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May 27, 2021
California’s massive container-ship traffic jam is still really jammed
Peak shipping season is coming soon — and the “parking lot” of container ships stuck at anchor off the coast of California is still there, with Oakland surpassing Los Angeles/Long Beach as the epicenter of congestion.
Shipping giant Maersk warned in a customer advisory on Wednesday that Los Angeles and Long Beach “remain strained with vessel wait times averaging between one to two weeks.” But it said “the situation is even more dire at the Port of Oakland, where wait times now extend up to three weeks.”
West Coast port delays are having severe fallout for liner schedules. Congestion in California equates to canceled voyages as ships can’t get back to Asia in time to load cargo. Even as U.S. import demand soars, the effective capacity in the trans-Pacific trade is being sharply curtailed by voyage cancellations.
For importers, that means even longer delays, even higher all-in freight rates and a cap on how much can be shipped at any price.
Maersk said that 20% of its capacity from Asia to the West Coast has been lost year to date as a result of operationally induced “blank” (canceled) sailings. It currently expects 16% of its Asia-West Coast capacity to be lost from now until the end of June and 13% to be lost from now until the end of August. “This unfortunately means Maersk may not be able to fully honor its original allocations for all customers,” the carrier admitted.
To put current cancellations in context, they are now running at the same percentage that carriers intentionally blanked in Q2 2020 to compensate for the sudden collapse of import demand when U.S. businesses were shuttered by nationwide lockdowns.