Cargo Business Newswire

Tuesday, December 16, 2014

Top Story

Businesses reroute shipments to avoid L.A./Long Beach port congestion

Businesses have been rerouting their shipments via air or diverting goods to other ports to avoid the congestion at the Ports of Los Angeles and Long Beach, caused by what port officials say is the lack of available chassis and unresolved contract talks between West Coast dockworkers and their employers.

That "perfect storm" has caused the Southern California seaports to lose business to competing seaports such as those in Oakland, Georgia, and others on the East Coast and even Canada, according to the port.

Eleven ships were reportedly anchored off the nation’s largest port complex on Thursday, awaiting a berth.

Airports that handle air freight have also seen a recent boost in cargo volumes. Los Angeles World Airports saw freight air cargo jump from 161,064 tons in October 2013 to 174,175 tons in October 2014, according to the LAWA’s latest statistics.

UPS officials said the company has seen double-digit growth in air freight year-over-year, adding that the company began communicating with customers with their logistics needs as early as February.

"Based on what we’ve seen in the past, there’s this risk of congestion developing and that customers need to develop or refresh their contingency plans and plan and prepare," said Eric Souza, director of global forwarding marketing for UPS.

Los Angeles and Long Beach port officials say it is difficult to quantify exactly how much business has been diverted away from their ports but believe the loss to be relatively small.

"We continue to see vessels coming to the port and are full," said Noel Hacegaba, chief commercial officer for the Port of Long Beach. "We’re optimistic that this will not affect our long-term projections."

Still, Taiwanese shipping firm Evergreen plans to drop the ports of Los Angeles and Oakland from its East Coast-North Asia service starting on Jan. 1 because of the congestion.

"It has to improve," said Guy Fox, chairman emeritus of the District Export Council of Southern California. "We need to get all the players together and resolve it. If it doesn’t improve, (imports through the L.A. and Long Beach ports) could drop (from 40 percent) to 30 percent. Then, there goes the jobs. Warehousing and distribution will move elsewhere."

For more of the Press Telegram story: www.presstelegram.com

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