San Pedro Bay looks less crowded these days. The fleet of massive container ships loitering just offshore from the ports of Long Beach and Los Angeles has dwindled to 46 boats from a peak of more than 80 at the end of October.
Is this a good sign for Southern California’s overburdened supply chain and its breathable air? It depends who you ask.
At a news conference on Tuesday marking Labor Secretary Marty Walsh’s first visit to the port complex, Port of Los Angeles chief executive Gene Seroka pointed to ships dropping at anchor as a sign of progress. “Since we introduced a penalty for long life containers, the number of ships at anchor has dropped by more than 40% in four weeks,” Seroka said.
The implication was that some supply chain watchers were inflating their stacks. The reduction in the number of ships in close proximity to the coast is undeniable, but the total number of ships waiting has not decreased because the ports have suddenly sped up.
“It’s an apples-to-oranges comparison,” said Sal Mercogliano, a professor of maritime history at Campbell University in North Carolina and a former merchant marine who criticized the comment on social media.
The drastic reduction in the number of ships at anchor is due to a new policy set by shipping company trade groups that encouraged arriving ships to wait on the open ocean rather than close to shore. Starting Nov. 16, ships crossing the Pacific were asked to sit 150 miles from shore while they wait for a free place to unload their cargo, and ships heading north or south along the coast were told to sit 50 miles from shore. While there were just 46 ships in San Pedro Bay as of Wednesday, the roughly 50 additional container ships that boarded after the change are now loitering on the horizon, which would push the total backlog to an all-time high.
Seroka “is an expert in this area and what LA and Long Beach have been able to do is amazing in terms of cargo,” Mercogliano said. But he felt that combining the number of boats in the vicinity with the overall backlog was “a little disingenuous”.
In an interview, Seroka defended his statement with some explanation. Four weeks ago, 84 boats were at anchor, waiting to be unloaded. More than 40% of those 84 vessels have since been unloaded, Seroc said, which he cites as evidence that ports are operating at an impressive pace, even as the backlog at sea continues to widen.
Ports have handled record volumes of cargo over the past year, although they have plateaued. “Before the pandemic and before the surge in consumer buying patterns in America,” Seroka said, “during the high season, we had one or two months where we moved 900,000 twenty-foot equivalents — or TEU, the standard measure of volume in shipping — everything, including loaded import and export and empty containers.
“For 17 months, we move an average of 900,000 containers every month,” Seroka said. “That’s really peak performance.”
The Port of Long Beach operated in a similar fashion, with its monthly throughput hovering around 800,000 TEU over the same period.
Seroka said the Port of Los Angeles offloaded just 63,000 TEU during Thanksgiving week, but the port returned to full capacity this week and he believes that number could increase in the coming months.
The cities of Los Angeles and Long Beach serve as port owners, while private companies operate ships, terminals, trucks, and warehouses. Seroka, as leader of the Los Angeles side of the operation, has limited ability to make changes on his own, but he sees a few shifts that could speed up the process.
Warehouses, trucking companies and terminal operators can increase the number of night shifts, allowing more containers to be picked up when there is less traffic. The Biden administration may revise some tariffs on Chinese imports that the Trump administration has imposed, notably, Seroka said, a tariff on container truck chassis imports that has contributed to port bottlenecks, making chassis a rare commodity. . And shipping companies could work more closely to clear the docks of empty containers that take up real estate needed to offload new ships.
Seroka said he’s seen some progress on that last issue. One of the many twists and turns in the supply chain is that smaller shipping companies that previously operated on regional routes in Asia have moved into the trans-Pacific business as demand and freight rates soared this year. As newcomers to the field, these shippers had contracts to ship goods east to the US from Asia, but did not set up an export business for the return trip, meaning they would simply leave once they unloaded their ships. Now some of these companies are making deals with big industry players to pick up their empty containers on the western route.
Seroka also insisted that the new queuing system, which places ships 50 or 150 miles from shore, is a step forward in terms of efficiency, not a cosmetic change. Under the old system, ships could only queue to unload their cargo when they were within 20 miles of ports. This meant ships had to race across the sea while burning extra fuel to secure their place in line, only to sit and wait for weeks on end once they arrived.
The change gives ports a better idea of what’s ahead, reduces overall emissions by slowing boats down, reduces emissions close to shore as ships are farther out to sea, and reduces the risk to ships, Serok says. clashes in San Pedro Bay.
“We had a case of wind about four weeks ago and it scared the shit out of us all,” Seroka said as 50 to 60 mph winds started pushing the boats.
The organizations that created the new system are the Pacific Merchant Shipping Association, the Pacific Maritime Association. and the Sea Exchange – highlighted the environmental implications of the shift when they announced it in early November as air quality in the Los Angeles area has deteriorated as well as calls for regulation of shipping industry emissions intensified.
“This process will allow ships to slow down and spread out, reducing the number of ships anchored before winter weather sets in, as well as reducing emissions near coastlines,” they wrote in a statement announcing the establishment of the Safety and Air Quality Zone. .
California agencies that regulate air quality said they were not consulted about the shift before it was announced, although they are cautiously optimistic that it could help improve the situation.
“We did not specifically study the impact of this change on air quality,” Michael Benjamin, head of planning and air quality science at the California Air Resources Board, said in an email. Although he said the change “should be positive in terms of air quality as it significantly dilutes pollution before it reaches the coast and communities”, he noted that the change “does not eliminate the need to clean up the fleet”. serving California ports.
Recent CARB report found that port emissions have increased by 75% since 2019 due to heavy traffic, with increased shipping resulting in an additional 20 tons of nitrogen oxide-producing smog per day and other activities generating an additional 7 tons per day. The same report found that particulate matter emissions from ships in the port rose from an average of 0.0002 tons per day before the onset of congestion in mid-2020 to half a ton per day in September and October 2021 – a 2,500-fold increase equivalent to adding 100,000 heavy duty diesel trucks will take to the road.
Air Quality Management District South Coast regulators have agreed that if anchored ships are 150 miles offshore, they expect to see an improvement in air quality, although this may be partly offset by increased emissions from ships that need to be launched. their engines for navigation. , in the sea.
“We don’t yet know what the net impact or benefit of these potentially higher emissions is on air quality in our region,” agency spokesman Nahal Mogharabi said.
While the decline in the number of ships in San Pedro Bay is an encouraging sign, “the anchorages closest to the shore appear to be mostly full, and closer ships are expected to have the biggest impact on air quality,” Mogarabi said. “The significant number of ships beyond 150 miles also indicates that we should expect higher port emissions for the foreseeable future.”
The container park may be out of sight, but not out of your mind. And ports are likely to remain a bottleneck for U.S. imports in the coming months.
“We have to keep working,” Seroka said. He expects activity to remain strong in the first months of 2022 as US companies look to build up their depleted inventories after the holidays. “We need to synchronize this stuff” between many public and private players in the supply chain, he said, to make a big dent in the growing backlog. “But we’ll take small wins.”