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Port Congestion in Los Angeles and Long Beach October 2014
10/31/2014
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Port Congestion in Los Angeles / Long Beach

Dear Colleagues / Agents,

We have experienced an increase in operational problems at the port of Los Angeles / Long Beach since about February/March of this year. Starting from August/September, the situation at the port in LA/LGB has progressively deteriorated and since the last week of September, the crisis has virtually grid locked each and every marine terminal in Los Angeles / Long Beach. In addition, we have seen in the past 10 days up to 11 vessel being at anchor waiting for berths to become available. The average vessel arrival for the past few days has been delayed by approx. 5 to 7 days.

There are many reasons that caused this severe port congestion. Here are some of the highlights:

- Chassis shortage & dislocation of chassis being at the wrong place at the wrong time

- Pending renewal of the ILWU union contract with the PMA which had expired on July 1st

- Delay tactics by the ILWU longshore men union

- Raise in imports from Asia to North America, in particular to the United States

- Bigger ships coming on line which take longer to discharge & reload

- Space shortage at the marine terminals which often cause containers being held up for several days in enclosed areas which are not accessible

- Late arrival / delays of vessel due to lake of berthing docks

- Shortage of skilled ILWU longshore men union labor

- Insufficient off-dock storage & chassis repair facilities

- Extra safety checks of chassis recently implemented by the ILWU union which resulted in an increase of chassis being flagged for repair

- Shortage of drivers in the container drayage industry (i.e. lots of port drivers have quit their job and moved on to long distance routes where the revenue is better)

The impact of the port congestion is on all levels of the day-to-day operation at the port and beyond. On the import side, it often takes 7 to 14 days until we can finally get access to the containers at the marine terminal and often the availability window will flip from one hour to the next which makes it impossible to plan ahead plus dry runs are the norm right now. On the export side, we have recently seen some incidents where the carriers were forced to leave export containers behind at the terminals as they were stored in enclosed areas as well as first receiving dates being moved day by day which often results in additional yard storage, chassis rental and per diem charges on the container equipment. Waiting times for drivers at the port of 4 to 6 hours are not uncommon at all.

So far all attempts by the port community to resolve the port congestion have failed and it only worse! There is a ripple effect on the entire supply chain in the United States.

Our current recommendation is to stay away from Southern California ports and to look around for alternate routes via U.S. East/Gulf and Canadian West Coast ports as the port congestion situation will not get better any soon. Most likely, some of the vessels that are currently enroute from Asia to LA/LGB might start to be diverted to other discharge ports soon - say that they will omit Los Angeles / Long Beach and perhaps discharge in ports such as Oakland or even in transshipment hubs in Mexico and Panama, until the situation will improve and the containers can be transferred back to LA/LGB.

Please be advised that most trucking companies have increased their rates and most of them will not take on any new accounts either. FCL deliveries in carrier's haulage through the shipping line are impossible to manage & control.

The overall frustration over the port congestion will continue to rise and the best way to mitigate the impact is to avoid shipping any cargo by ocean freight to/from LA/LGB, until the situation will get better.

Our ocean export & import team has put in a lot of extra efforts and overtime recently to assist our customers and agents with the current situation, but quite often, we are in the mercy of the terminals and other factors which are beyond our control.

Please feel free to contact us prior to shipment by ocean freight via Los Angeles / Long Beach, so that we can evaluate the current situation on a case-by-case basis and recommend a tailor made solution. It's easier for us to provide alternatives in advance, rather than being put before facts and try to rescue the situation.

Thank you!

Best regards, Reto Kaufmann

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