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Exclusive: Congested Port of LA receiving empty containers from Gulf, Southeast

Carriers have requested up to 2,000 empties, which may impact ‘delivery cadence’

The Port of Los Angeles is about to receive more empty containers. (Photo by Jim Allen/FreightWaves)

American Shipper is reporting another wrinkle facing the Port of Los Angeles as it tries to clear the massive congestion. Thousands of additional empty containers are en route to the Port of Los Angeles from East Coast and Gulf Coast ports.  

Over the last couple of weeks, up to 2,000 empty containers originating from the ports of Charleston, South Carolina; Savannah, Georgia; New Orleans and Houston were headed to the Port of Los Angeles to be loaded onto vessels. These containers were requested by the carriers and will create more burden for the port terminals to receive local trucks trying to unload their own empty containers.

“The biggest hurdle we see in the market is the inability to return empty containers,” said Weston LaBar, head of strategy at Cargomatic. “This congests our carrier and customer yards and adds to the chassis shortage. Ultimately this can delay the ability to pick up imports due to the shortage in chassis availability and yard space. 

“We have customers whose warehouses can receive goods; however, the lack of chassis and space in their yards due to the stranded empties impacts the ability to keep a delivery cadence.”

The phenomenon of containers traveling from other ports to Los Angeles is not a new one. Local truckers tell American Shipper the port is known to be the “empty container dumping ground in the country.”

“Even containers from Port Rupert [in British Columbia, Canada] have made their way down to Los Angeles via rail,” said one trucker who requested anonymity. “This is making a bad situation worse. There is a finite number of slots to return empties. How can we pick up empties if we can’t unload our chassis?”

The reason for the carriers moving containers from the East Coast either by truck or rail to the West Coast is time. The LA trade route to China is faster than the maritime routes from the East Coast and Gulf Coast ports.

Despite the claims of 24/7 ports by the Biden administration, the Port of Los Angeles is still in talks with the various port stakeholders to seek participation. In an effort to expand service, the port is opening gates at 7 a.m. PT and on weekends so truck drivers can return empty containers and pick up loaded boxes. 

But because of the lack of warehouses open during the flex time and on weekends, coupled with the container restrictions that are imposed by the terminals at the order of the ocean carriers, appointments are being left unused.

According to the Port of Los Angeles, 50% of weekend appointments have been left open and 30% of weekday appointments remain unused.

The Harbor Trucking Association says the surge of extra containers will only add to the already stressed system.

“We are trying to free up chassis, but we can’t because we are competing with these additional empties contracted by the ocean carriers,” said Matt Schrap, Harbor Trucking Association CEO. “This is not helpful for the supply chain.”

The acceptance of empty containers at the Port of Los Angeles is on a first-come, first-served basis. That means if the terminal hits its empty container allotment at noon and a trucker arrives at 12:05 p.m., he or she will be turned away with a full chassis and cannot pick up a loaded container.

This photo given to American Shipper by port sources illustrates the unused truck appointments. The photo was taken from the APM Terminal at 7:38 a.m. PT at the Port of Los Angeles last Wednesday. It was a flex gate and opened at 7 a.m. The first appointment was a Walmart tuck at 9:45 a.m.     

“We’ve been more successful than the market at threading this needle for our customers,” said LaBar. “But an increase in empties coming from the East Coast, Gulf Coast and even Canadian ports should be a cause for concern for everyone servicing and using the Southern California ports.” 

Lori Ann LaRocco

Lori Ann LaRocco is senior editor of guests for CNBC business news. She coordinates high profile interviews and special multi-million dollar on-location productions for all shows on the network. Her specialty is in politics, working with titans of industry. LaRocco is the author of: “Trade War: Containers Don’t Lie, Navigating the Bluster” (Marine Money Inc., 2019) “Dynasties of the Sea: The Untold Stories of the Postwar Shipping Pioneers” (Marine Money Inc., 2018), “Opportunity Knocking” (Agate Publishing, 2014), “Dynasties of the Sea: The Ships and Entrepreneurs Who Ushered in the Era of Free Trade” (Marine Money, 2012), and “Thriving in the New Economy: Lessons from Today’s Top Business Minds” (Wiley, 2010).