US exporters should book cargoes 4-6 weeks in advance; ILA-USMX talks break down

HOUSTON (ICIS)–US exporters are being urged to book outgoing shipments four to six weeks in advance as US and Canadian port labor issues are ongoing and could coincide with the pre-Lunar New Year peak season on the Asia-to-US trade route.

For US companies working to export excess volumes to balance year-end inventories, those shipments need to be going out this week.

According to ICIS Senior Analyst Kelly Coutu, increasing export shipments at year end for US petrochemical producers trying to balance year end inventories with weaker domestic demand is becoming increasingly challenging.

“Container availability, especially to South American west coast ports, have been cited by several traders as problematic to secure,” Coutu said.

Yusen Logistics said in a customer advisory that rail terminals at the US West Coast are congested, and inland point intermodal (IPI) dwell times are up to 40 days with terminal utilization above 85%.

Yusen cited Sea-Intelligence data through September showing that global schedule reliability has fallen to 51.4%, down by 1.2 percentage points from the previous month.

The average delay for late vessel arrivals increased by 0.21 days month on month to 5.67 days – the third-highest figure for the month, only surpassed by pandemic highs of 2021-2022, according to Sea-Intelligence.

For cargo shipping out of West Coast ports, Yusen said some rail carriers implemented allocation restrictions because of a surge in traffic, which caused delays in the cargo staging area outside of the ports of Los Angeles and Long Beach, although those restrictions have largely been lifted at present.

For cargo shipping out of East Coast ports, Yusen said most of the major ocean carriers have ended some routes and replaced larger ships with smaller ones for higher volume trades.

Hapag Lloyd is the only carrier that has increased its capacity on these routes in the past 12 months, Yusen said.

For cargo destined for South America, ports along the east coast of the continent are facing congestion and increased waiting times due to high traffic volume.

Bad weather in southern Brazil forced cargo to change routes to other ports, causing delays as this new cargo was processed.

Additionally, ships delayed by the brief labor strike at US East Coast ports are arriving in South America, adding to the existing congestion/delays.

Also, ports in Mexico are facing delays due to bad weather affecting ports on the Atlantic side. High occupancy rates at Manzanillo and Lazaro Cardenas are also reducing how efficiently they operate.

USEC PORT LABOR TALKS BREAK DOWN
While the East Coast labor issue is paused, concerns persist on whether the two sides can reach an agreement by the 15 January deadline.

Talks broke down on Wednesday as discussions centered around automation and semi-automation at the ports.

The US Maritime Alliance (USMX), representing the ports, said the union’s insistence on an agreement that “would move our industry backward by restricting future use of technology that has existed in some of our ports for nearly two decades” contributed to talks breaking off.

The International Longshoremen’s Association (ILA) said the USMX claim that its focus is on modernization and not automation was disingenuous.

“The ILA has always supported modernization when it leads to increased volumes and efficiency,” the union said. “We embrace technologies that improve safety and efficiency, but only when a human being remains at the helm. Automation, whether full or semi, replaces jobs and erodes the historical work functions we’ve fought hard to protect.”

Thumbnail image shows a container ship. Photo by Shutterstock