The largest U.S. gateway for seaborne imports from China is projecting a 25% drop in container volumes this month as the economic impact of the coronavirus spreads across shipping operations far from the outbreak.  “Container ship operators have canceled 40 sailings at the Port of Los Angeles between Feb. 11 and April 1, mostly for vessels coming from China,” port Executive Director Gene Seroka said. “That amounts to a little more than one-quarter of the overall number of ships that would typically call at the port during that time.”

Los Angeles handled the equivalent of more than 705,000 containers last February, so the projected decline would mean about 176,000 fewer containers moving through the port this month. About 9.3 million boxes passed through the port in 2019. Shipping volumes out of China have plunged as the shutdowns in the wake of the outbreak crimp industrial production, with ocean carriers cancelling many sailings from China to the rest of the world since late January.

Just yesterday, Mallory Alexander received notification that the terminals at Los Angeles and Long Beach are limiting gate hours or closing gates for one or both shifts intermittently due to the vast reduction in import traffic. Further, the terminals are also implementing restrictions for mandatory dual transactions, No Drop chassis transactions and potential multiple day closures per week. This process is causing delays in accessing equipment for export, empty returns and export returns. As a result, there may be difficulty timely returning empty import containers; we encourage all cargo owners to work closely with service providers. Some dray carriers are leaving the containers spotted until a redelivery appointment is confirmed at the terminal, in an effort to reduce costs. With the current closures, this period can be up to 72 hours, not counting weekends.

Mallory Alexander is working with our vendors to expedite cargo through the terminals. If you have a question or concern about a specific shipment or shipment deadline, please reach out to your Mallory Representative.

Below is an update in China as it stands today:

Ocean Carriers

Carrier research has indicated that demand is not strong currently, but a forecast of space demand will be steadily strengthened over the next few weeks. We encourage all cargo owners to push suppliers to book early and provide forecasts as a result of voided sailings.

Some carriers are extending current rates until mid-March; but have filed GRI’s for later dates to support any increase in demand.

Airfreight

Some charter flight operators have resumed routes from China to the US. Since demand still exceeds supply, it is expected that many airlines will increase their rates until mid-March, dependent on market fluctuations in key areas such as Los Angeles, San Francisco and Seattle.

Source: Wall Street Journal, Mallory Alexander Asia-Pacific