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Oakland Port Seeks to Recover Lost Shipping Services

Thursday, 14 October 2021 | 12:00

The Port of Oakland, Calif., is winning back ocean carrier services that moved away in recent months, in an appeal to shippers looking for an alternative to Southern California’s jammed-up gateway.

In the coming weeks, French container shipping line CMA CGM SA is resuming a weekly service from China to Oakland and Switzerland-based Mediterranean Shipping Co. is launching an Oakland route to Southeast Asia. These follow two routes added in July and August by Honolulu-based Matson Inc. and Taipei-based Wan Hai Lines Ltd.

These so-called first-call services, in which ships arriving from Asia make their first stop at Oakland, avoiding delays at other ports, restore some of the operations Oakland lost after backlogs arose earlier this year. The backlogs pushed container lines to other ports and contributed to bottlenecks at the ports of Los Angeles and Long Beach.

The midsummer reductions cut the double-digit growth pace in imports into Oakland down to nothing and pulled out capacity for U.S. exporters that ship through Oakland to Asia-Pacific markets.

“I think we’ve missed out on quite a bit,” said Bryan Brandes, the port’s maritime director.

Oakland’s struggles to maintain its oceangoing services this year highlight the difficulties facing the maritime sector and shippers as they seek to avoid port bottlenecks around the U.S. While several ports are severely congested, with Los Angeles and Long Beach showing the steepest backups, others are more lightly used as carriers eliminate calls at some ports and concentrate services to handle their operations more efficiently.

“The whole West Coast is just a mess and it’s going to stay a mess,” said Craig Grossgart, senior vice president of global ocean for Seko Logistics, an Itasca, Ill.-based freight forwarder.

Mr. Grossgart said Seko Logistics this year has been caught up in logjams at most ports along the West Coast of North America from British Columbia to Southern California.

Congestion at major seaports, terminals, rail yards and warehouses has doubled the time it takes products to get from factories in China to retailers in the U.S. The slowdown has contributed to skyrocketing shipping rates and shortages of everything from home appliances to fake Christmas trees.

At the nation’s busiest seaborne gateway of Los Angeles and Long Beach, more than 60 ships at a time have waited off the coast for a berth in recent weeks. In the Pacific Northwest, at the ports of Seattle and Tacoma, the offshore flotilla recently reached between 15 and 20 ships, port officials said.

Big shippers, including Walmart Inc. and Home Depot Inc., have taken the extreme measure of chartering ships to less-congested ports in a bid to stock up.

Several ocean carriers added services to Oakland earlier this year as congestion grew in Southern California, only to see that port overwhelmed between March and July as dozens of ships quickly backed up off the San Francisco Bay.

The logjam peaked at almost 30 vessels in June, according to port officials, and ocean carriers cut or reduced seven services to get delayed ships back on schedule and to speed empty containers back to Asia for more imports. In August, just 68 ships called at Oakland’s container terminals, a 40% reduction compared with 2020.

The service decline at Oakland has hurt American farmers who use the port as an export hub.

Peter Schneider, president of TGS Logistics, a trucking company that works with exporters, said nut exports fell sharply as companies looked for alternate routes to overseas markets. “I’ve got a lot of customers who have never shipped through L.A. and Long Beach asking to ship through there because there are no services through Oakland,” Mr. Schneider said.

Adding service at Oakland won’t fix every shipper’s problems, said Nathan Strang, director of ocean trade lane management at San Francisco-based freight forwarder Flexport Inc. Mr. Strang said the new services will help companies shipping to the Bay Area or bound for inland rail links but that shipments bound for Southern California would get quickly bogged down by a constrained supply of trucks and drivers.

Port of Oakland’s Mr. Brandes said the congestion was caused by a shortage of workers. Hundreds of dock workers have since been added, he said, setting up terminals to handle more loads. “There’s room for us to grow,” he said.
Source: Wall Street Journal

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