www.zerohedge.com by TYLER DURDEN
By Greg Miller of FreightWaves,
There was fleeting hope that Southern California port congestion had turned the corner. The number of container ships waiting offshore dipped to the low 60s and high 50s from a record high of 73 on Sept. 19, trans-Pacific spot rates plateaued, the Biden administration unveiled aspirations for 24/7 port ops, and electricity shortages curbed Chinese factory output.
The reality is that the port congestion crisis in Southern California is not getting any better.
The time ships are stuck waiting offshore continues to lengthen. There are simply too many vessels arriving with too much cargo for terminals, trucks, trains and warehouses to handle. There were 103 container ships at Los Angeles/Long Beach terminals or waiting offshore on Wednesday, an all-time high.
Offshore, the number of ships at anchor or in holding patterns is once again nearing record territory. According to the Marine Exchange of Southern California, 70 container ships were waiting off Los Angeles and Long Beach on Monday, 67 on Tuesday and 71 Wednesday (not including other cargo ships that are loaded with boxes).
Massive value of cargo stuck offshore
Marine Exchange data shows that ships waiting offshore on Tuesday â including container ships, general cargo vessels and other ships carrying containers â had aggregate capacity of 512,843 twenty-foot equivalent units. To put that in perspective, that is 10% more than the Port of Los Angeles imported during the entire month of September.
Assuming ships are at capacity, how much cargo value is out there in the âfloating warehouseâ? Whatâs in each box, and its value, varies dramatically â it can be worth a few thousand dollars or several hundred thousand dollars. But Port of Los Angeles stats provide a good guide.
The total customs value of the Port of Los Angelesâ containerized imports in 2020 was $211.9 billion. Given that imports totaled 4,827,040 TEUs, this equates to an average of $43,899 per import TEU. (Several other sources also estimated average cargo value at around $40,000 per TEU.)
This suggests that the cargo currently waiting off the ports of Los Angeles and Long Beach is worth around $22 billion, roughly the equivalent of the annual revenues of McDonaldâs or the GDP of Iceland.
Imports trapped on ships for over a month
Data from the Signal platform shows that wait time from anchorage to a berth in Los Angeles rose to an all-time high 13 days on Wednesday, up 65% from the beginning of September.
But the average wait time doesnât tell the full story. Ships have been sitting in San Pedro Bay for more than twice that long.
Most of the vessels that still have no terminal berth assignments despite extended wait times are small ships operated by Chinese players such as BAL Container Line that entered the trans-Pacific market for the first time this year. Some of the ships stuck in the queue have been chartered at exorbitant rates, raising the question of whether charterers accounted for such lengthy delays.
American Shipper was contacted by a U.S. manufacturer who has over 100 containers of goods trapped aboard the Chinese-owned Zhong Gu Jiang Su. The ship has been waiting offshore for over five weeks, since Sept. 13, and has yet to obtain a berth assignment, according to the Marine Exchange master queuing list.
The U.S. manufacturer, who booked through a freight forwarder, spoke on condition of anonymity. âThis is really impacting our production,â he said, noting that the trapped goods are âa major componentâ in his companyâs manufacturing process.
âWe canât get any type of help or get any type of escalation from anyone,â he said. He was told that the ship operator âhadnât negotiated with the terminals for a berthâ before arrival, which led to the extended delay.
Among the Chinese-linked ships with no berth assignment stuck in the queue, the Martinique has been waiting the longest, since Sept. 9. Loadstar reported that it is on charter to Transfer, which is owned by a Chinese logistics provider that is in turn partially owned by Chinese e-commerce giant Alibaba.
The BAL Peace has been waiting without a berth assignment since Sept. 25, as has the S Santiago.
According to Alphaliner, BAL is chartering the S Santiago for around $125,000 a day. An industry source told American Shipper the rate was $135,000 per day. So far, that ship has been waiting â and not loading any more revenue-generating cargo â for 26 days straight.
