Port of L.A.’s Seroka on ‘Sustained Import Surge,’ Supply Chain Reaction

The Port of Los Angeles reported processing 890,000 TEUs (Twenty-Foot Equivalent Units) in July, up 4% from the same month last year, when U.S. consumer purchasing began building momentum.

Loaded imports for the month reached 469,361 TEUs, rising 2.9% from 2020. Loaded exports came in at 91,440 TEUs, falling 27.6% vs. the same point last year—the lowest number at the port since 2005.

Empty containers reached 329,999 TEUs, climbing 20.4% compared with last year “due to the continued demand in Asia,” the port said.

For the first seven months of 2021, overall cargo volume reached 6,318,675 TEUs, a jump of 36.8% vs. 2020.

Port of Los Angeles July Container Counts

“Warehouses are overflowing, rail yards and carriage are maxed out,” Seroka explained during an Aug. 17 port briefing. “Chassis and containers continue to be hard to come by. Ships are coming in and waiting at anchor to get worked, and factories are behind in orders, even though output is at record levels. This incredible sustained demand has everyone pushing at top speed, yet we still have much more work to do. With that, both anchorage and dwell times are trending in the wrong direction. Seventy-five percent of ships stop and anchor in July, up from 50% in June. But early data for August shows that 90% of arriving vessels are headed straight to the parking lot. Average wait time at anchor remains steady at five days in the month of July compared with a peak of eight days back in March. However, August anchorage times look to be increasing, and we’ll be watching this very closely. There’s a similar story on dwell times. The dwell on container terminals continues at its peak of about 5.3 days. On-dock rail time is running over 13 days, a new high. And the warehouses are filled, as we mentioned. Street dwell time is at about 8.3 days, close to its spring record of 8.8 days.”

Port of Los Angeles Executive Director Gene Seroka

Seroka also noted that the port is offering new tools to help improve throughput and efficiencies. Last month, in partnership with Wabtec, it launched “a long-term cargo volume predictive feature” of the Port Optimizer™ Control Tower data tool. Dubbed Horizon, it will help stakeholders “better plan and allocate resources.”

“Every aspect of the supply chain is under scrutiny today,” Seroka said. “And wherever we can squeeze just an ounce more productivity out of those [supply chain] nodes is what we’re going for. Much has been made of this notion of 24/7, but even if we work 24/7 here at the Port of Los Angeles, with warehouses full and with railcars, engine power at a premium, and the inability to move cargo out swiftly, where does it go? So, realistically speaking, even within the collective bargaining agreement with the dock workers and employers, we have the ability to flex shifts, get more work time out across the board by staggering start times, lunch times, end times and hand-offs. That’s all being worked on right now. In addition, we’ve got to match up the times with the other nodes of the supply chain. While the railroads traditionally work 24/7, we’ve got to be able to load those railcars off of ship work and combine that with two-thirds of our cargo that moves by truck out to the warehousing complexes from near-dock locations, all the way out to the I.E. and the desert communities. So, there’s a tremendous amount of coordination that must be done. All of us are talking. We’re trying to find those solutions. But workers are also at a premium in the warehousing business. We’ve had physical distancing requirements, and some leave the industry. Now with the Delta COVID variant, we’ve got again to look at our workforce in that particular community.”

BNSF President and CEO Katie Farmer

BNSF President and CEO Katie Farmer commented on 24/7 service in her recent response to the Surface Transportation Board inquiry on intermodal congestion. Among her comments: “[E]veryone across these logistics chains should operate on a 24/7 intermodal service basis, just like BNSF does and the other six Class I railroads. Too many players—like some ports and other terminals—have too many shut-down business hours.” For more Class I responses, see Railway Age Contributing Editor Jim Blaze’s commentary: “Why STB’s Inquiry Is a Public Service to Intermodal Shippers.”

Second-Half 2021 Outlook

Looking ahead, Seroka said the cargo forecast “remains strong through the balance of this year. We’re now officially at the start of the traditional peak season, and this year’s peak looks a lot like it has over the last 12 months: unrelenting consumer demand, imports competing for space and empties across the board.” Port Optimizer Signal data shows “heavy volume headed our way,” he said. “Even accounting for an uptick in anchorage numbers, we’re expected to do about 950,000 TEUs in the month of August. Please remember, though, last August we reached a high of 961,000 TEUs. The September forecast is currently in the 880,000 TEU range—about the same number of containers we handled last year.” Based on Horizon and other data, “we’re projecting the Port of Los Angeles will finish 2021 in the range of 10.5 million TEUs, but please note there are a lot of variables that play across our trading geography. Right now, we’re keeping a close eye on the developments in central China, specifically in Ningbo, which closed a marine terminal last week due to COVID-19.”

San Pedro Bay Port Complex (Photo courtesy of Port Authority of Los Angeles)

Seroka also commented on Union Pacific and BNSF, which recently temporarily paused or metered service to the San Pedro Bay and the impact of that move on the port. “I’m in contact with the leaders of both great companies on a regular basis,” he reported. “Pausing or metering trains from Southern California to Chicago was a difficult decision for both. At the time, UP had 25 miles of trains sitting outside their facility in Joliet, Ill. The BNSF at the same time had 22 miles of trains awaiting entrance. They’re responding to similar difficulties that the ports are around the world. Cargo is simply not being picked up fast enough. Combined, they made about 15% of our overall cargo volume that was paused as a result of those recent decisions. The dwell times on rail have increased because of this, but containers had no place to go. It was a tough call given the circumstances, but I think it was the right one, and we’ll move fast to keep this cargo moving.”

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