Terminal operators in the ports of Los Angeles and Long Beach say a drop in productivity last month was caused by one-off events and does not signal that service will deteriorate further as the peak season progresses.
According to Harbor Trucking Association (HTA) truck mobility data powered by GeoStamp, the average truck turn time at the 12 Los Angeles-Long Beach terminals in July was 83 minutes, up 7.8 percent from 77 minutes in June. The number of moves that lasted two hours or longer edged up to 18 percent from 17 percent in June.
What happens at this time of year in the largest US port complex is of interest to all major gateways in the eastbound trans-Pacific at the beginning of the peak season because Los Angeles-Long Beach is a bellwether for the trade. Last year, July was the beginning of an early peak season due to front-loading of imports from China. This was reflected in marine terminal congestion that continued through the rest of the year.
Conditions are much different this summer. There has been little front-loading of US imports, and industry analysts are projecting a return to a “normal” cadence, in which cargo volumes increase through October and then diminish once most of the holiday merchandise has entered US ports for the Christmas season.
The uptick of visit times in excess of two hours contributed to skewing the average performance of the terminals, but nevertheless are especially damaging to truckers. “We had two drivers with appointments stuck from 12 pm until 6 pm at one terminal for two containers on Monday,” said Scott Weiss, vice president of business development at Port Logistics Group.
A wide gulf in terminal efficiency
Weiss also noted that turn-time issues vary from terminal to terminal. This point is corroborated in the HTA numbers, which show that turn times in July ranged from a low of 35 minutes at Long Beach Container Terminal and 37 minutes at SSA-Matson to 100 minutes or higher at West Basin Container Terminal, APM Terminals Pier 400, and Fenix Marine.
Average truck turn times in July increased at 10 of the 12 terminals. July is a difficult month at a port complex that handles more than 17.5 million TEU per year because the week of July 4 makes unusual demands on terminal operators. All of the terminals are shut down for two days for the July 4 holiday and July 5 Bloody Thursday holiday, when the International Longshore and Warehouse Union (ILWU) celebrates the incident that led to its founding in 1934.
At the Fenix Marine terminal in Los Angeles, total container moves during the July 4 week dropped to 11,000 before increasing to 28,000 moves the next week. That surge in discharged containers from vessels placed unusual demands on cargo handling in the yard, Sean Pierce, president and CEO of Fenix Marine Services, told JOC.com Thursday. “It filled up the RTG [rubber-tired gantry] block,” which slowed down the delivery of import containers to truckers, he said.
While operations at many of the terminals are disrupted during holiday periods such as July 4 and Christmas, Fenix experienced the additional challenge of transitioning to software programs in the yard and at the gate.
Conversely, Yusen Terminals (YTI) experienced software transition issues in June, and with those disruptions behind it, YTI was one of two terminals in the harbor to improve productivity in July, as average turn times fell to 71 minutes from 73 minutes in June, according to the HTA mobility numbers. “We’re getting consistency now,” said Alan McCorkle, CEO of YTI. The terminal’s turn times have continued to improve in August, and through Wednesday were down to 67 minutes on average, he said.
Cargo surges from mega-ships still an issue
Terminals in Southern California are experiencing logistical issues associated with the three major ocean carrier vessel-sharing alliances, and the ever-growing ships that result in cargo surges at the gates and chassis dislocations, both of which are reflected in increased turn times. It is becoming more common now for inbound loaded containers to enter the port complex at one terminal, and when the containers are unloaded, the shipping lines direct the containers and chassis to be returned to a terminal affiliated with another alliance member line.
But terminal operators in Los Angeles-Long Beach do not expect to encounter the same challenges as last year, when container volumes in the port complex increased 4 percent, according to PIERS, a JOC.com sister company within IHS Markit. In the first seven months of 2019, total container volume in Los Angeles increased 6 percent from 2018, but year-to-date volumes in Long Beach have declined 7.2 percent from the same period last year, according to port authority statistics.
Because most of the 34 extra-loader vessels deployed by carriers during the 2018 peak season were concentrated in Southern California, the gateway experienced unusually severe congestion from July through the end of the year. In December, normally one of the slower months of the year, imports increased 21.6 percent in Los Angeles and 7.9 percent in Long Beach, according to the ports.
Pierce said he is hearing from carriers in the eastbound trans-Pacific to expect a more normal peak season this year. The traditional spike at West Coast ports should occur in September and October, and overall volumes are expected to decline compared with last year, he said.
Pierce said Fenix is positioned where it wants to be for the peak volumes. The terminal’s normal “buffer zone,” which is reserved for peak-season volumes, is available right now, unlike last year when the buffer was filled from mid-summer through the end of the year. In addition, Fenix, which is served by both the BNSF and Union Pacific railroads, is not experiencing any rail car shortages or delays in spotting and departing trains. Those issues surfaced during the 2018 peak season, and many of the terminals in the port complex experienced congestions caused by rail service problems.