Terminal operators in Los Angeles-Long Beach this week are just beginning to dig themselves out from record container dwell times, a doubling of rail dwell times, and near-record truck turn times as a decline in containerized imports during the Lunar New Year lull kicks in. Port sources anticipate full recovery by mid-March.
The Los Angeles-Long Beach port complex, which handled more than 38 percent of US containerized imports in 2018, according to PIERS, a JOC.com sister product within IHS Markit, has struggled with terminal, rail, and truck congestion issues since late autumn. The Harbor Trucking Association (HTA) reported that truck turn times in January at the 12 container terminals averaged 98 minutes, the highest since March 2015, when average times hit 102 minutes while the ports were recovering from labor disruptions during West Coast longshore contract negotiations.
The Pacific Merchant Shipping Association (PMSA), which represents shipping lines and terminal operators, reported this week that container dwell times at the terminals in January averaged 4.32 days. “That is the longest average dwell time reported since PMSA began tracking data in May 2016,” it stated in a release. The dwell time was more than a day longer than in December and about 50 percent higher than in January 2018.
Carriers have deployed 34 extra-loader vessels since November to handle an unusual surge in imports as retailers and manufacturers front-loaded shipments to stay ahead of threatened Trump administration tariffs on more than $200 billion of imports from China. Compounding the issue, terminal operators were unable to deliver containerized imports to local distribution centers because the more than 1.5 billion square feet of industrial space was filled beyond capacity. Overflow containers were parked on chassis in the warehouse yards and wherever else space could be acquired, contributing to a severe chassis shortage in Southern California.
Just as troublesome was a doubling of rail dwell times at some terminals, with the idled containers taking up space not designed to handle those shipments. Long Beach Container Terminal (LBCT) was especially hard hit at its on-dock rail yard. When import volumes peaked, BNSF Railway containers experienced an average of five days dwell from the time they were removed from the vessels until the trains left LBCT. Union Pacific Railroad’s dwell times at their most severe were 10-12 days. LBCT president Anthony Otto said Tuesday the rail dwell times were coming down after a hectic few months. “At LBCT, we did our part by handling the extra-loaders. We pushed ourselves to the limit,” he said.
Total Terminals International (TTI) is experiencing four days’ dwell after discharge before BNSF pulls the trains from the terminal and UP is experiencing between seven and eight days, said Daniel Bergman, vice president of Long Beach operations. “We’re getting strong volumes, plus we’re getting hammered with empty returns. It’s the busiest we’ve been on westbound, with so many empties coming back,” he said. In addition, soybean exports have also begun to pick up, Bergman said. Relief is in sight, though, as TTI this week had three blank sailings from its shipping lines, he added.
Rail ripple effect
Harbor trucking delays were caused largely by conditions at the oversubscribed warehouses and distribution centers in Southern California. But the excessive rail dwell times rippled back to the West Coast from congested rail yards in the Chicago area and winter weather conditions in the upper Midwest and northern plains states, UP and BNSF stated in customer advisories.
“Our service challenges have stemmed from several inclement winter weather incidents, which began to impact operations in late January,” said Kenny Rocker, UP’s executive vice president, marketing and sales, in an advisory posted on Monday. “These incidents have required us to hold trains until crews restore safe travel through these areas. The impact of doing so is a drop in velocity and a slowdown of our network overall.”
A Feb. 19 customer advisory from BNSF cited logistics conditions at its Chicago and St. Paul, Minnesota, intermodal yards — Logistics Park Chicago, Corwith, Cicero, and St. Paul. Those facilities have experienced heavy eastbound and westbound intermodal flows, causing elevated inventory levels, gate restrictions, and spot chassis shortages.
Chassis shortages have been a constant problem over the past few months, both at the ports and at interior hubs such as Chicago, but reports this week indicate the worst is over. The number of chassis tied up at warehouses in Southern California is down by 2,000, and the number available to terminal operators is up by about the same amount, Ron Joseph, senior vice president and chief operating officer at Direct ChassisLink, Inc., said Monday. Chassis availability is also improving at the intermodal rail yards in the Chicago area, said Jon Poelma, president of Consolidated Chassis Management.
Improving is the key word, not solved. A source told JOC.com that conditions remain very busy behind the scenes in BNSF's as described in the advisory.
Ayano Nakamura, logistics supervisor with Senko USA, said containers arriving at UP's Global IV facility are being wheel mounted within a week. Trucking companies are still catching up, however, so shippers continue to see deliveries arriving late.
Rail disruptions in the interior US resulted in embargoes on rail shipments to Chicago, delaying eastbound shipments to Chicago and, in turn, causing congestion in the Southern California supply chain, said Anthony Chavira, chief operations officer at Rail Delivery Services. “It’s a big deal. It ripples through the entire network,” he said.
Since many of the intermodal trains originate in and terminate at the 12 container terminals in Los Angeles-Long Beach, all of which have access to on-dock rail facilities, the excessive dwells of intermodal containers add to the congestion caused by large discharges from extra-loader vessels and normal weekly vessel arrivals, filling the terminals beyond the 80 percent utilization level that is considered the cut-off before service is degraded.
Alan McCorkle, vice president of Yusen Terminals, said rail dwell times in the ports have been averaging five to seven days, and this has been the case since last autumn because of the front-loaded imports and extra-loader vessels. “Our volumes stayed consistently high through this week,” he said. Excessive rail container dwells take up space at locations in the terminal where they shouldn’t be, creating a residual impact throughout the facility, he said.
The APL terminal in Los Angeles is experiencing a similar overflow. “We’re sitting on 6,000 rail units when 2,000 or less is ideal,” said Sean Pierce, president and CEO of Fenix Marine Services. Rail dwell times reached eight days at the APL terminal, with the main problems caused by delays at rail yards in Chicago and Dallas, he said. Although he anticipates relief in the coming weeks as carriers’ blank sailings from the Lunar New Year reduce import volumes, the terminal this week was still experiencing congestion caused by rail service issues, Pierce said.
North American west coast ports aim to keep rail container dwell times to three days or less. When the dwells increase beyond three days, congestion builds rapidly. Since there is no central organization to track portwide rail dwells, similar to how the HTA tracks truck turn times and PMSA measures container dwells in the yard, it is difficult to quantify rail dwell times over the entire port complex, but the terminal operators say average rail dwell times at present are in the three-to-five-day range.
Light at the end of the terminal
A few terminals have escaped the worst conditions and now appear to be in the clear. Although both railroads serving APM Terminals struggled somewhat in January, dwell times are back below two days, said John Ochs, senior director, West Coast labor and regulatory affairs, at APM Terminals in Los Angeles. Three blank sailings last week helped a good deal, he said. Ochs said APM speaks by phone with the railroads every day.
SSA Marine, which operates three container terminals in Long Beach, has been experiencing delays of one to two work shifts in departing intermodal trains, said Ed DeNike, president of SSA Containers, but conditions should improve quickly. DeNike said the onset of carrier blank sailings will result in improved fluidity before the first sailings from Asia arrive on the West Coast next month, now that factories are reopening with the end of the Lunar New Year celebrations.
Port executives say the end of the current round of congestion problems is in sight. “As container volumes continue to stabilize, we do not anticipate further delays in rail operations,” said Noel Hacegaba, deputy executive director of administration and operations at the Port of Long Beach.
Port users acknowledge that the almost non-stop flood of imports since last summer, the melding of the 2018 peak shipping season with the front-loading of spring merchandise due to the US-China trade war, and the 34 extra-loader vessels deployed to Los Angeles-Long Beach since late November were an unanticipated disruption, but they also note that every year now brings unexpected disruptions in one form or another. In fact, the problems of 2018 and early 2019 can be considered worse than the 2014-2015 work slowdowns during the coastwide longshore negotiations, said Weston LaBar, CEO of the HTA.
“This time labor is working,” he said. Whether the disruption results from front-loading of cargo, labor issues, rail service problems, or chassis shortages, “We need a long-term solution,” he said.