As many of our customers know, the U.S west coast port congestion continues to affect supply chain management and sets record numbers for ship wait times.
Suntsu has been experiencing delays on most of our ocean shipments since the start of the pandemic. What was once one to two-week delays has turned into six to eight-week delays, and experts say these delays will continue well into 2022.
The ports have tried to find different tactics to ease the cargo jam and cut congestion as efficiently as possible. The Traffic Mitigation Fee (TMF), set to begin Dec. 1 through Jan. 31, is a fee that will be charged during peak hours. This is in an effort to encourage more shipping companies to use off-peak hours to reduce overcrowding and to expand the use of warehouses, trucking and distribution centers. The TMF will range from $78 to over $150 depending on the size of the container moving through the terminals.
A new ship queuing system that was scheduled to start Nov. 16 requires ships to anchor 150 miles off the coast versus the 40 or so miles they do now, which aims to reduce ship congestion as well as pollution.
During the month of October alone, container dwells time for truck delivery, originally about 4 days, set a record number of 7.6 days on average in LA ports. As of Nov. 22, the average anchor time for cargo ships waiting in the bay for unloading is 18.5 days.
Furthermore, both the LA and Long Beach Ports have delayed their strategy to fine shipping companies once again after seeing a noticeable reduction in idle containers after the announcement of such fines. The fines, that were originally announced in October, have been scheduled to go into effect on Nov. 22, in time for the approaching holiday season.
Asian imports coming into the LA and Long Beach ports are also having some difficulties in supply chain coordination. Recently, China has begun enforcing the “Dual Control of Energy Consumption Policy” which requires businesses to cut down on fossil fuel consumption. Some businesses are cutting down on energy by cutting out one workday a week. This in turn causes a need for a rework in their production shifts as well as implementing future planning for orders and coordinating supply chain resources. This policy is forecasted to last until March 2022. This policy may help lighten the load of imports coming into California ports and give them a chance to catch up with demand.
While many of these changes are drastically affecting business and their operations, Suntsu will continue to work hard to get ahead of any delayed shipments and keep our customers up to date about the situation.
To avoid these delays on production schedules, we recommend that our customers release any orders they need for Q1 2023 now.