While the current number of container ships queuing outside the ports of Los Angeles and Long Beach is well below all-time highs, the pile of imported containers at the Southern California terminal yard is approaching peak levels.
The container backlog at the Port of Long Beach just crossed the red line. The number of import containers currently sitting at the terminal for 9 days or more is higher than the all-time high of 28 October 2021. On October 28, 2021, the port cleared the demurrage containers for the first time in order to reduce the number of containers in the yard.
The role of fee plans has largely disappeared
Back in October, the Ports of Long Beach and Los Angeles announced a controversial plan to charge long-term containers at terminals (though the collection has been delayed).
On January 20 this year, the White House said, "The container charge program continues to play a key role in improving port liquidity and... since November 1 last year, the number of demurrage containers stacked on terminals has decreased by approximately 60 percent. ."
But now that effect has completely disappeared in the Port of Long Beach and almost disappeared in the Port of Los Angeles.
Status of Demurrage Containers at Long Beach Port
As of Monday, the Port of Long Beach had 28,723 containers stacked for nine days or more, 9% higher than the peak at the end of October last year.
The data shows that the number of long-dead containers has increased by 40% in the past 12 days, mainly due to railway containers stranded at the terminals.
Status of Demurrage Containers at the Port of Los Angeles
As of Monday, 33,999 import containers had been at the Port of Los Angeles for nine days or more, a 9% decrease from last year's Oct. 24, but a 20% increase over the past 12 days. And this number exceeds the number of containers stranded for 0 to 4 days (33,309), and is 2.7 times the number of containers stranded for 5 to 8 days (12,421). A total of 79,729 import containers were stacked at the Port of Los Angeles on Monday.
The last time the number of import containers stranded at the Port of Los Angeles for nine days or more was this high was on November 18 last year.
Project44 data on the FreightWaves SONAR platform confirms the increase in container dwell time at Southern California ports. The average dwell time of imported containers at both ports in the most recent week was seven days, with the ports of Los Angeles and Long Beach up 32% and 41%, respectively, since the first week of May. The last time the figure was this high was in the first week of December last year.
Will demurrage be levied?
If the two-port demurrage collection scheme is implemented, a charge of $100 is required for containers detained for 9 days or more, with an increase of $100 per day (i.e. $200 the next day, $300 the third day, and so on) , which means that logistics costs will rise rapidly.
If charged on Monday, the total would have been $6.3 million, with a surge every day thereafter.
Every Friday since mid-November, the ports of Los Angeles and Long Beach have issued a joint statement saying the fee has been delayed by a week, citing a drop in the number of stranded containers since the plan was announced.
Compared with the end of October last year, the total number of imported containers at the two ports fell by 2%, as the number of the Port of Los Angeles was lower than last October. But given the current trend, the decline could turn to an increase by this Friday.
Port of Long Beach Chief Executive Mario Cordero said: "With delays to westbound trains due to congestion at rail junctions elsewhere in the United States, rail entry boxes will have to wait. We will monitor the situation closely in the coming weeks."
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