Container Logjam Eases as L.A. Port Threatens Penalties

(Bloomberg) -- The historic traffic jam at the Port of Los Angeles has eased slightly as ocean carriers face fines for letting cargo linger and “sweeper ships” arrive to haul off empty containers.

The number of import containers at the nation’s largest port has fallen by one-quarter to 71,000 since last month, when it and the rival Port of Long Beach announced a plan to assess a fee of $100 a day on containers overstaying their welcome. While the ports have since delayed penalizing ocean carriers, the threat of the fines has helped clear their yards some. 

The number of containers at the L.A. port lingering long enough to trigger the fines -- nine days or longer -- has fallen 29%, port Executive Director Gene Seroka told reporters Tuesday in a virtual press conference with Transportation Secretary Pete Buttigieg.  

“That gives us a little more room on the terminal tarmac to bring in empties and exports, but they have to be loaded against the vessels -- we cannot let those empty containers dwell for long periods,” Seroka said. “There’s much more work to be done on this front, but great progress by our dockworkers, shipping lines, truckers, marine terminal operators and railroad partners.”

Logjams at some of the nation’s key ports have compounded supply-chain bottlenecks that -- when coupled with higher labor and transport costs and shortages of materials -- have raised prices of goods. 

Buttigieg and Seroka hailed the passage of the $550 billion infrastructure package President Joe Biden signed into law on Monday, which will send about $17 billion to the nation’s ports. For the Los Angeles hub, the new law will help accelerate about $500 million in projects, Seroka said. More broadly, Buttigieg said the Biden administration would announce $230 million in funding for projects around the country from the Port Infrastructure Development Program.

Still, the challenges confronting southern California’s ports loom large. As of Monday, 83 container vessels were anchored off the coast of Los Angeles, according to the Marine Exchange of Southern California. In the meantime, a program to speed up the use of night-time and weekend hours at the ports has gotten a chilly reception so far: of roughly 125,000 entities that use the Los Angeles port for shipments every year, only 21 have committed to the program, called Accelerate Cargo L.A.

A major challenge has been clearing the port’s yards of some 65,000 empty containers sitting on its docks, which are taking up space and preventing the unloading of full boxes on ships at anchor. 

A positive development is the arrival of six additional sweeper ships that have picked up about 17,500 20-foot equivalent units of empty containers, Seroka said. 

Two more sweepers are headed for the port, and will be able to carry about 2,500 TEUs of empties, but “we’ve got to do a lot more than that,” Seroka said. 

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