Viewpoint: LA empty containers tell a compelling story

Equally important — 30% of all truck appointments are still not being filled each day. We must improve on this figure immediately.”

When comparing the share of empty exports to total twenty-foot equivalent units leaving the Port of Los Angeles, it is slightly higher than pre-pandemic levels. The ports of Long Beach and New York/New Jersey have seen approximately one-third of TEUs returning as empties.

But the clearing of the empty boxes can’t go fast enough. A look at RBC Capital Markets’ Port Heat Map, using data from Orbital Insight, shows the Ports of Los Angeles and Long Beach are dead last in the world in year-over-year performance.

“We found that container ship pricing leads dwell time,” said Michael Tran, managing director of digital diligence intelligence strategy at RBC Capital Markets. “As ship utilization increases, dwell time or discharge time at the port increases. Dwell time leads container ship pricing on the way down, given that the port congestion needs to dissipate before freight costs can taper.”

The number of vessels waiting at anchor off the coast of California is a glaring reminder of this.

“Peak season never stopped,” said Brian Bourke, chief growth officer of Seko Logistics. “This is a super peak or what we are now calling, quantum logistics. Regular supply laws no longer apply.”

SONAR’s incoming China exports last week into the Port of Los Angeles will not help in the clearing of the proverbial decks.

Tran tells American Shipper any estimate on a timeline for a return to normal is futile.

“Bottom-line utilization per ship is driving freight costs,” he said.

Paula  Bellamy, managing director of OL-UK, recently explained to clients that the container issue is really a lack of container-yard capacity both on and off the terminal. 

“How many containers can be stored at each terminal?” Bellamy said. “Keep in mind, once a vessel is discharged, the empties need to be returned and loaded on the next vessel. There are massive amounts of empty containers competing for space with import loads. The wait really depends upon the terminal and of course, who you ask. 

“Is there a port labor shortage? Not really. It is simply a space shortage.”