Not a single container ship waited off the ports of Los Angeles or Long Beach on Tuesday. It was the first time the queue had been reduced to zero since October 2020, at the start of the COVID-era consumer boom.
“The container ship backup for the Ports of Los Angeles and Long Beach is complete,” Kip Louttit, executive director of the Marine Exchange of Southern California, said in a statement to media. “It is time to move on to another phase of operations.”
Backup may be over in Southern California, but it’s not over yet for North America as a whole.
An American Shipper survey of MarineTraffic ship position data and port waiting lists showed 59 container ships waiting off North American ports on Tuesday morning, mostly along the east and Gulf coasts.
That’s still well above pre-COVID levels, when the numbers were in the single digits. But the congestion is clearly easing: the tally is down 60% from the peaks at the start of the year.
The Rise and Fall of the SoCal Queue
The container ship jam off Southern California began making headlines in early 2021 and has become emblematic of the supply chain crisis.
The Southern California vessel queue reached new heights in the second half of 2021. The extremely high number of vessels anchored and loitering close to each other in San Pedro Bay and surrounding waters raised to both safety and environmental issues.
A new queue system was launched on November 16, 2021 to address these concerns. Instead of getting a place on the waiting list on a first-come, first-served basis, incoming ships were assigned a so-called “calculated time of arrival” (CTA) as soon as they departed. their previous ports. Their position in line was dictated by the CTA, so they didn’t need to cross the Pacific and wait nearby. Ships were asked to voluntarily wait outside harbor waters. Most have wandered off the Baja Peninsula.
The new queuing system did nothing to reduce the number of ships waiting. The count has steadily increased, reaching an all-time high of 109 container ships on January 9, 2022.
Numbers have since fallen, driven by lower import demand and a shift of shippers to ports on the East Coast and Gulf, in part due to concerns over the expiry of the West Coast labor contract .
Ships still queued are there “by choice”
While Tuesday was declared the end of the backlog by the Maritime Exchange, the backlog has effectively been over for three months.
Since August 24, there has only been an average of seven ships in the queue per day. There have been three or fewer ships on several occasions.
The queue could rebuild in the event of a resurgence in import demand or further disruption in the supply chain. Other than that, the tally looks likely to hover at very low levels but not completely disappear, reflecting the single-digit tallies seen since late August.
This is because the queuing system instituted in November 2021 will remain in place, with ships still being assigned an AOC. Under this system, a ship is considered “in the queue” if its CTA is earlier than the time the queue count is taken by the Maritime Exchange. But unlike the situation during the supply chain crisis, ships are no longer in such a rush to dock the moment their CTA appears. (This probably also explains why the queue didn’t go to zero sooner.)
According to Louttit, “shipping carriers, in collaboration with their terminals, sometimes choose to arrive after their CTA…as this optimizes their maritime operations”. The queue existed due to supply chain bottlenecks. What’s left of the queue now exists “by choice”.
Queues from other ports are decreasing
Looking at all North American ports, the total queue peaked at around 150 container ships in early 2021, with most vessels queuing off West Coast ports, primarily Los Angeles/ Long Beach.
The overall tally declined in the spring as Southern California’s backlog eased. Then, queues began to form off East Coast and Gulf ports as shippers moved more cargo away from the West Coast.
The North American queue rebounded to around 150 in late July, this time driven by queues off East Coast and Gulf ports.
Port congestion on the east coast and the Gulf of Mexico has gradually eased over the past few months. New York/New Jersey and Houston have significantly reduced ship backlogs.
As of Wednesday morning, the biggest backlog on the East Coast was off Savannah, Georgia, with 28 ships on hold. There were 11 ships off Virginia, one off New York/New Jersey and one off Freeport, Bahamas.
On the Gulf Coast, six container ships were waiting off Houston and one off Mobile, Alabama. On the West Coast, Oakland, Calif., had the largest queue, with nine ships waiting. Two other ships were waiting off Vancouver, British Columbia.
Source: Freight Waves by Greg Miller, https://www.freightwaves.com/news/zero-ships-waiting-off-southern-california-59-off-other-ports