The effects of the coronavirus on the global supply chain are spreading to marine container terminals at the ports of Los Angeles and Long Beach.
Record numbers of blank sailings in recent weeks have reduced import cargo volumes so low that terminal operators have resorted to canceling work shifts throughout March to save on longshore labor costs. When a blank sailing is announced, the vessel is removed from service and no longer calls on the port, so there is no vessel arriving for the workers to service.
The shift cancellations mean truck gates are also closed, making it very difficult for truckers to return empty containers. Appointment slots are limited, with some terminals announcing restrictions for empty returns, only issuing appointments if the driver is also picking up a full container for delivery, or refusing to accept empties altogether due to lack of space.
“It’s a growing issue, and it will be a massive equipment issue if it continues,” Weston LaBar, CEO of the Harbor Trucking Association, told JOC.com.
For shippers who typically terminate their boxes in LA-LB, these challenges in returning empties may mean you need to hold onto equipment longer, which could result in the need to pay for additional chassis time (detention charges).
When empty containers can't be returned to the terminals, they have to go somewhere.
Many are left sitting on chassis at warehouses, importer's facilities and trucker yards, taking the equipment out of service until they can be returned.
This may result in downstream issues where chassis are unavailable to use to pick up import containers coming off of ships.
So far, this hasn't been an issue due to the lower than usual volume of imports, but we are keeping a close eye on this situation as volumes begin to return to normal levels now that factory production in China has resumed.
A reduced workforce at container terminals in March may mean shippers need to hold onto their empty containers for longer than usual.
Our advice is to budget for a couple extra days of chassis time so you aren't caught off guard if additional demurrage and detention fees are issued by the steamship lines.
If you attempt to return an empty back and it is refused, document and keep a record of it as proof that you tried but couldn't get the empty back. This could help if you need to dispute any charges with the ocean carrier.
We are monitoring this situation and will keep you informed as it develops. Should you have any questions, please contact your local UWL customer service representative.
For more information on demurrage and detention fees, check out our helpful guide: Clarifying the Difference Between Demurrage, Detention, and Per Diem fees.
Learn more: LA-LB work shift cancellations hamper container returns (JOC.com) >>