The anticipated 25 percent tariff increase scheduled for January 1, 2019 is in current delay by the Trump administration, however, shippers have been actively moving billions of dollars of goods into US ports for several weeks to arrive before January 1, 2019.
As a result, the Port of Los Angeles and Port of Long Beach have had to withstand a significant surge in container vessels. Both ports have had to take on extra container vessels (loaders) over the last month. Inland ports, such as Chicago and Memphis, have also been impacted due to increased rail cargo. There are several additional factors that have led to the congestion:
- YOY volume has increased more than 4 percent vs 2017, adding to the overall heavy volume into the ports of LA/LGB
- Weather has played a significant role in vessel delays especially out of Shanghai and North Central China
- The above-mentioned tariffs have caused many shippers to forward Q1 2019 cargo into Q4 2018. This additional volume is now arriving to the port which is adding to the overabundance of cargo.
- Consignee warehouses and distribution facilities on both coasts and throughout IPI positions are full, causing delays with the container unloading which continues to create chassis and container shortages.
It is anticipated that these conditions will continue through the next several weeks as the system begins to flush the excess cargo. Terminals such as the Port of Los Angeles continue to be overloaded and unable to keep up with inland freight trucker appointments. Currently, trucks are waiting as much as five hours to enter the ports.
Ascent Global Logistics will continue to monitor for information regarding port congestion. If you have additional questions, please contact us or reach out to your Ascent Global Logistics Key Account Representative directly.