CMA CGM Reroutes to Oakland to Avoid Port Congestion and Delays

With the ongoing reports of lack of space on containerships bound to the U.S. and port congestion when the ships arrive at the ports, there are increasing calls for actions to ease the bottlenecks. Shipping giant CMA CGM Group announced steps that it is taking to address the current conditions in the U.S. market.

Among the steps that CMA CGM announced is the addition of 25 extra loaders operating on routes between Asia and the U.S. These additional sailing with provide over 114,500 TEUs in total capacity, from May to December 2020 and will be part of a 39 percent increase in capacity the line is providing in the U.S. They will also deploy 13 larger vessels on the routes as part of the efforts to increase capacity.

The line also announced that it plans to reroute ships sailing on a route from Shanghai and Yantian, China with a new route starting February 12 called the Golden Gate Bridge, which will use Oakland, California instead of the previous calls at Los Angeles. According to CMA CGM it will be the first and only Transpacific direct service from Asia to Oakland.

“Oakland is an ideal, reliable alternative to the Port of Los Angeles/Long Beach for West Coast customers importing goods due to its easy access for existing California shippers, immediate berth availability, and fast rail connections into Chicago, Memphis, Dallas, and Kansas City,” writes CMA CGM Group. “The expanded service will also include Seattle, allowing for new capacity to Pacific Northwest customers. The CMA CGM Group continues to work closely with U.S. ports and other partners to actively develop and implement solutions to make the shipping and logistics supply chain seamless.”

The announcement of the new route comes as there are increasing complaints about bottlenecks in the Southern California ports. Last week, it was reported that vessels waiting for terminal space in the San Pedro Bay ports had reached a new record high. Over the past six months, demand for container transportation has bounced back sharply from the contraction caused by the COVID-19 pandemic in the first half of 2020.

The idea of rerouting away from the bottleneck has been drawing increasing attention. In an interview with the Journal of Commerce, FMC Commissioner Carl Bentzel suggested using the Pacific Northwest ports which have capacity that could be an alternative to the overloaded Southern California ports. At the same time, CNBC is reporting the California officials wrote to the FMC calling for an investigation into the export policies of the shippers at the Southern California ports citing extensive delays that were undermining California’s critical agricultural industry.

In addition to the bottleneck in the ports, the other big challenge has been the shortage of containers. The CMA CGM Group reports that it has taken several measures to speed up the return of empty containers to Asia and to cut delays at the ports it serves in the U.S., Asia, and Europe. In the U.S., they doubled the number of dedicated chassis in Southern California, broadened the base of truck providers to get containers in and out of the terminals more quickly, worked with rail carriers to bring additional rail cars through Southern California, and split calls between ports to increase velocity at berth. Services have also been rerouted to clear the build-up of empty containers, and CMA CGM is offering customers alternative solutions that use other types of containers.

Despite these efforts, analysts foresee little letup in the bottlenecks and port congestion as they expect the strong volumes to continue with a potential new surge during the summer months.