West Coast Port Congestion

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West Coast Port Congestion

Port Congestion Update

A year after the COVID-19 pandemic first halted global supply chains by closing factories worldwide, delaying U.S. agriculture exports, and constraining domestic manufacturing, we are still experiencing the aftershocks with overwhelming congestion.

The cost of shipping a container has increased by 80 percent since early November and has nearly tripled in the past year.

At the Port of Los Angeles last week there were 42 ships anchored offshore, waiting to be unloaded, while every warehouse within 60 miles was at full capacity. Inbound cargo volumes in December were more than 23 percent higher than one year earlier.

There is a shortage of dock workers amid California’s worsening COVID-19 outbreak. Southern California waterfront employers said the dockworker infection rates have contributed to a reduction in terminal productivity at the ports. In December, about 100 ILWU members tested positive for the virus in Oakland, Portland, and Seattle-Tacoma combined, compared with 360 in Los Angeles-Long Beach. During the first two weeks of January, there were 34 positive cases in the northern ports, and 268 in Southern California, which indicates cases are rising.

The ports are also facing equipment shortages, chassis shortages, excessive container dwell times, long truck queues, and import distribution warehouses at capacity. This is a global problem that may get worse before it gets better. Over one-third of containers transiting the world’s 20 largest container ports, failed to ship when scheduled, according to Ocean Insights.

Maersk Essen

The Maersk Essen suffered a significant container loss in the Pacific while sailing towards Los Angeles. Approximately 750 containers were lost overboard. The 13,200 TEU vessel was en route from Xiamen, China to Los Angeles, California.

The Maersk Essen is the latest of at least four significant container loss incidents to take place in the trans-Pacific trade lane since early November, highlighted by the loss of nearly 2,000 containers on the ONE Apus on November 30. As a result, the incidents have prompted calls for carriers to urgently review container lashing practices and stack height restrictions.

Ocean marine insurance policies usually cover the costs of the goods (including the transportation), as well as, coverage for damage to the vessels involved in shipments and any legal liability arising in the course of the transit of the ship. If your shipments are insured with us, we are happy to go over the details with you. If you don’t insure your shipments through us, we’re still happy to help you review your insurance policy. Now is a good time to confirm you have ocean marine insurance.

If cargo has ocean marine insurance, the insurance company provides the guarantee (bond) and any contribution required for the loss. The liability for General Average makes purchasing marine cargo insurance a vital business decision.

If you have any questions about marine cargo insurance or would like a quote today, please reach out to your Krieger Worldwide representative.

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