Imports are tumbling at the nation’s busiest container port complex even as the backup of ships waiting to unload there breaks records.
Combined inbound volume fell about 14% at the ports of Los Angeles and Long Beach, Calif., in December compared to one year ago, according to preliminary data from the ports. It was the fourth straight month of year-over-year declines.
That was even as the backlog of container ships off the coast of Southern California kept growing. The queue of vessels waiting to enter the port complex rose past 100 during December, according to the Marine Exchange of Southern California, and reached a record 109 ships in early January.
Shipping industry officials say the factors that triggered big bottlenecks earlier in 2021 persisted through December and have continued into 2022. Ships can’t unload quickly because terminals are full of containers. Truckers can’t pick up loads due to a shortage of drivers and the steel trailers used to pull boxes. Warehouses near the ports and at nearby logistics hubs are short workers and don’t have space for more deliveries.
Port congestion is a major worry for the Biden administration. The backups are exacerbating supply-chain delays and driving up shipping costs that are contributing to inflation reaching its highest level in decades.
A spokesman for the U.S. Department of Transportation said the ports have made progress in recent months in speeding up the movement of some import containers from terminals to truck yards and warehouses.
Rather than freeing up space, however, the boxes filling up the dockside terminals have been replaced with empty containers waiting for shipment back to Asia, said Jim McKenna, chief executive of the Pacific Maritime Association, which represents terminal operators.
Mr. McKenna said five to 10 of the roughly 35 ships at berths on a typical day aren’t being unloaded because terminals don’t have space to put the boxes. He said the congestion has gotten worse in recent weeks because of a surge of Covid-19 cases among longshore workers, truckers and warehouse staff.
So far this month, about 1,700 West Coast dock workers have tested positive for the virus. That is more longshore Covid cases than in all of 2021, Mr. McKenna said.
The slump in inbound volume in Southern California capped a year in which the port complex broke records with massive imports. In 2021, the two ports combined handled the equivalent of 10.1 million containers, according to port data, a 12% increase compared to the previous record set in 2018.
Some shipping industry specialists attribute the end-of-year declines, in part, to a supply-chain workforce that is worn out.
Jock O’Connell, an international trade adviser at research firm Beacon Economics, noted cargo volume at the complex surged in late summer of 2020 and remained high for the next year, peaking in May of 2021. “You’ve got a workforce that has been stressed out since the summer of 2020,” Mr. O’Connell said. “There is a point where there’s a natural limit in the number of containers you can continue to put through the supply chain.”
The backlog in Southern California has pushed importers to search for alternate ocean gateways. FedEx Corp. recently launched a charter service carrying up to 300 containers to Port Hueneme, Calif., a small gateway 80 miles up the coast known mostly as an import hub for bananas.
John McCown, a shipping industry veteran and founder of Blue Alpha Capital, said import volumes at Gulf and East Coast ports rose during the second half of this year as West Coast volumes declined, suggesting a shift to less congested parts of the country. Now, container ships are starting to back up at those ports too.
The Biden administration has tried for months to reduce backlogs, especially at Los Angeles and Long Beach which together handle about 40% of U.S. container imports. The White House announced in October that terminals in Southern California would operate around the clock to speed the flow of containers to manufacturers and retailers, but the initiative has failed to attract truckers. “We’ve had very few takers,” said Gene Seroka, executive director of the Port of Los Angeles.
Port of Long Beach Executive Director Mario Cordero cautioned that annual comparisons are complicated because import volumes at the end of 2020 surged to record monthly levels. Mr. Cordero said many of the recent initiatives to move greater cargo volumes need more time to take effect. “The question we need to ask ourselves is what if we did nothing?” Mr. Cordero said. “Things would have been much worse.”
Write to Paul Berger at [email protected]
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