FMC Focusing on Container Movements as Ports Struggle with Empties
The Federal Maritime Commission is launching a series of new initiatives focusing on the movement of containers as part of the efforts to improve trade flow and reduce the problems facing shippers across the United States. The efforts come as the Port of Los Angeles said that it is literally chocking now with empties, blaming the stacks of containers waiting to leave the port as the latest hurdle to reducing the backlogs at its terminals.
As would be expected, much of the FMC’s November monthly meeting focused on the supply chain issues and their impact on trade. During the hour-long open session for the monthly meeting, the FMC was briefed on U.S. macroeconomic indicators and their associated impact on shipping, the state of the U.S.-International ocean trades, vessel capacity, and pricing. The meeting continued with the closed session reviewing ocean carrier revenue and pricing, capacity, canceled sailings, and port calls.
Among the new initiatives being launched by the FMC, Commissioner Rebecca F. Dye will be heading up six supply chain innovation teams to identify and implement improvements to the process and timing of return and delivery of containers to marine terminals.
“Achieving double moves for truckers would improve trucker productivity and remove a constant source of conflict over container return as well as resolve problems with appointment systems and chassis shortages,” said Commissioner Dye. “Earliest return date confusion is a terrible problem for U.S. exporters. This reform would also remove the constant problem to U.S. agricultural exporters of demurrage and detention charges that are not in compliance with our interpretative rule.”
One of the goals for the teams is to focus on the “double move” where trucks return a container and pick up a new one on the same trip into the port. The teams will also seek to bring certainty and predictability to the earliest return date process to address exporter complaints about the unreliability of the deadline for getting cargo to a terminal. They will focus on improving conditions at the Ports of Los Angeles and Long Beach and New York and New Jersey. The teams will include executives from each ocean carrier operating in an alliance and from the marine terminal operators that serve them. The first meetings of the teams will be held on December 1.
The FMC’s focus on containers comes as the ports are move citing the build up of empties as one of the biggest impediments to landing imports. Gene Seroka, executive director at the Port of Los Angeles, said during his monthly update on port operations that Los Angeles is overloaded with empties and that they need to get them out of the yards to make more space.
"We've got about 65,000 empty container units sitting on the docks right now," said Seroka. He told reporters that it has risen by 18 percent in recent weeks and while the shipping lines want to move the empties, more effort has to be made to get them out of the port’s yards. On an average week, the port has repositioned 90,000 empties, but Seroka said the number is now up 30 percent and they are coming in quicker than they are leaving.
Los Angeles said that it has seen was Seroka called “sweepers” coming in from the major shipping lines to help rid the terminals of empties. Six of these sweeper ships moved 17,500 TEU with more ships on their way which will move another 2,500 TEU in addition to the ones loaded onto vessels before they depart on their scheduled calls. While he said the port was making progress with the number of long dwell boxes on the decline he said that they needed to double their efforts to get empties moving.
The actions by the FMC and Port of Los Angeles came as the Marine Exchange of Southern California reported the trends moved in the wrong direction at the start of this week. Yesterday, November 16, they set four more records, illustrating the pile-up continues to grow. The San Pedro Bay complex reached a total of 179 vessels either in port or waiting for terminal space, up nine versus the prior peak. The anchorages remain full with 52 ships and another record of 62 waiting for space. This includes 35 containerships at anchor and a record 51 waiting further out to sea. A total of 26 of those containerships are classed as mega meaning they each have a capacity over 10,000 TEU. Those ships alone account for nearly 320,000 TEU. By the end of the week, another 34 vessels, including 15 containerships, are due to arrive at the ports.