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Transportation

Congestion at the Ports of Los Angeles-Long Beach have shippers in a frustrated bind due to detention and demurrage charges building up.

Much of the congestion is due to businesses front-loading imports from China to avoid the new set of tariffs that were supposed to take effect on Jan 1, 2019. The tariff deadline has been delayed to March 1 but that came after many ships were already on the water.

On the other side of the U.S. the Port Authority of NY/NJ is exploring an expansion to accommodate 18,000 TEU container ships into its facilities. The expansion would include a widening of shipping lanes that would permit such super-sized carriers to pass each other going in and out of the harbor and free up a chokepoint for this shipping lane. However, another developing move would be to expand the terminal facilities before the Kill Van Kull Bridge. This would be significant departure from the port’s sunken costs to deepen the channel and raise the bridge. TEU traffic to the port has increased 6.5 during the first three quarters of 2018 compared to the same time a year before. While safety concerns have kept regulators recommending that the expansion doesn’t go much further, the number of mega-vessels has been increasing from 7 per month entering the harbor to 19 per month.

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