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New blank sailings to cut NY-NJ March volumes 30 percent

The Port of New York and New Jersey will see an elevated number of blank sailings on routes from China in the coming weeks. Photo credit: Shutterstock.com

After just a smattering of blank sailings from China so far this year, the Port of New York and New Jersey will experience 10 in the next two weeks that will contribute to what the port predicts will be a 30 percent fall in cargo during March.

The figures suggest that the East Coast’s largest port and others on the coast could face some of the disruption and added expense that have afflicted West Coast ports, where larger waves of blank sailings in recent weeks have created container backlogs and increased detention and chassis costs, some of which have fallen on shippers.

China accounts for 32 percent of all imports into New York-New Jersey, by far the most of any single country, authority figures show. But the Port Authority of New York and New Jersey said it expects the impact to be significantly smaller than on the West Coast. 

As a result of the blank sailings, “we expect to see as much as a 30 percent reduction,” in all cargo handled by the port in March, compared to March 2019, Amanda Kwan, port authority spokeswoman, said in an email to JOC.com. “We are watching developments for April very closely as well.”

The Port of Los Angeles this week reported that laden imports declined 22.5 percent in February compared with the same month last year, and the Port of Long Beach reported that laden imports fell 17.5 percent.

New York-New Jersey will experience 20 blank sailings March and April, eight of them due to reduced factory production as the Chinese government implemented measures to deal with the coronavirus disease 2019 (COVID-19), according to Sea-Intelligence, a container shipping analysis company. Twelve of the blank sailings were caused by the Chinese New Year celebrations, which closed factories from Jan. 25 to Feb. 8, according to the Copenhagen-based analyst.

Import growth slows

The port has experienced only three blank sailings since the start of March, according to the analyst. Still, port truckers are reporting slow business, and the port’s chassis yards are packed with unused equipment due to lower-than-expected import volume.

Imports through New York-New Jersey grew just 0.5 percent to 622,731 loaded TEU in January and February, compared to the same two-month period in 2019, according to PIERS, a sister publication to JOC.com within IHS Markit. By comparison, imports through New York-New Jersey grew 6.4 percent year over year in the first two months of 2019. Chassis providers predict the equipment needs for a given market in advance, based on a variety of factors, including past demand, and chassis can accumulate if that demand falls short.

One ocean carrier executive, who asked to remain anonymous, said he expects the carrier to move 25 percent more empty containers out of New York-New Jersey in the last three weeks of March. The carrier has advised the terminals of the elevated number of containers but expects to be able to handle them without finding additional storage space, or bringing in extra vessels to remove them, the executive told JOC.com. The executive added that the carrier expects conditions to return to normal by the second week of April.

An executive at one New York-New Jersey marine terminal, who asked to remain anonymous, said most of the terminal’s blank sailings will occur in March, at which point it will be clear whether or not the accumulation of empty containers has become a problem. “We are waiting to see if the carriers can evacuate enough empties even with those lost ships,” the executive said. 

In Los Angeles and Long Beach, the backlog got so large that it prompted the 2M Alliance to schedule four 19,000- and 23,000-TEU extra-loader vessels beginning last week and continuing into April.

If the scheduled vessels can’t handle the container glut, and empties start piling up and can’t be stored at the terminals or container yards, that can mean added expenses for the shipper or trucker in the form of a chassis on which to store it, and rented yard space, said Tom Adamski, agent for First Coast Logistics.

Chassis buildup

Chassis providers say that although they are carrying unusually high inventory of equipment, it has not yet become a problem.

“Without a doubt demand is down significantly,” and the number of chassis sitting in the providers’ pool in New York-New Jersey is higher than normal, said Val Noel, executive vice president and chief operations officer at TRAC Intermodal. But the port’s decision to move the chassis pools off the marine terminals in recent years prevented the backlog from disrupting cargo flow in the terminals, he said. Noel added that the provider has been able to store all of the additional chassis at the yard, without having to move them to a new location.

Ron Joseph, executive vice president and COO at Direct ChassisLink, Inc. (DCLI), also said the provider is carrying a higher number of chassis than normal in its yard, but has not had difficulty storing them.

Contact Hugh R. Morley at Hugh.Morley@ihsmarkit.com and follow him on Twitter: @HughRMorley1.