“Sleight of Hand” at Southern California Ports

Dozens of container ships offshore from the ports of Los Angeles and Long Beach are the most visible symbols of the nation’s besieged supply chains.

So… how did they vanish overnight?

Dozens of container ships offshore from the ports of Los Angeles and Long Beach are the most visible symbols of the nation’s besieged supply chains. The fleet of massive ships represents the magnitude of the supply chain crisis and the systemic failure of the port infrastructure to meet surging consumer demand.  

The images attract attention

In mid-October, President Biden announced a deal with the Port of Los Angeles to begin operating 24 hours a day, seven days a week. The goal was to process thousands of extra containers each weeknight. Biden tweeted, “My administration is working around the clock to move more goods faster and strengthen the resiliency of our supply chains.”    

A week later, LA port officials announced fines on carriers of $100 a day per container left on the docks. The Biden administration also revealed an agreement to waive fees for truck drivers picking up containers at night or during the weekend.  

These measures however did not resolve matters. Part of the problem is a shortage of equipment to unload ships and move containers. There could be as many as half-a-million containers on cargo ships. Additional warehouse workers and truck drivers are needed to process containers and pick up loads.  

Frustrated by Biden’s efforts, Francisco Medina, a local truck driver, observed, “Even if you’re there 24 hours, it’s gonna be even worse. Why? Because it’s gonna be more people coming in the terminal who are just gonna sit there. It’s just ridiculous.”    

Progress?

By late November, the White House claimed significant progress. For example, the administration showed that the number of containers dwelling 9 days or more at the ports was down 41% - which represents an improvement of thousands of TEUs. This frees up valuable space so ships can unload faster.  

Yet while the White House celebrated, over 40 ships were anchored waiting to enter the port of Los Angeles. That’s considerably more ships than when Biden announced the port deal nearly a month before. The larger number undermined the administration’s credibility.   

Moreover, environmental interests sounded the alarm. Waiting weeks to enter the ports, ships idled their engines emitting pollutants such as nitrogen dioxide, sulfur dioxide, and fine particulate matter. Plumes of smoke were visible from miles away. Ships were adding dangerous emissions to historically poor air around the ports.           

Finally, local, and national news media eagerly exploited the images of idling ships. The photos provided context for unfavorable storylines and became visual metaphors for port officials’ incompetence, deep flaws in the nation’s supply chains, growing inflation, and lingering uncertainty about the economy. 

The widely acclaimed 60 minutes television program even visited the ports, reminding Americans that their holiday orders may be stuck on giant container ships, waiting for space to unload at the ports. Flying a helicopter over stacks of containers and scores of ships, 60 Minutes called it an “epic traffic jam” that no one seems to be able to untangle.      

Pressure builds and a new queueing policy emerges

Developed by the Pacific Maritime Association, the Pacific Merchant Shipping Association, and the Marine Exchange of Southern California, and approved by both Los Angeles and Long Beach ports, a new queueing policy offered pragmatic solutions. The policy encouraged incoming ships to wait out in open water rather than near shore. Starting in the third week of November, eastbound ships were asked to wait for about 150 miles or more offshore, and boats traveling north or south were asked to sit at least 50 miles out. 

The policy therefore dramatically reduced the number of ships at anchor. For example, on December 8, there were only 5 ships at anchor. Compare this to the 40 at anchor on the week the queueing policy began.       

With fewer ships at anchor – visible from shore, the port’s efforts appeared successful. Also, with ships far out in the open water, concerns about air quality faded.  

Sleight of hand

The smaller number of ships at anchor just offshore cannot be disputed. However, the new policy did not decrease the total number of vessels waiting to unload containers. Rather, ships are now just farther offshore and not classified as physically at anchor. The policy closed the typical anchorages and loitering areas and forced ships to drift much further out at sea.   

So, the revised method lengthens the waiting line. There are still as many ships, or more ships, waiting. They are just placed in a much longer queue – out of sight, out of mind. The long lines of container ships waiting to dock seems to have vanished overnight.  

Port of Los Angeles Director Gene Seroka pointed to the notable drop in at anchor ships as a real sign of progress. The LA Times reported that Seroka attributed that progress to the port’s container penalty policies:  “Since we instituted a penalty for long-aging containers, the number of ships at anchor has decreased by more than 40% over four weeks.”     

When pressed, Seroka insisted the new queuing policy was not a cosmetic change but a genuine step toward greater efficiency. He suggested the ports now have a better idea of what’s coming their way and unwanted emissions near the coast is vastly reduced, as are the dangers of ships colliding in the Bay.  

Michael Benjamin, chief of the California Air Resource board’s air quality planning and science division noted the change “should be positive from an air-quality perspective because it significantly dilutes pollution before it reaches the coast and populated areas.”   

Similarly,  Mercury News reported that deputy policy director for the Coalition for Clean Air, Christopher Chavez, noted that the “new policy is going to be an important step to improve fuel efficiency, reduce pollution and actually to protect whales.”  

Average Days at Anchor and Berth 

Meanwhile, the wait time for vessels continues to climb. Once ships reach anchor and are assigned berths, they now wait an average of 21 days to enter the Port of LA. That is a record and doubles the average wait times from the spring and early summer months. 

Thus, while the queuing policy significantly reduced the number of ships at anchor, the wait to unload has increased. This strongly implies that the port crisis will continue for some time.  

Bottom Line 

The new queueing policy encourages port authorities to claim increased efficiencies by conflating the reduced number of ships near shore – at anchor – with the total backlog of vessels, most of which are drifting miles out at sea.  It merely replaces the prior system of classification with one more favorable to the port’s and the Biden administration’s short-term interests.  

The policy quickly eliminated the most powerful and damaging symbol of the port crisis. With far fewer ships waiting near shore, the port appears efficient and the intense media scrutiny of port operations and port officials decreases. In addition, fewer ships at anchor align well with the Biden administration’s claims of progress.       

Finally, fewer ships congregating in the harbor means less pollution inland. The new policy pleased environmental interests as well.   

In terms of public relations, the policy is brilliant.  

Nevertheless, the policy fails to address the harsh reality of persistent bottlenecks and unprecedented congestion. For consumers, manufacturers, and retailers, supply shortages, delayed deliveries, surging inflation, and threats to holiday gifts are all potent reminders that the ports are overwhelmed. The present supply-chain challenges are a reality that sleight of hand policies cannot forestall.   

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