Logistics Hot Topics

In our weekly hot topics report, we are focusing on the USA congestion situation. With record levels of imports continuing to flood the ports and terminals in the USA, the challenges of moving cargo in and out of terminals, as well as the return of empty containers continues to mount.  It is a complicated situation to grasp as so many parties are involved in the overall transaction, and our goal today is to outline the trouble spots.

LA/Long Beach/Oakland/Seattle: The West Coast ports remain extremely backed up. On Wednesday, 44 vessels were anchored outside LA/Long Beach creating a trickle down of delays at the local terminals that extend north to the other ports. Carriers are often omitting Oakland or Seattle on their schedules to try to “catch up” after discharging at the key volume port of LA/Long Beach. With volumes at record levels, and all parties trying to pull cargo before demurrage begins, all local storage facilities are at capacity and there is just no space to store containers once they are pulled. This leads trucking companies to insist on a live unload AND a confirmed appointment to return the empty unit. The strain on the system is incredible right now, and is exacerbated by an overall staffing shortage situation at almost every warehouse. Demurrage and detention are almost inevitable, so be prepared for extra costs.

NY/Norfolk/Savannah/Charleston: The East Coast ports are also seeing incredible volumes, and while the ship backlog is not as significant, the terminals are all congested, warehouses are full, and truck power is maxed out. Truckers that used to handle refrigerated loads are no longer doing so due to the additional hassles of genset availability. Additionally, in order to free up trucker time and equipment, truckers are pushing for transload services where previously a long haul would have taken place. 

Miami/Port Everglades/Houston: The Port Everglades terminal is currently one of the bright spots with little congestion and quick turnaround. Miami and Houston are congested but not as extreme as the ports mentioned above, and, in general, truck power is available to pull containers within the free time. However, some truckers are charging a congestion fee of $150 per container when pulling out of Miami and South Florida terminals, so just be aware if you have cargo traveling into those areas.

Inland points/Railheads: The situation at rail locations in the Midwest remains critical. The backlog into Chicago from the US West Coast is still miles long, and chassis shortages are running rampant, delaying removal of containers from rail cars and delaying availability for pick ups. Once grounded, the free time at the rail is generally limited to 2 days, and with a lack of truck power and chassis, this is often difficult to manage.

Demurrage/terminal storage/detention: All of these terms can be confusing, and you can be subject to all three items on any one container. Demurrage is charged by the shipping line per day per container from the date of the last “free” day on the terminal until removal from the terminal. Free time can vary by line and by contract, but is usually 4-5 days. Terminal storage is charged by the terminal for storage of the container from the last free day. This time period can be different that the shipping line time period, and is paid separately.  Detention (or per diem) is charged when the shipping line’s equipment (ie your container) is outside the terminal for longer than the designated free time (again, this can vary, but is generally 4-5 days). With appointments for empty return of containers difficult to obtain, the detention charges can add up quickly and you may get a surprise invoice on something over which you have very little control. Additionally, terminals and carriers have different rate structure for different ports/terminals. Most publish their tariff rates on their websites, but it is not easy to find, nor interpret. This is one of the areas that the FMC is looking at and WSSA will be very involved with on the new National Shipper Advisory Committee.