LA/LB: What is causing all of the terminal congestion on the West Coast?


Kellie Lynch


Jan 10, 2019 8:51:54 AM


International Trade News, Current Events, Imports, North America

Trade wars, holidays, and chassis shortages have combined to create a "perfect storm" of

terminal congestion in the ports of Los Angeles and Long Beach.  Terminal operators are

struggling to dig out of the backlog, with the hope of it clearing in coming weeks.  In this

article, we look at 5 major factors contributing to the current congestion on the West


What is causing all the containers to pile up at LA-LB?


1. Trade wars lead to surging import container volumes

Prior to the announcement of a 90-day trade war truce, importers rushed to get their cargo

into the states to beat the January 1st deadline where the U.S. was planning to raise

existing 10% tariffs on $200 billion of Chinese goods to 25%.  

“There’s no doubt we’ve seen a surge in cargo because of the concern over rising tariffs,”

Gene Seroka, executive director of the Port of Los Angeles, told American Shipper.

“We’ve also been impacted on the export side by retaliatory tariffs (from China against

U.S. exports). The imbalance we normally see is a little more exacerbated than usual,” he


Ocean carriers added an unusually large number of extra loader vessels towards the end

of 2018 to handle all of the front-loaded shipments.  These vessels were expected to

bring an additional 128,000 TEUs of freight into the Los Angeles-Long Beach complex,

which was already operating at capacity from the normal peak-season volume.  While this

tactic may have helped BCOs get their cargo into the U.S. before the tariffs went into

effect, it massively overwhelmed the terminal operators and distribution warehouses.  

“We don’t have any space on dock or off dock,” Ed DeNike told the JOC. DeNike is

president of SSA Containers, which operates three container terminals in Long Beach. “It

will take about two weeks to clear out,” he said.


2. Holidays cause a temporary labor shortage

Christmas and New Years are considered no-work days under the current International

Longshore and Warehouse Union (ILWU) contract.  Additionally, veteran longshoremen

typically take vacation days around this time, which left many of the container terminals

short staffed.  Those who did work at the terminals over the holiday season tended to be

greener, less-experienced staff. 

Seroka said that marine terminals “are working around the clock. We’ve seen a lot of

cargo come through, and it’s been a challenge to say the least.”


3. Factories ramp up production ahead of the Chinese Lunar New Year 

Chinese New Year (CNY), also known as

"Spring Festival," is a huge holiday in China, comparable to Thanksgiving or Diwali. 

During the holiday, which takes place this year beginning on Tuesday, February 5th, all

factories in China shut down without exception.

The official CNY celebrations last for one week, however many factory workers take

extended leave during CNY and factories remain shut down for 2-3 weeks or more. 

When factories reopen, they struggle to operate at full capacity for some time after CNY

because workers often use the holiday to find other more lucrative job opportunities and

don't return to work. This can lengthen production times and create a backlog of orders for

the factories to fill. 

To deal with the impact of Chinese Lunar New Year, many manufacturers, retailers and

other importers rush to ship their products out of ports before the country begins shutting

down.  This puts tremendous pressure on the factories to produce the goods and causes

a rise in the number of containers being exported from China in the months leading up to

the celebration. This extra volume tightens vessel capacity and puts a big strain on

container terminals who must handle all the containers as they come into the U.S.. 


4. Warehouse space is limited from the influx of cargo

The manufacturing sector, which accounts for around 50% of imports moving through LA-

LB, was heavily impacted by the U.S. tariff increases.  Retail also took a big hit.  With

many BCOs in these industries rushing to get their goods into the U.S. ahead of the tariff

increases, the goods need to be stored somewhere. 

Shippers lucky enough to retrieve their cargo from the congested ports must unstuff the

containers and return them to the ports in a timely fashion or else they face

hefty detention and chassis charges.  Many of them rely on local warehouses to store and

distribute this inventory. As a result, warehouses in the area are packed to the gills with

auto parts and retail goods.  

With nowhere for the cargo to go, it either sits at importer's warehouses waiting to be

unloaded, or piles up at the terminals until it can be picked up and delivered.  


5. Driver and chassis shortages leave containers stuck with nowhere to go

When container terminals are filled beyond capacity, they sometimes have to refuse to

accept empty containers, often without warning.  This creates a ripple effect throughout the

logistics ecosystem. 

Normally, container truckers operate in a dual-

transaction model, where they arrive at the port, drop off an empty container, and pick up

a loaded container to deliver to their customer. 

If the terminals refuse to accept empty returns, or redirect a trucker to a different facility, it

is very difficult for truckers to make their appointments on time. 

This cuts their productivity in half, can cause them to miss deadlines to return the empty

containers, and can even result in detention charges.  All of these factors combine to

create an artificial driver shortage. 

Additionally, if truckers can't get appointments to pick up their import containers within the

allotted free time, shippers can incur demurrage charges for containers that sit at the

terminal facilities beyond the last free day. 

The backlog affects chassis availability, too.  With truckers unable to return empty

containers, they must bring the empties and chassis back to their own facilities to store

them until they can be returned.  And with warehouses filled to capacity, some chassis

with loaded containers are stuck sitting idle at importers' facilities, like "mobile

warehouses", until they can be unloaded.

We are seeing many containers and chassis staying off dock for longer than normal.  In

fact, the average "street dwell" for a chassis currently is five days, which is up from 3.9

days from this time last year. Terminal dwell time for chassis is three days, and around

8% of chassis are out-of-service, according to stats posted on the website of the "Pool of



So what is a shipper to do?

If you are importing cargo into the West Coast and struggling with the current congestion

issues, just know that this situation is temporary. With the Chinese New Year approaching

in February, we should begin to see a drop in import volume.  Port and terminal operators

are working around the clock to clear the backlog of containers and expect the congestion

to ease before the end of January. They have also pledged several longer term solutions to

combat the problem.  

In the mean time, it is important to do what you can to protect yourself from costly

demurrage and detention charges. 

To learn more about what demurrage and detention fees are, and how you can avoid or

minimize these charges, check out our comprehensive guide here: Clarifying the

Difference Between Demurrage, Detention, and Per Diem Fees

Armando Camacho