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To Our Valued Clients:

Please be advised that delays moving cargo in and out of Los Angeles/Long Beach, the nation’s largest port complex, have worsened in recent days, with no immediate solution in sight. This critical situation is the result of a combination of larger incoming vessels creating higher than expected cargo surges, gate hour restrictions at terminals, long-shore labor shortages and general labor uncertainties as the ILWU longshoreman’s contract negotiations continue. All of this has created terminal gridlock, intermodal rail delays, chassis shortages and a truck capacity shortage as the terminal operators scramble to get containers in/out of the port terminals.

Some terminals have reported dwell times as much as 10 days on average in October, compared to the normal three days. One carrier recently reported containers sitting on the dock for 20 days waiting for on-dock rail. Additionally, the port is experiencing some vessels anchoring outside the ports waiting for a berth. Some ocean carriers are skipping L.A./L.B. and discharging instead into Oakland or Tacoma/Seattle ports.

At HYC Logistics we are working closely with our ocean carrier and truck partners, to the best of our ability, in order to facilitate the fastest possible movement of your shipments through the port facilities.

For cargo not yet booked, we encourage shippers and importers to consider alternate routings, scheduling or transportation modes, especially for cargo into or out of the mid-west. Consultation with your HYC Logistics representative based on your individual supply chain needs can provide further information and insight to help guide you in this process. HYC Logistics offers airfreight and domestic trucking services for all your import/export shipping needs.

We will continue to keep you advised of the situation at L.A./L.B. We are optimistic that with a decline in imports into the traditional “slack season” of November and December, the terminals will finally have an opportunity to clear out much of the back-log of containers, thus improving throughput back to normal standards.

As always, please contact your HYC Logistics representative if you have questions or concerns. Also check out the latest updates on Port News.

Best Regards,

HYC Logistics Inc.

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USA – Southern California Port Congestion
Source: Hapag-Lloyd

October 29, 2014

Dear Customer,

Please be advised that congestion at the ports of Los Angeles and Long Beach has reached a critical point.

  1. Several container ships are anchoring off the harbor and waiting in line to Now Vessels are also being delayed due to ongoing congestion.
  2. There continues to be an acute shortage of truck The American Trucking Associations (ATA) estimates that the industry has a shortage of approximately 30,000 drivers nationwide. Hapag-Lloyd continues to explore opportunities to contract additional vendor companies.
  3. The success of the import delivery appointment system at some terminals has been limited in part by a lack of sufficient container handling equipment to pre- mount those containers prior to the scheduled pick-up Import customers and their motor carrier vendors are encouraged to confirm availability of their cargo by checking the terminal’s website prior to sending a truck to the terminal in order to avoid a denial of service when they arrive at the terminal gate.
  4. Chassis shortage is also exacerbated due to our services being fragmented over many A chassis relief team comprising of terminals, chassis vendors and PierPass has been established and is looking to set up a temporary asset sharing plan among the chassis providers with the next 30-90 days. A long term solution is expected in 2015.

Due to this congestion, berthing and/or cargo delays are expected on the below services:

  • CC1 (Central China 1)
  • CC2 (Central China 2) This service will be temporarily suspended.

Final sailing: OOCL Italy V048 Eastbound ETD Shanghai on October 31, 2014 / Westbound ETD Los Angeles on November 16, 2014

  • CC3 (Central China 3)
  • CC4 (Central China 4)
  • JPX (Japan Express)
  • MPS (Mediterranean Pacific)
  • PA1 (Pacific Atlantic 1)
  • PA2 (Pacific Atlantic 2)
  • SC1 (South China 1)
  • SC2 (South China 2)
  • SE1 (Southeast Asia 1)
  • SE2 (Southeast Asia 2)
  • SE3 (Southeast Asia 3)
  • WAN (US West Coast – Australasia Loop 2)
  • WAS (US West Coast – Australasia Loop 1)

We will continue to pursue alternative measures to assist our customers and alleviate the burden felt from these congestion issues.

For further information please contact your local Hapag-Lloyd office.

Kind Regards,

Hapag-Lloyd (America) Inc. as agent of Hapag-Lloyd AG

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Current Port News

Los Angeles Delays Hit Sales as No. 1 US Port Suffers

Source: Bloomberg News


446bc91c89b4af07065354c4f90015a0After years of ending the holiday shopping season with too much merchandise stacked in their warehouses, U.S. retailers face the opposite this year: They may not have enough.

Equipment shortages, labor negotiations and rail delays are slowing shipments from the Ports of Los Angeles and Long Beach, the nation’s biggest container hub, just as retailers are piling up goods for their most important period of the year. Cargo shipments through the two ports rose 3.1% in the third quarter, slower than the 4.3% gain a year earlier.

The turmoil comes at a bad time for merchants — scarred by the weak sales that followed the financial crisis — that have been keeping inventories lean to avoid resorting to profit-eating discounts to clear out the unsold goods. Retailers in the Standard & Poor’s 500 Index grew inventories at 86% of the rate they boosted sales in the most recent quarter, according to data compiled by Bloomberg News. A year earlier, inventories expanded 1.72 times as fast as sales.

“They’ve essentially squeezed out the buffer time to react if there’s an issue,” said Frank Layo, a partner at retail-consulting firm Kurt Salmon in Atlanta. “As soon as you introduce some serious supply-chain risk, you’ve painted yourself into a corner.”

That cushion would have been useful this year. Storage space at several of the Port of Los Angeles’ container terminals are 90% full as shipments wait to be trucked to customers, Phillip Sanfield, a spokesman for the harbor, said by telephone. A large part of the problem is the scarcity of chassis, the wheeled metal frames that carry containers behind trucks, he said.

Shipping lines have been exiting the costly business of maintaining and operating chassis in the last year and a half, and the operators that have taken over are still getting the hang of supplying enough chassis at the right time and place, Sanfield said.

“Some of the logistics have caused a shortage of chassis in the pool, at times a significant shortage where they’re needed,” he said. “Last year, it was beginning to be an issue. This year, combined with the peak season, it’s obviously legitimate to say we have a significant issue.”

Labor negotiations have worsened the problem, Sanfield said. The ports have been working with chassis operators to form a pool that would help them better coordinate where the equipment is needed, Sanfield said. Such a network may require the approval of the International Longshore and Warehouse Union. That group’s leaders have been mired in negotiations with U.S. West Coast terminal operators since their contract expired in June.

A tentative deal between the longshoreman and the Pacific Maritime Association, representing management, may be reached within weeks, Gene Seroka, executive director of the Port of Los Angeles, said Oct. 23. Both sides “have a mutual respect,” he said at a business luncheon in Los Angeles.

The situation is coming at an inopportune time for retailers. Purchases in November and December are projected to account for 19% of U.S. retailers’ annual sales, according to the National Retail Federation. Holiday sales this year may advance 4.1% to $617 billion in those two months, topping last year’s 3.1% gain and the 10-year average of 2.9%, the trade group said.

Most Christmas merchandise already is on store shelves, though a work stoppage at the ports could become an issue if retailers need to replenish supplies for last-minute shoppers, said Craig Johnson, president of Consumer Growth Partners.

“It isn’t going to affect the bulk of Christmas for the retailer,” he said. “Retailers looking to replenish hot products part way through the season could be impacted.”

While most big retail companies have a “diversified inbound strategy,” for shipments, a strike at the Los Angeles and Long Beach ports in the next few weeks would strand merchandise that’s currently at sea, Layo said.

“It’s not like you can just call up the captain of the ship and say, ‘Take a left and head up to Seattle,’” Layo said. “If it’s already left Shanghai, it’s at risk because you can’t just divert it easily.”

After hearing concerns from about the port situation, Layo convened a meeting with 10 major U.S. retailers to discuss the issue in Chicago earlier this month. He said most of the companies had reported delays moving cargo through Los Angeles to their stores across the country.

Target Corp., Costco Wholesale Corp., Home Depot Inc., Samsung Electronics Co. and Sears Holdings Inc.’s Kmart chain were the top five importers, by weight, at the Los Angeles and Long Beach ports through Oct. 14 this year, according to data compiled by Panjiva, a global trade research firm in New York. The ports handled about 149 billion kilograms (328 billion pounds) of goods last year.

Home Depot, which imported more than 163.7 million kilograms of goods through the two ports through Oct. 14, has “contingency plans in place for any disruptions, and that’s regardless of the reason those might occur,” Stephen Holmes, a spokesman, said in an e-mail.

“We construct our plans to allow for flexibility,” he said, adding that the company gets shipments through the other major U.S. ports at Seattle, New York and Savannah, Georgia.

Representatives of Costco, Target and Samsung declined to comment. Chris Brathwaite, a spokesman for Sears, declined to comment beyond saying the company is monitoring the situation daily.

Department stores and retailers with a healthy stock of products could probably ride out a work stoppage or rely on cargo coming in through other ports, Layo said. Fashion brands with seasonal products or retailers with strong demand for hot items may not have it so easy, he said.

“There’s a bad timing element to this, where if it breaks down over the next couple of weeks it’s going to put retailers at risk,” Layo said.

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We can HELP!  If you are interested in other means of transportation for your imported or exported goods, call us today at 901-356-7700 or complete the form on our Contact Us page.

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Transpacific Carriers Imposing Fee On Intermodal Cargo

Source: American Shipper

The Transpacific Stabilization Agreement, a discussion agreement among 15 container carriers that handle more than 90 percent of container cargo in the transpacific trade, said that they will imposed a charge on containers moving under intermodal “store-door” delivery through rates from Asia to the U.S.

TSA said, “Congested U.S. port terminals, harbor, and over-the-road truck and driver shortages, slower trains, and longer rail terminal dwell times due to increased domestic rates have not only disrupted service but also driven intermodal rates and cargo-handling costs up sharply. Asia-U.S. container lines, still heavily reliant on intermodal service, have now been forced to respond with intermodal door delivery charges to recover those costs.”

It said most TSA lines will begin imposing charges of $100 per 40-foot container and $90 per 20-foot container, effective on or around Nov. 15, but no later than Dec. 1.

Brian Conrad, the executive administrator of TSA, said that congestion and associated costs are the result of a convergence of factors, among them equipment interchange issues, railcar shortages, freight backup at intermodal terminals, and a shift of intermodal cargo to more costly pure-truck moves.

“These are systemic issues that will get resolved over time, but in the midst of the peak season and with demand still strong, we don’t have time,” he said. “Carriers are doing their best given the service and infrastructure constraints we see across the supply chain. For now, as we all work on solutions, the key is cost recovery.”

The TSA members are APL, China Shipping, CMA CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Maersk, MSC, NYK, OOCL, Yang Ming, and ZIM.

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We can HELP!  If you are interested in other means of transportation for your imported or exported goods, call us today at 901-356-7700 or complete the form on our Contact Us page.

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Container Ships Backed Up For Days Off LA-LB Ports

Source:  Journal Of Commerce

In a reminder of the parking lot that the San Pedro Bay became during the 2002 lockout by the Pacific Maritime Association of ILWU workers, container ships are backed up once again off the ports of Los Angeles and Long Beach waiting for days for a berth as gridlock descends on the largest port complex in the Americas.

Currently there are eight container ships anchored in the waters off LA-Long Beach, with two more due to arrive at anchor and two to move from anchorage to berth, the executive director of the Marine Exchange of Southern California, retired Coast Guard Capt. J. Kipling “Kip” Louttit, told JOC.com today at 2 p.m. Pacific time.

“This is very unusual,” Louttit said. “There’s usually zero wait times with container ships. The only time a container ship is usually at anchor is if something weird happens: a breakdown, a casualty or a Coast Guard holdup. Container ships normally run on rails.”

He said that over the past two weeks there have been an average of three ships anchored at any given time, with wait times typically lasting 12 to 72 hours, depending on the carrier or the terminal. At one point yesterday, there were six container ships waiting to berth, and at one point last week there were eight container ships anchored outside the port complex, he said.

Louttit said the Marine Exchange hasn’t determined if the ships are waiting more for berth slots at Los Angeles or Long Beach, or any particular terminal, or if it’s affecting any container line specifically. “We have determined no pattern at either port or any particular terminal or line,” Louttit said. “It’s affecting everybody.

There are several reasons for the delays. One is that container ship traffic is relatively high at the port complex right now, Louttit said. The Marine Exchange of Southern California normally records an average of 365 container ships each month, but they’ve already counted 391 container ships so far in October and the month isn’t over yet. In September, the Marine Exchange saw fewer ships than normal, finishing the month 21 ships under target at 344.

Another reason for delays is the fact that ships in the trans-Pacific trade are getting consistently larger, requiring longer times at berth, often as many as four days, before ships can be unloaded, reloaded and sent back out to sea. The wait times are also occurring at a time of severe terminal congestion throughout the port, where shippers say it’s taking sometimes weeks to evacuate containers from terminals due to a shortage of chassis and drayage drivers, and more recently slowdowns by members of the ILWU.

The Port of Long Beach reported today that container traffic rose 7.3 percent year-over-year in September, the busiest September since 2007, the port’s peak year. Similarly, September container volume at Los Angeles was up 9.0 percent, the single busiest month at the port since August 2006.

Congestion at the ports of Los Angeles and Long Beach have been growing worse, with no relief in sight. The executive director of the Port of Los Angeles, Gene Seroka, told JOC.com yesterday that efforts to fix the congestion problem in Southern California will fall short until the International Longshore and Warehouse Union and Pacific Maritime Association negotiate a new contract.

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We can HELP!  If you are interested in other means of transportation for your imported or exported goods, call us today at 901-356-7700 or complete the form on our Contact Us page.

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Congestion at Los Angeles-Long Beach Ports

Source: Journal of Commerce

From JOC:
“Congestion at the ports of Los Angeles and Long Beach grew worse over the weekend, with no relief in sight as late peak-season container volumes descend on the largest U.S. port complex.”

According to PMA President Jim McKenna – the problems at the ports is the chassis issue:
“The root of all evils in the harbor is the chassis shortage.”

All parties seem to be doing what they can. Based on a meeting with chassis providers, truckers, shipping lines and terminal operators, they are attempting to work out at least a short-term solution to problem. After having met with executives of the three largest equipment providers, they were advised that a long-term solution to the chassis problems will not materialize until early 2015.

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We can HELP!  If you are interested in other means of transportation for your imported or exported goods, call us today at 901-356-7700 or complete the form on our Contact Us page.

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