The Port of LA is experiencing a high surge in empty shipping containers, negatively impacting supply chains and freight operations.
The port of Los Angeles, the most prominent and busiest port in the United States of America, is struggling to maintain its efficacy. As of late 2024, the Port of LA has reported an unprecedented increase in the number of empty containers accumulating at its facilities. This blockage is a combined result of logistical inefficiencies and shifting international trade patterns.
According to the port of Los Angeles, it went through the busiest month of the year in April, which marked a 61% surge of shipping containers from last year, blocking the efficient flow of the supply chain. Regardless of these facts, the port processed 219,158 empty containers in 2023, and these numbers are set to rise by the end of 2024.
This accumulation of empty containers is causing a bottleneck in the supply chain’s effectiveness. Companies such as retail and manufacturing where time is crucial suffer greatly because of high demand and low supply.
What is the Current Situation?
The movement of international and domesticized containers from Asia to South California is the main reason for vast traffic to the port. Johnathan Lee, CEO of Global Freight Solutions, noted, “The imbalance of empty containers is creating significant disruptions. We’re seeing shipment delays, increased storage fees, and higher costs due to inefficient use of port resources. It’s a challenge that impacts the entire supply chain ecosystem.”
The freight expert, Jhon Kingston, the founder of Freight Waves, also stated that increasing instability in the trucking industry is the leading cause of obstruction of empty containers in LA Port.
According to the Port Authority, improvement plans include focusing on coordinated operations and increasing the storage capacity for empty containers. There is also a streak of conversation with international shipping partners to work out ways of improving the return logistics of containers to minimize turnarounds.
Looking Ahead
With the Port of Los Angeles still facing an unusual level of empty containers, industry analysts say that early 2025 will bring some improvement. A $250 million infrastructure upgrade by the Port Authority by the end of late 2025 will yield up to 25% higher operational efficiency and an average cutback of unloading times by 15%.
This infrastructural advancement should make the number of empty containers in the port about 30% less than it is today. Despite these projected gains, there may still be short-term supply chain delays.
According to the Institute for Supply Management, supply chain delays could shrink by 40% over the coming year as port efficiency improves. Recovery in the longer term will depend upon further investments in logistics technology and infrastructure, as well as practical international cooperation to manage container flows to prevent future disruptions.
It is believed that September won’t be as busy as the time before August. Situations will become normal, and the number of empty containers will diminish by a tremendous amount.
Sources:
- Port of Los Angeles: Projected Infrastructure Improvements Report, September 2024
- Business Standard: 2025 Infrastructure upgrade report by 25%.
- ISM – Institute for Supply Management: Shrinkage of delays by 40%.