Update on Trans-Pacific Ocean Service

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Update on Trans-Pacific Ocean Service



Update on Trans-Pacific Ocean Service

Unfortunately, the situation seems to be going from bad to worse. The ocean freight system for containerized cargo from Asia is being overwhelmed by a perfect storm of factors that is unprecedented. The current situation is as follows:

  • Much of the capacity at U.S. Marine terminals is jammed with import containers to be unloaded and distributed.

  • Multiple ships are anchored awaiting berth availability. Some 30 ships off LA/Long Beach with delays of up to 2 weeks or more are waiting to get a berth. Periodic bunching of vessels also occurs at other West and East Coast ports.

  • With ships backed up at U.S.ports, containers are slow to be returned for export and re-positioning to China and other Asian points

  • U.S. demand is still quite elevated but ocean carriers are now canceling sailings from Asia, simply because the vessels are not there to load and/or empty containers are not available. Many bookings are being rolled to later sailings.

  • Further complicating the congestion there has been a spike in Covid-19 cases among U.S. dockworkers. This has reduced the workforce, including those workers who have not tested positive but are isolating due to exposure, further limiting the production of the ship unloading

  • Even though carriers have tried not to reduce sailings during Chinese New Year breaks as they customarily do, space on vessels that are calling for the next three weeks is essentially non-existent, even at premium rates.

  • These ship and terminal conditions are naturally causing bottlenecks for truckers at both marine terminals and rail depots throughout the country. some ocean carriers are scaling back bookings for certain IPI services so smaller areas where there are reports of week or ore dwell times.

We continue to monitor the situation and work with our Asian partners to search for creative solutions. There are no easy or good, reliable answers at this time but occasionally bookings are no-shows or get canceled. We are encouraging early bookings if the cargo will be ready but this is subject to container availability, space, and rate confirmation at the time of shipping.

We know that the Federal Maritime Commission is looking at all this with an eye to help improve the situation and ensure carrier compliance with shipping regulations. There are also indications it will take at least until March or April to see the situation improve but as the domino effect continues this delays the time for resolution of the congestion. We all have to prepare for delays and increased costs and we will do our best to mitigate these unpleasant and unacceptable conditions.