What Happened: The issue of backlogged cargo ships in Southern California’s busiest ports, Long Beach and Los Angeles has grown in recent weeks, creating a supply chain crisis
As a result of the COVID-19 pandemic, an increase in buying consumer goods that were further buoyed by stimulus funding has overwhelmed the ports, averaging about 900,000 containers per month since the summer of 2020. Proposed short-term solutions include convening with supply chain stakeholders to enhance system capacity, move towards a 24/7 operation, promote and share information, and closely monitor real-time system performance indicators through the Port Optimizer to assess the situation and develop policy and operational responses.
On Oct. 13, the Biden administration made a vow to expand port operations to address the problems accumulating amid an overwhelming demand for imported consumer products and a shortage of trucks, drivers, and warehouse workers. In addition, FedEx, and UPS, two of the U.S.’s biggest freight movers, have committed to significantly increase the number of goods they are moving at night.
The two ports take in 40 percent of the nation’s imported goods, and as of Oct. 19, there were 153 ships at anchor, berthed, or “loitering” outside of the ports, and more than 100 of those ships were containers, waiting to unload thousands of containers outside the ports. The backlog left ships drifting in the waters outside the ports for weeks, and the jam is expected to last into next year.
The average waiting time for a cargo ship to complete its process throughout the Port has doubled in the wake of the import surge. Before the surge, truck-bound cargo typically left the port terminals in less than four days. In addition, the lack of industrial storage space has posed a problem for the region.
On Oct. 25, it was announced that fines will be implemented for idling cargo ships. The fines and are designated to keep the supply chain moving.
What’s On Tap: On Nov. 22, the ports of Los Angeles and Long Beach announced they would once again be pushing back the start of a new fine for idling container ships. The container fee program started on Nov. 1 and was going to charge ocean carriers $100 per container; the fine increased by $100 per container per day until the cargo ship moved. The condition of the dwell fee is that containers that are ready for truck transport have nine days before fines begin to incur. After the allotted nine days expires, a $100 fine per container will be implemented with an additional $100 every day the container remains in the Port. In addition, containers destined to be moved by rail would be charged a fee if they sat on the docks for six days or more.
A second delay of fines was implemented after a meeting with U.S. Port Envoy John Porcari, ocean liner companies, and marine terminal operators; officials say the container dwell fee would remain on hold until Dec. 6.
The decision to delay the fines was determined by the cargo ship backlog contributing to a national supply chain problem. The amended container dwell fee was presumed to go into effect on Nov. 22 but was rescheduled to go into effect on Nov. 29 and then again to Dec. 6. The postponement comes after both ports have progressed, with significant improvements in clearing the bottleneck The ports of Los Angeles and Long Beach are now also receiving aid from Navy officials at the Port of Hueneme to unload at a smaller port in Ventura County.