In a media conference call hosted by the Port of Los Angeles (POLA) yesterday, Gene Seroka, POLA Executive Director, highlighted various aspects of the port’s operations on a year-to-date basis.
Total POLA March volume came in at 958,674 TEU (Twenty-Foot Equivalent Units), for a 0.1% annual increase, setting its third consecutive monthly volume record in the process, trailing May 2021’s 1,012,048 and October 2020’s 980,729 TEU. total first quarter volume—at 2,682,034 TEU—posted a 3.5% annual gain, for its best first quarter on record.
March imports—at 495,674 TEU—rose 1% annually, and exports—at 11,781— continued to decline, down 9% annually, now having fallen in 37 of the last 41 months. Empty containers saw a 2% annual gain, to 351,697 TEU.
Seroka explained on the call that what is behind the strong first quarter start for POLA is better fluidity on its docks.
“We have been working at this for a long time and it is paying off, with fewer vessels waiting in the queue and more velocity on the terminals,” he said. “We have more workers on the docks with fewer shifts getting cut. That is because we are past Omicron and also have a lot more room to maneuver on our terminal tarmacs. We are using data more than ever to see around corners and over hills to address issues before they become problems.”
As a result of POLA’s ongoing focus on leveraging data, the port’s top executive explained that the port is putting what he called an all-out focus on rail.
“Rail volume has increased six-fold in the last month alone [at POLA],” he said. “Today, there are about 16,000 containers waiting to load on-dock rail, almost double from last fall. You can see the order of magnitude right now. We are dealing with C-suite partners and the Administration in Washington to reposition rail cars and get containers into the U.S. interior.”
What’s more, Seroka said that both Western U.S. Class I railroads—Union Pacific and BNSF—have seen really low intermodal numbers, for a number of months, with everyone in the industry rallying around them to get more intermodal cargo, which he said is here and needs to be handled better.
“We cannot just necessarily wait for exports and empty containers to be loaded onto rail cars and traditional schedules carrying that equipment back to the West Coast,” he said. “I do know that United States Department of Transportation Secretary Pete Buttigieg has talked to CEOs at both UP and BN and COOs [at each railroad] have told me directly they are more than happy to jump into the fray, assist their day-to-day colleagues, and see whatever they can do to move the needle.”
Should that not suffice, he said, as a last-ditch effort, the container dwell fee floated by POLA and POLB may need to be implemented, if needed, to get stakeholders motivated. The fee would charge ocean carriers for each container falling into two categories: for containers scheduled to move by truck, ocean carriers will be charged for every container dwelling nine days or more; and for containers moving by rail, ocean carriers will be charged if the container has dwelled for three days or more. POLA and POLB previously said that ocean carriers with cargo in either of these categories would be charged $100 per container, which will increase in $100 increments per container per day.
“As painful as it is, we may have to implement that fee,” said Seroka. “What we have seen is that the long dwell containers that we categorize as nine days or longer had dropped down to about 8600 units from a peak back in October of 37,500K units that were aging at that time. Even just the threat of a fee—we have never collected a dollar—drove the decline of aging containers down by 75% at its best mark. And imports had gotten down under 50,000 units and were driven down to about half of what we had been holding at the 95,000 containers back in October as well.”
Addressing the ongoing pandemic-related shutdowns in China, Seroka said it has not had a noticeable impact yet.
“Like we described a month ago, for South China, we are keeping an eye on what is happening in Central China right now,” he said. “There could be a Short-term lull if there are factory closures and others that impact the supply chain getting goods to the ports for loading the ships and with that a pretty quick recovery. There are some road closures in Shanghai and some folks are not moving cargo as swiftly as normal but nothing that is going to be an absolute drop off a cliff.”
He said POLA is monitoring the situation daily and over the next couple weeks to a month there may be a little catchup time, for potentially repositioning vessels and service schedules to match up with those containers that need to get caught up on, from a product standpoint, loaded and brought over to the U.S.
“Like we have seen before with some of these regional and municipal impacts, there is a short- term lull and a pretty quick pick up, and then getting on a steady course going forward,” he said.
About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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