Container dwell declining in LA port; congestion continues globally

From 87,485 containers in the port of Los Angeles on November 1, 2021 when the dwell fee of $100/container went into effect, the congestion has reduced to 71,493 as on November 5, 2021.

Based on the container dwell report by the LA port, the maximum reduction has been seen in the 0-4 days category (32,930 to 27,037 containers).

In the 13+ days category, container dwell was down from 31,127 to 26,704.

While congestion continues in the U.S, Singapore and Chinese ports are also facing congestions.

(Credit: Sea Explorer)

Congestion has deteriorated in Singapore, and the waiting time for berths is three days. Delays are caused by high inventory utilisation, low productivity, vessel bunching and longer port-stay for contact-less operations protocols. Average dwell time is now three days.

Nearly 317 vessels worldwide, estimated to carry some 2.1 million TEUs, are currently afloat and backlogged, according to Xeneta, an ocean and air freight rate analytics platform.

A saving, if we can call it that, is the decline in freight rates: Drewry’s composite World Container index (WCI) decreased 4.9 percent to $9,195.41 per 40ft container for the week to November 4, 2021.

"The index, however, is 252% higher than a year ago. The average composite index of the WCI for year-to-date is $7,293 per 40ft container, which is $4,701 higher than the five-year average of $2,592 per 40ft container," maritime consultancy Drewry said in its report.

Freight rates on Shanghai–Los Angeles dropped 10% to $9,857 and Shanghai–New York fell 7% to $12,667 per 40ft box.

Drewry is expecting rates to remain steady in the coming week.

Container premium rates on the Southeast Asia to North America route were largely stable as a slight dip in exports from China was offset by a rush to make timely bookings ahead of the Lunar New Year holidays beginning February 1, according to S&P Global Platts.

Maersk, the world’s largest container carrier, issued a customer advisory on container dwell fee saying they will pass on the cost to shippers beyond the permitted time limit.

Hapag-Lloyd, in a North America operation update, said: "Ships are waiting an average 13 days to catch a berth. Total anchorage + berth days for Oct has reached up to 23 days on some services. Both ports are seeing record volumes month after month that challenge the existing port infrastructure. Port delays forcing ships to wait at anchor are expected to continue for the remainder of the year."

The ports of Los Angeles and Long Beach had earlier decided to go ahead with the container dwell fees w.e.f November 1, 2021, but carriers were given time till November 15 to ensure containers were moved from the ports.