And that pace is set to continue, according to Gene Seroka, executive director of the Port of Los Angeles. “I don’t see us falling off a cliff,” Seroka said. “I don’t see the American consumer changing their buying habits.”
For 18 months now, the Port of Los Angeles has received 900,000 container units per month. Pre-pandemic, just one month with numbers like that would have been a record.
“We’re running now about 17-18 ships a day that are working in port. That’s 70-80% higher productivity than we ever had before Covid-19,” Seroka said.
But although the volume coming into the ports remains at the same level as last fall, the seas outside of the ports of Los Angeles and Long Beach look different. Four container vessels are at anchor outside the Port of Los Angeles, while 10 remain anchored at sea
at near the Port of Long Beach as of Tuesday.
The parking lot of ships doesn’t exist anymore — but that’s because the ports have slowed the rate at which ships come in. Forty-five ships are slowly drifting toward the port of Los Angeles about 150 miles offshore. “It’s called port optimization. We don’t want [ships] sitting outside waiting for weeks on end,” said Seroka.
The port has directed larger retailers to be more strategic about what they send across the ocean, so that medium to smaller retailers can get the goods they really need.
“The system was gummed up because a lot of people on the larger side had gone from just ‘in- time’ inventory management, to ‘just in case.’ They wanted to get their orders into factories before their competitors did, they didn’t want to be the ‘paper goods person of 2021’,” said Seroka.
Seroka met with President Joe Biden and other transportation leaders at the White House in mid-October. Seroka says the economy was the President’s biggest concern and that Biden wanted “all hands-on deck and he wanted everybody open every day, as long as they could.”
Part of that was directing the ports of LA and Long Beach to 24/7 operations. But that never materialized because the demand for the 3am-8am hours wasn’t there.
But the proposed “container dwell fee” has had great impact. On Monday the two California ports announced they would put the fee on hold another week until January 10. The fee was announced October 25 to put pressure on retailers to pick up and return cargo containers to the ports faster in order to help with bottlenecks.
Since October the ports have seen a combined decline of 35% in “aging” cargo on the docks — and a 50% decline in Los Angeles alone.
“We saw the number of imports move off the docks into the domestic supply chain much more quickly, once we announced the threat of a penalty,” Seroka said.
The ports plan to charge $100 for containers dwelling 6-9 or more days, increasing in $100 increments per container per day until the container leaves the terminal.
The Port of Los Angeles is bracing for a “mini-peak” in the next month as factories in China race to finish shipments before they close for their Lunar New Year.
“We’re seeing cargo rushed out of factories onto ships and coming across the Pacific,” Seroka said. “And those landings will be complete probably [in the] back half of February here in Southern California,”