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Sparx Logistics

01/29/2015

Worsening West Coast Congestion Having Ripple Effect on East Coast, in Canada

According to multiple media outlets, a combination of marine terminal congestion and work slowdowns by the International Longshore and Warehouse Union (ILWU) are to blame for ever-worsening delays for container ships calling the U.S. West Coast. On January 28, the Marine Exchange of Southern California reported that 17 vessels were awaiting berths at Los Angeles-Long Beach, while the ports of Oakland and Tacoma reported five and six vessels as anchor, respectively. 

 

The news of increasing congestion comes on the heels of the first positive news in months related to contract talks between the ILWU and the Pacific Maritime Association (PMA). On January 26, the PMA confirmed that a tentative agreement on container maintenance and repair had been reached, theoretically clearing a major hurdle that had dogged negotiations since the start of 2015. However, other significant issues such as wages, pensions and contract length have yet to be resolved.

 

Prolonged West Coast congestion has also led many U.S. shippers to reroute cargo to the East Coast. As a result, spot rates via the East Coast have reportedly risen to record levels, more than doubling the current index for the West Coast, according to the January 23 Shanghai Containerised Freight Index.

 

In addition, port congestion in the U.S. ports has begun to trickle north and impact Canadian ports. According to Ruth Snowden, Executive Director of the Canadian International Freight Forwarders Association, numerous Canadian importers are “loading in Asia and expecting a shipment in 30 days, [but cargo is instead] stuck at an American port for 10 to 12 days.” The delays, Snowden added, have stretched to as high as two to three weeks. Canadian exporters are also being impacted, as carriers attempting to make up days in their sailing schedules are shortening their loading windows for exports, causing some shipments at Canadian to be left behind.

 

SPARX logistics will continue to monitor this situation and keep our customers apprised of the latest developments. If you have questions related to specific shipments, please feel free to contact your SPARX representative.

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