SEAFOODNEWS.COM by John Sackton and Michael Ramsingh — December 1, 2014 — The current congestion, or slow down, at the ports of Los Angeles and Long Beach could have a major impact on timely delivery of holiday goods, including shrimp.
Urner Barry’s Foreign Trade Database is showing a 47% drop off in shrimp volume for the Port of Los Angles for the first two weeks of November this year, compared to the same time last year.
The port of New York, meanwhile is up 3% for that period, Savannah is up 11% and Miami is down 2%. Clearly the impact of the LA port slowdown is affecting shrimp.
Next week the US will release official import figures for October. However, data used by Urner Barry shows that we should expect a continued increase; with current volumes for October continuing to rise.
Urner Barry’s Piers data shows a preliminary increase in shrimp imports for October of over 7 million pounds, or 6%.
But this volume is not going through Los Angeles, and the November monthly impact could be even more significant. The same database shows for the first two weeks in November, reported shrimp imports are down by 9 million pounds from 2013.
Of course, the data comes in on a rolling basis, and the total reports for November are by no means complete. But the fact that New York and Miami, which together with Los Angeles account for about 75% of US shrimp imports are showing normal volumes in the first two weeks of November, shows that what is happening in Los Angeles is likely real, and not an artifact of the data reporting.
It appears likely that Los Angeles, which accounted for one-third of US shrimp imports in September will be reporting perhaps 40% to 60% of that number in November.
Since it takes about 30 days or more to ship product across the Pacific, some of the shrimp is in the 18 or more vessels currently anchored outside LA, unable to dock. In fact, one person flying into Los Angles over the weekend compared it to Hong Kong, where dozens of idle ships temporarily anchored outside the harbor are visible in the flight path.
Last week as many as 13 carriers said they would be levying "congestion surcharges" ranging from $800 to $1,000 per 40-foot-equivalent container. The carriers said the surcharges were to address several labor related issues that disrupted normal port operations and would begin as early as November 26. The Federal Maritime Commission said it will review that these surcharges are in compliance with the Commission's rules and regulations, but some carriers have now delayed the surcharges based on the commission's interest.
“Many carriers previously published in their tariffs advance or conditional notice of an intention to implement surcharges in the event certain conditions are experienced,” the FMC said. “All such carrier tariff rules, however, must be clear and definite as to the implementation and termination of the surcharge based upon specific criteria related to ‘labor unrest.’”
NFI and 33 major seafood importers wrote to the Federal Maritime Commission requesting action on these surcharges
“The National Fisheries Institute (“NFI”) and the companies listed below urge you to scrutinize these charges in order to ensure that they comport with the Shipping Act and FMC regulations.
“Our importer companies supply American families with billions of seafood meals every year and are responsible for a substantial portion of the fish Americans eat every day. These companies depend on an efficient and reliable transportation system, especially on the West Coast and especially during a time of year when seafood consumption rises. Ocean carriers at West Coast ports have announced congestion surcharges ostensibly justified by “labor unrest.” In some instances, these surcharges have not been properly and timely notified to shippers; in other cases, the surcharges may not be justified at all.”
“We are concerned that labor negotiations at West Coast ports are a mere pretext for imposition of surcharges that in other circumstances the Shipping Act would prohibit, a conclusion that is buttressed by the fact that numerous carriers reacted to the Commission’s focus on this issue by delaying or even abandoning their surcharges soon after announcing them.”
Seafood traders have said the congestion is the worst they have ever seen. The backup is making it difficult to both export and import their products for their holiday business. One importer said buyers who scheduled shipments to arrive now for the Christmas period are now likely to have that product in time for the Lenten season.
“If these issues at the port persist, we will more than likely be forced to develop new ports of entry for product ultimately destined for the mid-west; if those routes prove to be a better logistical fit (or even just a safer bet) than the West Coast Ports…I would be willing to say the Port of LA might lose that volume all together,” said one shrimp importer based in Los Angeles.
Since the summer, the ILWU and the PMA have been in the midst of negotiations. The previous six-year labor agreement between the two sides expired on June 30 and it was decided the longshoremen would continue to work while an agreement was hashed out.
This story originially appeared on SeafoodNews.com, a subscription site. It has been reprinted with permission.