In recent weeks, numerous shipments of holiday goods, inventory replenishment, e-commerce fulfilment, and even next spring’s home improvement merchandise have caused major congestion at U.S. West Coast ports like Los Angeles and Long Beach in California. The spike in import volume from mainland China into the U.S. is expected to continue through the end of the year and even through the start of Lunar New Year, which runs from February 12th to the 27th in 2021.
U.S. retail sales increased 5% year-over-year, specifically within non-retail e-commerce. And, after suffering through stock-outs in the spring, in order to maintain momentum, retailors have been building up their inventories stateside to ensure stock for the holiday season push, driving the increase in U.S. imports. This acceleration could also be attributed to importers rushing to get shipments into the U.S. before tariff exclusions from Section 301 expire at the end of this year.
Here is what is happening at West Coast Ports:
- US imports from Asia increased 22% in September & August compared to those months last year
- Productivity at container terminals is expected to decline
- Truck turnaround times have increased
- Total truck capacity in the harbor is limited
- There are Labor shortages at the terminals and distribution centers, and shortages of chassis
- Chassis are remaining at warehouses three to four days longer than what is needed for efficient operations
- Import dwells are averaging over five days
- Congestion has spread to the rail carriers that serve the ports
Alleviating some congestion in Long Beach is the new Gerald Desmond Bridge, which opened on October 2nd, offering much more clearance space to increasingly large container ships, which did not fit under the city’s previous bridge. With three lanes traveling in each direction, it is said to be the second-largest cable-style bridge in the country.
Long Beach Mayor Robert Garcia said during its unveiling, “We know that this project is just a phenomenal architecture and infrastructure marvel… Not only does it connect Long Beach to Los Angeles, but it connects our port to the world.”
These past few months are proving to be quite challenging for importers, and the complications are not over yet. Because Lunar New Year begins about two weeks later in 2021, as compared to its January start date in 2020, it is likely that the high volume of imports will not die down until sometime after the Lunar New Year holiday.
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