US importers will continue to struggle to secure equipment and vessel space at Asian load ports through January, despite carriers continuing to deploy extra-loader vessels and launch new weekly services in the eastbound trans-Pacific trade, according to cargo interests.
That’s because US imports from Asia each month are increasing 20 to 30 percent year over year, and even the new capacity that is coming online will be stretched to the limit.
“If you’re trying to get a booking, and you don’t have a fixed deal in place, you’re probably booking three to four weeks out,” Christian Sur, executive vice president sales and marketing at Unique Logistics International, told JOC.com Wednesday.
West Coast ports handle about 60 percent of US imports from Asia, according to PIERS, a sister product of JOC.com within IHS Markit. In a recent issue of Sunday Spotlight published by Sea-Intelligence Maritime Analysis, CEO Alan Murphy said laden imports through West Coast ports would jump about 30 percent in both December and January year over year.
“There has been a surge in both imports into North America, and the capacity deployed on the Asia-North America trade,” Murphy said. “When we look at demand and supply, the argument is simple: Deployed capacity is dictated by demand.”
More extra-loaders are coming in January
Carriers deployed dozens of extra-loader vessels — i.e., those deployed on an ad hoc basis, rather than as part of a regularly scheduled liner service — from Asia to the United States in the past two months, mostly to the ports of Los Angeles and Long Beach, but also to East Coast ports, and are announcing additional extra-loaders for January.
The Southern California port complex handled 31 extra-loaders in December after 26 in November, according to the ports of Los Angeles and Long Beach. That’s on top of more than 35 extra-loaders deployed earlier in the fall. Carriers notified Long Beach of seven additional extra-loaders planned so far for January, and Los Angeles said it is expecting six extra-loaders, three of which were scheduled for December but have been pushed into January because of port congestion. That’s in addition to the regularly scheduled 27 weekly trans-Pacific services to Los Angeles-Long Beach.
East Coast ports also reported receiving extra-loaders over the past two months, with more scheduled for January. A Savannah spokesperson said the port handled seven extra-loaders in December and 14 in November, with seven scheduled so far for January. Charleston reported handling five extra-loaders in November-December. So far, none have been scheduled there for January. New York-New Jersey said it does not collect data on extra-loaders, although an industry source said the largest East Coast port complex has had “a few extra-loaders” the past two months.
Imports from Asia have been so strong in recent months that carriers have added some calls at secondary East Coast gateways. The Port of Baltimore, for example, told JOC.com it has had as many as 11 extra calls, including inducement calls, which are scheduled weekly strings to other ports that added Baltimore as a stop on the rotation.
The dozens of extra-loaders deployed so far to the East and West coasts have been filled mostly with imports by national retailers, large beneficial cargo owners (BCOs), and shippers of personal protective equipment (PPE), and medical supplies, non-vessl-operating common carriers (NVOs) said.
“It’s mostly reserved for the carriers’ main base customers,” Sur said. Smaller importers and NVOs are offered slots only after the core customers have been accommodated, “but it’s a last-minute thing,” he said.
New weekly strings launched in 2020
Carriers in the second half of 2020 launched several new weekly services from Asia to Los Angeles-Long Beach, including Mediterranean Shipping Company’s Santana service with 9,000 TEU vessels, and CMA CGM’s Seapriority Express premium service with 5,500 TEU ships. The first CMA CGM vessel is scheduled to arrive in early January. Also, Matson Navigation Co. added a second expedited service with vessels of 2,800 to 4,500 TEU capacity.
THE Alliance earlier this month announced a new service from Asia to the US Gulf. The service will be launched in the spring of 2021 and will call in Houston, New Orleans, and Mobile.
The import surge began in late June in Los Angeles-Long Beach and picked up steam at East Coast ports later in the summer. Imports from Asia moving through the Southern California gateway totaled 4.1 million TEU in July through November, an increase of 20 percent from the same period in 2019, according to PIERS.
The ports of Los Angeles and Long Beach have borne the brunt of the import surge in terms of congestion throughout the supply chain, from vessel bunching to congested terminals and warehouses. Kip Louttit, executive director of the Marine Exchange of Southern California, said the relentless arrival of vessels and cargo are “choking the system.” The Marine Exchange reported Tuesday there were 58 container ships in the port complex, with 28 of the vessels at berth and 30 at anchor awaiting berthing space.
The Signal, published by the Port of Los Angeles, and the Wave, published by the Port of Long Beach, project the port complex will handle more than 230,000 TEU of laden imports in the week of Jan. 3, and a similar amount in the week of Jan. 10. According to PIERS, the port complex in January 2020 handled about 176,000 TEU of laden imports a week from Asia.
NVOs say vessels leaving ports in China and Southeast Asia are over-booked through January, and will likely remain so in early February until there is a brief respite when factories in Asia close on Feb. 12 for the Lunar New Year. Importers who have not already secured space for the coming month will struggle to do so.
“Getting space and equipment is a four-week endeavor,” said Jon Monroe, who serves as a consultant to NVOs.
The tight vessel space and equipment shortages in Asia have driven up spot rates to the West and East coasts to record levels. The spot rate from China to the West Coast on Dec. 25 was $4,080 per FEU, up 116.7 percent from the same week last year, while the East Coast rate was $4,876, up 62.6 percent year over year, according to the Shanghai Containerized Freight Index that is published in the JOC Shipping and Logistics Pricing Hub.