Rail container dwell times in Southern California exceeded 11 days in April, the longest dwell times so far this year. Photo credit: Shutterstock.com.
Terminal operators at the ports of Los Angeles and Long Beach are concerned that increasing rail container dwell times at their facilities will severely compromise their ability to handle import volumes during what promises to be a peak season that arrives four to five weeks early this summer.
Rail container dwell times in April averaged 11.2 days, up from 10.5 days in March and the highest level of the year, according to the Pacific Merchant Shipping Association, a nonprofit group that represents carriers and terminals, mostly in legislative matters. This is congesting the terminals and slowing down the entire port-related supply chain.
“The longer containers stay on terminals without getting picked up, the more unnecessary moves have to be made in order to reach older containers underneath stacks of newer ones, further contributing to the ongoing congestion,” said Jessica Alvarenga, manager of government affairs at PMSA.
Conversely, the average dwell time for containers that leave the terminals by truck for local delivery continues to improve, shrinking from 3.77 days in March to 3.65 days in April. Local-delivery dwell times have declined in each of the last four months from an average of 5.12 days in January.
Alan McCorkle, president of Yusen Terminals in Los Angeles, said terminals have “been dealing with this backlog since October. It hasn’t gotten any better.”
“As inland supply chain constraints moderate, the resulting velocity improvement on our rolling stock will generate more than enough capacity to handle the current backlog as well as increasing volumes in Los Angeles-Long Beach into the future,” a BNSF spokeswoman told JOC.com Thursday.
UP in April has increased its well car capacity moving to and from Los Angeles-Long Beach as train velocity improved along its intermodal network, and UP is also sending additional locomotive resources west to handle increased cargo volumes, a spokeswoman for the railroad told JOC.com.
Terminal operators in the busiest US cargo port said their ability to rapidly vacate containers for local delivery from their facilities is the only thing preventing the excessive rail container dwell times from sending the terminals into total gridlock. They are counting on delivery times for local containers in the coming weeks to continue improving to help terminals remain fluid as the traditional peak shipping season approaches.
“The local-delivery dwell times must continue to go down faster than the rail container delivery times are going up,” said Dan Bergman, CEO of the TraPac terminal in Los Angeles.
Peak season just around the corner
Terminal operators say improving the rail dwell times is particularly urgent because the window before holiday season merchandise begins to arrive from Asia is narrowing.
Jon Monroe, an advisor to non-vessel-operating common carriers (NVOs), said that because of congestion at ports in Asia and the US, and a shortage of vessel capacity following 10 consecutive months of record or near-record import volumes, retailers are pushing up their purchase order cycles by four to five weeks. That means the peak season could start in early July, rather than in August as it has in past years, he said.
Ed DeNike, president of SSA Containers, which operates three container terminals at the Port of Long Beach, said that if it were not for the railcar shortage and the resulting backlog of rail containers it has created at SSA’s terminals, SSA would be ready right now for the increased import volumes that are anticipated during the peak season.
“The rail situation is terrible. It’s very serious,” he said. “Instead of asking me when we’ll be ready for the peak season, ask the railroads when they’ll be ready.”
The good news, terminal operators say, is that excessive rail container dwell times in Los Angeles-Long Beach are an outlier, as almost all other indicators of productivity in the port complex are improving. The number of container ships at anchor awaiting berthing space, for example, has fallen to 18 as of Thursday, down from more than 30 container vessels that were at anchor each day from December through March, according to the Marine Exchange of Southern California.
Truck turn times at the container terminals in April averaged 74 days, which was down from the recent high of 93 days in December, according to the Harbor Trucking Association. Average truck turn times were consistently in the 60- to 70-day range in the first half of last year, before US import volumes began to accelerate in July.
Although some ports are experiencing a truck capacity shortage due in part to drayage driver turnover, that it not the case in Southern California, according to Weston LaBar, CEO of the Harbor Trucking Association. There would be sufficient trucks and drivers to serve the ports, provided the marine terminals were not congested and drivers could perform their typical average of three turns per day, versus just one or two today, he said.
“We’re extremely busy, but we don’t have a truck shortage. Throwing more drivers at it isn’t going to solve the problem,” LaBar said.
Similarly, the longshore labor shortage that emerged in Los Angeles-Long Beach in December due to the COVID-19 pandemic has passed, said Jim McKenna, president of the Pacific Maritime Association, which represents terminal operators in coastwide contract negotiations with the International Longshore & Warehouse Union. The PMA and ILWU continue to register more dockworkers and train them to operate container-handling equipment, he said. Although there is still an official cap of four work gangs per vessel, on some days there is an overflow of dockworkers so after every terminal has been allotted its four gangs, those terminals that seek additional labor are usually receiving it, McKenna said.
Bergman confirmed that TraPac more often than not is receiving more than four work gangs when it requests them. “Labor supply is not an issue. The union has done a great job,” he said.
Chassis shortages, which were a significant problem that contributed to congestion earlier in the year, have also been corrected, said Ron Joseph, executive vice president and COO at Direct ChassisLink. “There are plenty of chassis,” he said.
According to the Pool of Pools website operated by the three intermodal equipment providers (IEPs) in Southern California, the number of chassis at the container terminals and local railyards recently has been in the range of 24,000 to 25,000, up from 20,000 earlier this year. The number of chassis/container units sitting at local warehouses waiting to be unloaded has declined to 36,000 from more than 41,000 earlier in the year.
Joseph added, however, that the average street dwell times of those chassis is still about seven days, and that will need to come back down to four days or less to promote fluidity.
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