Not a single container ship was waiting in front of the ports of Los Angeles or Long Beach on Tuesday. It was the first time since October 2020, in the early days of the COVID-era consumer boom, that the queue had dropped to zero.
“The container ship backup for the ports of Los Angeles and Long Beach has ended,” Kip Louttit, executive director of the Marine Exchange of Southern California, said in a statement to the media. “It’s time to move to a different phase of operations.”
Backup may be over in Southern California, but it’s not over for North America as a whole.
An American Shipper survey of MarineTraffic ship location data and port queue lists found 59 container ships were waiting outside North American ports, mostly along the East and Gulf Coasts, as of Tuesday morning.
That’s still well above pre-COVID levels when numbers were in the single digits. But congestion is clearly easing: the number is down 60% from peaks earlier this year.
The rise and fall of the SoCal queue
Container ship jams off Southern California made headlines in early 2021 and became a symbol of the supply chain crisis.
The Southern California queue of ships shot to new heights in the second half of 2021. The extremely high number of vessels anchored and loitering in close proximity to each other in San Pedro Bay and surrounding waters raised both safety and environmental concerns.
A new queuing system was introduced on November 16, 2021 to address these concerns. Instead of securing a place on the first-come, first-served waiting list, incoming ships were assigned a so-called Calculated Time of Arrival (CTA) once they left their previous ports. Their position in the line was dictated by the CTA, so they didn’t have to race across the Pacific and wait nearby. Ships were asked to voluntarily wait outside port waters. Most were hanging around off the Baja Peninsula.
The new queuing system did nothing to reduce the number of ships waiting. The number continued to rise, reaching an all-time high of 109 container ships on January 9, 2022.
Since then, numbers have fallen due to lower import demand and a shift of shippers to ports on the East and Gulf Coasts, partly due to concerns about the West Coast labor contract expiring.
Ships that are still in the queue are there “voluntarily”.
While Tuesday was declared the end of the backlog by the Marine Exchange, the backlog has practically ended for the past three months.
As of August 24, only an average of seven ships per day are queuing. There were several times three or fewer ships.
The queue could build up again if import demand picks up again or a new supply chain disruption occurs. That being said, the number seems likely to be hovering at very low levels but not completely disappearing, reflecting the single digit numbers since late August.
This is because the queuing system introduced in November 2021 remains in place, with ships still being assigned a CTA. Under this system, a ship is considered “in queue” if its CTA is prior to the time the queue count is recorded by the Marine Exchange. But unlike during the supply chain crisis, ships are no longer in the same rush to dock the moment their CTA comes. (This probably also explains why the queue didn’t go to zero sooner.)
According to Louttit, “Ocean carriers that work with their terminals sometimes choose to arrive after their CTA…because it streamlines their vessel operations.” The queue used to exist due to bottlenecks in the supply chain. What’s left of the queue now exists “by choice”.
Queues in front of other ports shrink
Looking at all North American ports, the total queue peaked at around 150 container ships in early 2021, with most ships waiting off West Coast ports, mainly Los Angeles/Long Beach.
The total fell throughout the spring as the backlog in Southern California eased. Then queues began to form outside ports on the East and Gulf Coasts as shippers diverted more cargo away from the West Coast.
The North American queue rebounded to about 150 in late July, this time fueled by queues outside East and Gulf Coast ports.
Port congestion on the East and Gulf Coasts has gradually eased in recent months. New York/New Jersey and Houston have significantly reduced ship backlogs.
As of Wednesday morning, the largest backlog was on the east coast with 28 ships waiting off Savannah, Georgia. There were 11 ships off the Virginia coast, one off New York/New Jersey and one off Freeport, Bahamas.
Six container ships were waiting on the Gulf Coast off Houston and one off Mobile, Alabama. On the west coast, Oakland, California had the largest line with nine ships waiting. Two other ships were waiting off Vancouver, British Columbia.
Source: Freight Waves by Greg Miller, https://www.freightwaves.com/news/zero-ships-waiting-off-southern-california-59-off-other-ports