Mario Cordero, CEO of the port of Long Beach, wants increased collaboration with neighboring Los Angeles to compete for traffic, reports Loadstar.
Recovery
Having lost ground to competitors on the east and Gulf coasts, US west coast ports are enjoying a rebound in traffic and are poised for another spike in volumes.
LA and Long Beach saw their container throughput slump 11.2% and 12.2% respectively overall last year, but their fortunes rose hugely in the second half. In November, they posted gains of 19% and 24% respectively.
The recovery, triggered by the labor contract agreement that prompted cargo owners to return with their Asian imports, got additional momentum from a stronger-than-anticipated peak season. Now it stands to gain further impetus from the issues affecting routes through the Suez and Panama canals.
Gross Transportation Consulting is predicting strong gains for US and Canadian west coast ports in the coming weeks, because of these issues. Container pricing has been cited as an indication of strong demand in the sector and capacity limitations owing to longer sailing times on alternative routes.
In its weekly update, Freightos noted last week that ocean rates from Asia to the US west coast had climbed 74% since mid-December and were set to rise at least to $5,000 per 40ft in February before the Chinese holiday factory closure. Freightos warned that there could be congestion at some import hubs and, potentially, shortages of empty containers.
According to most observers, US west coast ports should be able to manage the expected higher volumes without significant disruption.
Meanwhile, Long Beach is gearing up for a major capacity increase, having garnered $643m in grants for its Pier B on-dock rail project, which is set to double the size of the rail yard and more than triple capacity, said Mr Cordero in his state of the port address on 18 January.
He emphasized the need for Long Beach and Los Angeles to work more closely together.
However, he did not elaborate on the areas collaboration should be pursued. The ports have worked together on infrastructure projects like the Alameda Corridor to move goods between the ports and the interior, and on green initiatives like the Green Air Action Plan. Last year, each pledged to spend $300,000 on a plan to retrofit two vessels with low-pressure exhaust gas recirculation and a multiple fuel conversion system, so they can run on liquified natural gas or ammonia.
One obstacle on this front is the ports’ rival data platforms. So far there has been no indication of any intention to tackle this issue.
For cargo owners and forwarders, a more immediate question is whether the railways will be able to shoulder a surge in volume. Last winter, there were serious performance issues, particularly at Union Pacific, which was hauled before the US Transportation Safety Board for its excessive use of embargoes, blaming severe weather events and arctic temperatures.
According to numbers from the Association of American Railroads, rail volumes in the US were down 1.1%, year on year, for the first two weeks of this year. However, intermodal traffic increased 2.7%.
Logistics firm JB Hunt, a major intermodal marketing firm, reported a 6% rise in intermodal traffic in the fourth quarter. After climbing 6% in both October and November, it jumped 18% in December.
Management attributed the growth to an unexpectedly strong peak season and declared itself unable to make predictions on demand for the months ahead. However, diversions of imports to west coast gateways would boost volumes, it noted.
It remains to be seen how strong this boost will be and how the rail carriers will cope. Importers have cause to be nervous.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Loadstar
