla, IKEA furniture, food from Trader Joe’s, wine from Europe, porcelain tile and granite slabs, left the port of Oakland on May 31. She was later seen hanging around for a day before the ship arrived in Los Angeles. , but when the ship arrived on Wednesday, she turned around and rescheduled to arrive later that day.

In the Port of Los Angeles, the CMA CGN Lyra has been in dock since May 31; CMA CGM Amerigo Vespucci has been there since June 1. At the Ports America Terminal, the YM Unicorn has been berthed since May 31 and One Hangshou Bay has been berthed since June 2.

When vessels go off schedule, the delays delay arrival at additional ports, affecting container deliveries and ultimately contributing to container congestion, which was seen in extremes during the Covid pandemic.

Vespucci’s next stop is Oakland, which also has boats stuck due to labor issues that led to closures late last week. The contents of the containers for Oakland are already overdue for arrival. These developments come as shipping enters its peak inventory building season before back to school and the holidays, a period that runs from July to October. While overall demand is expected to be relatively subdued given the economic environment and slowing consumer demand, West Coast ports have been making up volume they lost to East Coast ports over the past year. , as uncertainty in ongoing labor negotiations led shippers to divert activity.

Port operations are critical for both trucking and rail, which are the land-based industries affected if containers cannot move efficiently. Container import activity has been improving, but export processing was still very high on Wednesday. Earlier this week, Union Pacific had to temporarily pause its ramp activity at California ports. While Union Pacific lifted that pause on Wednesday, ITS Logistics raised its freight rail alert level to ‘red’ this week, posing a serious risk.

The National Retail Federation issued a statement earlier this week urging the Biden administration to intervene in ongoing labor talks between the Longshoremen and Warehousemen International Union and the Pacific Maritime Association, which represents West Coast ports. .

On Wednesday, the National Association of Manufacturers sent a letter to President Biden and Transportation Secretary Pete Buttigieg describing current port conditions as “closed or significantly disrupted” across the West Coast and calling on the administration to intervene.

Trade groups have warned of inflationary spikes due to further supply chain setbacks, though overall, global supply chain costs are down much from Covid peaks, according to the Managed Global Supply Chain Index. by the New York Federal Reserve.

Throughout the recent rise in labor tensions, some unionized workers have refused to report for their shifts, while others have been removed from work by port management. The volatile situation at the ports continued on Wednesday, with CNBC saying that the SSA Terminal at the Port of Seattle furloughed union crews working on the ships for the third day in a row due to “low productivity.” In maritime terms, a terminal can “lay off” a crew of workers for a shift if they perceive work to be slow and the workers can return the next day. The terminal at the Port of Tacoma continues to operate, despite reports of 50% labor productivity.

Secretary Buttigieg and General Stephen Lyons (who is the supply chain envoy for the Biden-Harris administration’s Supply Chain Disruptions Task Force) have engaged with the parties for more than a year as they negotiations were progressing, and they have encouraged all parties to work in good conditions. faith to come to an agreement.

The Biden administration and Congress intervened late last year to prevent a freight rail strike that could have shut down the national economy.