The port congestion crisis in Southern California is not getting any better.
Trans-Pacific spot rates abate, the Biden administration unveils 24/7 policy, and the output from China diminishing due to electricity shortage, which have made the industry start to believe Southern California port congestion has turned the corner. Ironically, the number of ships at anchor or in holding areas once again hits the record, 79 container vessels are waiting off ports of LA/LB. Besides, the time ships are waiting offshore continues to increase, which may be a result of the lack of inland transportation.
Massive value of cargo stuck offshore equates to the annual revenue of McDonald’s.
According to Marine Exchange of LA/LB, the vessels waiting offshore on Tuesday, including container ships, general cargo vessels and other ships carrying containers, have accumulated a total capacity of 512,843 TEU, 10% more than the port of LA imported during the entire month of September.
The total custom value of the port of LA’s containerized in 2020 is $211.9 billion with the total volume of 4,827,040 TEUs. Which according to the Marine Exchange, amounts to an average of $43,899 per imported TEU. This suggests that the cargo currently waiting off the ports of LA/LB is worth $22 billion, roughly the equivalent of the annual revenues of McDonald, which is reported to be $19,208 million according to WSJ.
The wait time in the port of LA has risen to a new high, but that is not the full story.
Data from the Los Angeles Signal indicates that wait time from anchorage to a berth has risen to 13 days, up 65% from the beginning of September; however, the ships have been sitting in San Pedro Bay for more than twice that long.
Most of the vessels still having no terminal berth assignments go for small ships which enter the trans-Pacific market for the first time this year. Some of the ships queuing outside LA/LB ports even have been chartered at exorbitant rates, raising the question of whether charterers should account for such long waiting time.
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