Why Are Shipping Carriers Suspending Calls to Oakland Port?
Until early 2021, the Port of Oakland did not have any first calls inbound from Asia. However, due to record volumes of imports from China last year, Los Angeles-Long Beach ports were experiencing severe congestion, equipment shortages, and bunching. To help manage this increased demand, carriers added inbound calls in Oakland.
Ironically, in recent weeks, the congestion at the Oakland port has been so bad that carriers have been waiting 10-12 days for berth space. As a result, major carriers have canceled services from China to Oakland for the next couple of months.
Last week, Zim Line rerouted its premium service from North China to Los Angeles, noting that it cannot meet customer needs and established standards with vessel delays of 10-12 days. Similarly, Central China E-Commerce Xpress began rerouting service last week directly from China to Los Angeles, where the average delay is about half that of Oakland.
This week Hapag-Lloyd announced that it will drop calls in Oakland until at least mid-August, and CMA CGM schedules show canceled calls in Oakland for the next two months.
What Has Caused the Congestion in Oakland?
While increased volume is certainly a factor, it is only one of the issues leading to the congestion in Oakland. Labor shortages and the unavailability of a crucial berth have escalated the problem, leading to the substantial delays that carriers are currently experiencing.
Oakland has been experiencing a longshore labor shortage in recent months which has forced terminal operators to use no more than two work gangs per vessel. This is a new restriction, and it is directly impacting the port’s efficiency.
Adding to the problem caused by the labor shortages is the fact that one of the four berths available at the Oakland International Container Terminal (OICT) has been out of service since January. OICT handles about 75% of the port’s container volume, and it has only been operating at 75% because of the installation and testing of new super post-Panamax cranes in one berth.
Record-level volumes of imports from Asia coupled with labor shortages and reduced capacity at OICT created a perfect storm leading to the recent delays in Oakland, where 20 or more vessels a day have been forced to anchor and wait for space.
What to Expect Going Forward
The delays in Oakland should improve over the next two months. On May 27, the berth in OICT was reopened, which means more capacity. Additionally, the International Longshore and Warehouse Union and Pacific Maritime Association are working to expedite programs to train and register longshoremen for skilled positions.
As a result, Oakland’s maritime director, Bryan Brandes, believes that the congestion and vessel bunching should be resolved by late July or early August.
The team at Clear Freight is closely monitoring this issue and the many other challenges that shippers have been facing in recent months. Contact us today to talk to one of our team members about how we can support your supply chain and make logistics less stressful for you.