BRi USA NEWS - Transpacific Shippers Woes Continue With Peak Season Issues


Dear all Valued Customers


“The ships are 100% full. The containers are 100% full. You can’t get a container built. You can’t pick up a ship from the spot market. The whole container-shipping cycle is at absolutely full pelt,” exclaimed Jeremy Nixon, CEO of Ocean Network Express (ONE), the world’s sixth-largest container line. October’s ocean container market is “unbelievable,” he said during an International Chamber of Shipping (ICS) virtual event last week.


Nixon's comments confirm many analysts' thoughts that volumes would relent after the China Golden Week holiday. However, it hasn’t happened yet, and the trans-Pacific market is still at its peak. The extended peak season came after the trade initially took a plunge with the onset of the COVID-19, yet consumer demand has remained high following the reopening of much of the economy.


Container levels across the Asia Pacific region are still facing constraints, but they are improving slightly.


While the situation is now somewhat more manageable, shippers can still expect to run into issues upon arrival at the West Coast. With the continued inbound volume surge and the lingering impact of the COVID prevention measures, the West Coast infrastructure is under severe pressure caused by a few key issues:


Port Labour: The labour demand in LA and Long Beach has now exceeded supply. Shortages of equipment operators continue. This impacts the sorting of cargo discharged from vessels in the container yards, and subsequently, the speed of trucker turn times as they plan to pick up full containers. Ships continue to remain at anchor waiting for entry to the port to be worked.


Chassis Shortages: Chassis continue to be in short supply since many containers are being used for import storage at terminals and warehouse yards. Providers are working overtime to repair chassis for use.


Drayage Capacity: Capacity is extremely tight on the West Coast, particularly through the Los Angeles/Long Beach port. This is due to a combination of not only volume surge, but also driver shortages and congestion at the port for trucks moving freight in and out.


Warehouse Labour: While warehouse labour levels are no longer the primary concern, the cost of labour has steadily increased in line with the need for stabilized production capacity. Warehouse operators also have incurred increased costs due to COVID prevention (PPE supplies, social distancing measures, etc.).


Warehouse Space: Space continues to be in short supply. The use of transload/cross dock options is strongly encouraged due to the minimal impact on space in the warehouse.


Canadian Ports Also Under Pressure


While experiencing the same increase in import volume, coupled with the longshoreman strike in Montreal, the Canadian ports of Vancouver, Prince Rupert and Halifax also have severe congestion. After the labour action in Montreal, over 1,800 containers were diverted to Halifax, something that the port was not prepared for and is still digging out of the backlog. Two extra loaders were recently deployed to take some of the containers back to Montreal.


Both Vancouver and Prince Rupert remain backlogged with vessel wait times increasing well above seven days at both ports, 11-12 days in some extreme cases in Vancouver. Both ports are at 100% yard capacity for storage and rail dwell times are near four days. While Vancouver’s crane project has completed and adding two usable berths, port officials do not expect the backlog of vessels to recede until mid-November.


While there are several factors affecting the Transpacific supply chain, one thing remains constant – much of the West Coast bound freight will likely experience delays at least for the next month.


Major U.S. Ports Status Update


Below is a general overview of the operations BRi USA has been able to gather for most major ports. This list will be updated as information is made available.


Port of Seattle and Tacoma – the Northwest Seaport Alliance (NWSA) is seeing an influx of imports as retailers restock inventories depleted during the COVID-19 pandemic and prepare for the holiday season. NWSA reported that it had its best month of 2020 in September and the highest total monthly containerized volume since October 2019. All terminals at the ports are open and operational this week.


Ports of Los Angeles/Long Beach – The congestion that has plagued the ports of Los Angeles and Long Beach in recent months is expected to worsen over the next two weeks due to a “record” level of imports. US imports from Asia moving through LA-LB increased 22 percent in both September and August from the same months last year. The surge in imports affects productivity at the 12 container terminals in LA-LB, chassis shortages, drayage capacity, and import distribution warehouses throughout Southern California. All terminals are open for normal operations this week.


Port of Oakland – The Port of Oakland reported that it had achieved its best September ever for import cargo volume. Containerized import volume in September also jumped 10.6% from the same month in 2019. The port also experienced a 5% year-over-year increase in exports in September. Through the first nine months of the year, full exports are down only 0.2% compared to 2019. All terminals are open for normal operations this week.


Port of Houston – Port Houston’s container activity in September surpassed the record level of TEUs for the same month last year, despite the negative impacts of the COVID-19 pandemic. This is the first turn toward growth since the effects of the pandemic in March. The strong increase last month was achieved despite closure of the Houston Ship Channel for about three days due to Tropical Storm Beta, though Port Houston’s terminal operations remained open to continue serving customers. All terminals are open for normal operations this week.


Port of New York/New Jersey – Container volumes at the Port of New York/Jersey have rebounded sharply, consistent with the elimination of most “blank sailings.” In August, the Port returned to 2019 levels, setting a new all-time monthly container record, including a new record for intermodal rail volume. Following the Golden Week celebration (October 1-8), just two blank sailings remain on Transpacific services calling on the Port of New York and New Jersey. Currently, projections indicate that container volume will remain strong for the rest of the year. The ports of NY/NJ are open this week for normal operations and gate hours.


Port of Virginia - The Port of Norfolk will receive $20.2 million for Norfolk International Terminals’ central rail yard expansion. The grant from the U.S. government will be used to construct eight working tracks and a working area for transferring and staging containers. The project will create a return access road that will separate rail dray traffic returning to the container yard from general truck traffic. All terminals are open and operational this week.


North Carolina Ports - The Port of Wilmington received $16 million from a U.S. grant program to build a new container gate that will increase throughput capacity at the port through the use of optical character recognition and weigh-in motion sensors technology that will allow drivers to enter and exit without stopping for processing. The proposed improvements also allow the port to streamline container traffic flow throughout the terminal and open up additional yard storage capacity. All terminals are open and operational this week.


South Carolina Ports - The South Carolina Port Authority has published their 2020 Annual Report featuring their financials, volumes, economic impact report and more. The Port also shares their plans for new business and infrastructure projects in 2021. SC Ports in Charleston, Greer and Dillon are operating normally for gates and vessels at this time.


Port of New Orleans - Gulf Stream Marine (GSM)'s newest breakbulk, bulk and project cargo terminal, located at the Alabo Street Wharf in New Orleans, began operations on October 7 and will be receiving vessels by the end of the month. The 12.5-acre terminal will handle steel and pipe, dry bulk, breakbulk general cargo, and wind and project cargo. Since 2018, New Orleans has invested about $50 million into its breakbulk wharves and facilities. All terminals are open and operational this week.


JAXPORT - The Jacksonville Port Authority reported that customers now have access to a new container service to the West Coast of South America through Ocean Network Express (ONE). ONE has added Rodman, Panama, as a port of call on its EC1 U.S. East Coast service, connecting JAXPORT’s TraPac Container Terminal at Dames Point in Jacksonville, Florida, to eight new destinations in South America: Guayaquil, Ecuador; Paita and Callao, Peru; Buenaventura, Colombia; and Puerto Angamos, Lirquen, San Antonio and Coronel, Chile. All terminals are open and operational this week.


U.S. Ag Exporters Dispute Unreliable Earliest Return Dates


U.S. agriculture and forest product exporters are counting the ways and dollars it costs them when ocean carriers without warning change the dates for container arrivals at marine terminals.


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As a valued customer, we hope that you will continue to trust us to source the best options for your supply chain needs now and into the future. Should you have any questions regarding USA News, please contact your Customer Solutions Representative.


Keeping you updated,

BRi Customer Solutions Team


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