Another logistics giant chartered ships to open routes. In order to avoid the congestion in Los Angeles, more containers will be shipped to East Coast ports.

The entire shipping market is still full of challenges. At a time when freight rates are rising and the demand for space and containers is booming, large freight forwarding logistics companies represented by DSV Panalpina, DHL, and Geodis have embarked on the path of chartering ships and opening routes. Shippers Home Depot and Amazon also The chartered ship has become a new trend in the shipping market.

Recently, another logistics giant said that it will start chartering container ships in July and plans to rent one or two ships a month to provide space for its existing customers and avoid the congestion in Los Angeles.

It is reported that North American freight giant Seko Logistics is expanding its logistics footprint by chartering ships. The logistics provider started chartering container ships in July.

"We plan to rent one or two ships per month, and these ships carry more than 1,000 TEUs," explained Brian Bourke, the company's chief growth officer. "We provide this service to ensure that our customers have the ability to import their products to avoid any additional backlog."

From the remainder of 2021 to early 2022, additional Asian flight schedules will be added, 90% of which will be given to existing customers.

Bourke said the decision to start chartering was not made lightly. "This is not what we usually do. We cooperate well with ocean carriers, but there are many unique situations in this market. We decided to test this market with a ship. As a result, these spaces were robbed within a few hours. NS."

Seko Logistics tries to rent 1-2 ships per month for customers

"Today's consolidation situation will not improve until after the Lunar New Year," Bourke said. "The inventory-to-sales ratio is still declining. This demand will continue until you see the situation improve."

The destinations for chartering ships are smaller ports on the West Coast, such as Portland, Oregon and San Diego.

"We want to avoid the Port of Los Angeles as much as possible," Bourke said. "One of the benefits of smaller ships is that we can avoid deep water ports and congestion. Smaller ports are good, and we can get into ports faster."

"We can also quickly tranship our customers' goods onto trucks to Detroit, Chicago and all inland points. We are avoiding chaotic railroad tracks." Bourke said that SEKO's transhipment business has grown by 1,000%.

▍The number of ships berthed in San Pedro Bay waiting to enter the ports of Los Angeles and Long Beach began to climb again

Data from the local maritime exchange in mid-July showed that there were more than 20 ships at anchor waiting for berths, reflecting an increase in imports from China, with only 10 container ships waiting in the Gulf during June.

A report in mid-July showed that the average time for container ships to berth was 6 days, while in mid-June it was usually 4 or 5 days (sometimes as low as 3 days).

The results announced not long ago showed that the Port of Los Angeles handled 82 container ships in June, with a throughput of 876,430 teu. This was the busiest June in the port’s long history, an increase of nearly 27% compared to June 2020. It also predicts that the annual throughput will reach 10.9 million teu, which means an increase of 17% from the 9.2 million teu in 2020 and a 14% increase from the port’s record of 9.5 million teu in 2018.

As supply chain disruption continues, shipping, which is usually not a concern, has become a mainstream issue. The Washington Post quoted Federal Maritime Commission member Carl Bentzel as saying: "I am now very worried about the impact of the current situation on the economy. This may be the first time the public has seen the effects of shipping interruptions since World War II."

At the same time, freight interest lobbyists in Washington, DC are urging the US Congress to investigate the actions of shipping companies, including speeding up the return of empty containers to Asia instead of providing them to US exporters. Instead, shipping companies pointed out that the record throughput was due to delays on land, rather than anti-competitive practices.

The latest issue of The McCown Report provides a detailed annual analysis of container throughput. McCown has 40 years of management experience in the container industry. He pointed out that most of the growth will occur in the U.S. Gulf of Mexico/ A port on the east coast of the United States.

He commented: “Shippers choose to ship containers to east coast ports in an attempt to avoid the most obvious congestion problem at west coast ports.”

This trend of moving from the West Coast to the Gulf/East Coast began with the widening of the Panama Canal in 2016. McCown pointed out that after departing from Asia, boxes unloaded at West Coast ports go directly to eastern destinations by rail, faster than all waterways to the East Coast.

"Recent congestion issues may cause shippers to reconsider their routes, as the East Coast/Gulf Coast is less affected, and some ports have more room for growth."

He also cited the shipper’s inspection of “the carbon emissions of its related freight activities”, saying that this could also lead to further diversion to all waterways into the Gulf of Mexico and the East Coast.