September 23, 2021

Storm Updates

Tropical Storm Nicholas – Update 13

Updated 9/22/2021 at 2:00 p.m. CDT – Updates in bold

Nicholas made landfall southwest of Sargent, TX as a Category 1 Hurricane with maximum sustained winds of 75 mph at approximately 12:30 a.m. CDT on Sep 14. The storm was shortly downgraded back to a tropical storm.

According to poweroutage.us, power was mostly restored in the impacted Texas coastal area as of Tuesday, Sep 21.

CHEMICAL & REFINING OPERATIONS

• LyondellBasell’s Matagorda Complex in Bay City, TX had resumed operations as of Sep 22, the facility had previously safely shut down due to widespread power outages in the area (per company spokesperson)

Hurricane Ida – Update 36

Updated 9/22/2021 at 2:00 p.m. CDT – Updates in bold

Hurricane Ida made landfall near Port Fourchon, LA around 11:55 a.m. CDT on Sunday, Aug 29 as an “extremely dangerous” Category 4 storm with maximum sustained winds of 150 mph, which is very close to a Category 5 hurricane, and a minimum central pressure of 930 mb, according to the National Weather Service (NWS) National Hurricane Center (NHC).

The storm maintained major category strength as it made its way over most of the petrochemical industry in southeastern Louisiana. At approximately 9 p.m. CDT on Sunday, Aug 29, an estimated nine hours after making landfall, Hurricane Ida weakened to a Category 2 hurricane with its eye just north of Garyville, LA, according to NWS. By 11 p.m. CDT, Hurricane Ida had decreased to a Category 1 hurricane near Maurepas, LA.

Louisiana produces nearly 25 billion pounds of ethylene each year (29% of US capacity). Based on the path of Hurricane Ida, it is estimated that 61.5% Louisiana’s ethylene capacity was offline immediately after the storm’s landfall, representing approximately 18% of total US capacity. For a list of current ethylene capacity that is offline by facility, please see page 7 of the OPIS PCW Daily Wire report.

Downstream, the storm affected roughly 14% of North American PE capacity, 11% of North American PP capacity and 25% of North American PS capacity. Approximately 40% of US PVC production was down. Hurricane Ida impacted 44% of the US styrene capacity (37% of North American capacity).

According to poweroutage.us, an estimated 25,790 customers were without power in southeastern Louisiana as of Wednesday, Sep 22 at approximately 1:45 p.m. CDT; this compares to an estimated 20,008 outages on Sep 21. Please see the “Facility Location by Parish” section below for power outage details by parish according to data published by poweroutage.us.

FACILITY LOCATION BY PARISH

Ascension Parish – estimated 0.4% tracked customers without power

• BASF at Geismar
• Lion Copolymer at Geismar
• Lonestar at Geismar
• NOVA at Geismar
• Occidental at Geismar
• Shell at Geismar
• Westlake at Geismar

East Baton Rouge Parish – estimated 0% tracked customers without power

• Deltech at Baton Rouge
• ExxonMobil at Baton Rouge
• Formosa at Baton Rouge

Iberville Parish – estimated 0.2% tracked customers without power

• Dow at Plaquemine
• Shintech at Plaquemine
• Total at Carville
• Westlake at Plaquemine

Jefferson Parish – estimated 1.7% tracked customers without power

• Cornerstone at Fortier

Plaquemines Parish – estimated 0.5% tracked customers without power

• Phillips 66 at Belle Chasse

St Bernard Parish – estimated 0% tracked customers without power

• Chalmette Refining (PBF) at Chalmette
• Murphy Oil (Valero) at Meraux

St Charles Parish – estimated 3.8% tracked customers without power

• Dow at St Charles
• Motiva at Norco
• Shell at Norco
• Valero at St Charles

St James Parish – estimated 0.2% tracked customers without power

• Occidental at Convent
• Americas Styrenics at St James

St John the Baptist Parish – estimated 22.3% tracked customers without power

• Marathon at Garyville
• Pinnacle Polymers at Garyville

West Baton Rouge Parish – estimated 0% tracked customers without power

• ExxonMobil at Port Allen
• Placid Refining at Port Allen
• Shintech at Addis

CHEMICAL & REFINING OPERATIONS

Facilities that have begun the restart process:

• Americas Styrenics began restart processes at its facility in St James, LA on Sep 12; the facility previously closed in preparation for the storm (per company spokesperson)
• Chalmette Refining (PBF Energy) at Chalmette, LA was confirmed to have restarted and is understood to be running at normal rates; the facility originally lost power on Aug 29 (per company spokesperson)
• Dow Chemical has begun bringing operations back online at Plaquemine, LA as of Sep 8 as third-party utility balances and raw materials availability allow; the facility was originally shut on Aug 29 (per company website)
• ExxonMobil stated on Sep 2 that it is in the process of restarting its refinery at Baton Rouge; the last update provided about the Baton Rouge chemical facilities was on Aug 31: “The Baton Rouge refinery, chemical plant and other ExxonMobil Baton Rouge facilities are safely progressing restart procedures. Our facilities did not sustain any significant damage during the hurricane.” The refinery had shut on Aug 30 (per company website)
• NOVA Chemicals said on Sep 17 that its “Geismar site has restarted and is operational”; the company began a safe and controlled shutdown of its facility in preparation for the storm on Aug 27 (per company spokesperson)
• OxyChem’s plants at Geismar, LA have returned to normal operations, and the plants at Convent, LA were in the process of coming online as of Sep 17; the plants at Taft, LA are expected to restart the week of Sep 20 (per company spokesperson)
• Pinnacle Polymers restarted the first line of its Garyville, LA plant and was producing prime resin as of the evening of Sep 15; the second line restarted and was expected to be producing prime resin on Sep 16 (per company source); the company declared force majeure on Aug 30 for all PP products due to the impacts of Hurricane Ida (per customer letter)
• Placid Refining at Port Allen, LA has power supply restored and after borrowing 300,000 bbl of crude from the Strategic Petroleum Reserve has been able to begin restarting processing units during the week of Sep 7 (OPIS News)
• Shell announced its Geismar, LA facility had restarted as of Sep 14 at 7 p.m. CDT, noting that the site was operating at reduced rates as it continued to experience utility and feedstocks constraints but has resumed loading and shipping product, subject to product availability (per company website)
• Valero refinery restarts were underway as of Sep 14 at the Meraux (Murphy Oil) and St Charles, LA sites near New Orleans, including Diamond Green Diesel; the facilities shut down prior to the storm making landfall (per company website)
• Westlake Chemical’s plants at Geismar and Plaquemine, LA were running at low rates and were waiting on an increase in nitrogen feed to ramp up further; the two facilities shut prior to Ida’s landfall; on Aug 31, the company reported limited damage and that restart was dependent primarily on availability of utilities, feedstocks and industrial gases (per company spokesperson); the company declared a system-wide force majeure on Aug 31 on PVC and VMC out of these two facilities (per customer letter)

Petrochemical assets that are confirmed to have shut include:

• BASF shut down its facility in Geismar, LA in anticipation of the Hurricane Ida (per company spokesperson)
• Cornerstone at Fortier, LA, which produces acrylonitrile, shut down on Aug 28 in preparation for Hurricane Ida; the facility lost power on Aug 29 and was running on auxiliary power to maintain key safety and environmental equipment as of Aug 31; the company completed an assessment on Aug 30 and found “no significant damage to Cornerstone assets. There are wind driven impacts to secondary building roofing systems, cooling tower exteriors, and insulation. First repairs commenced on August 31, 2021. At this time we do not believe damages incurred within the Cornerstone Energy Park fence line will impact a restart schedule.” (per company report on Aug 31)
• Dow declared force majeure on HDPE and LLDPE from its Taft (St Charles), LA plant on Sep 8, citing the unplanned shutdown and disruptions in operations, logistics and raw material supply due to Hurricane Ida, the company said that the St Charles site was “making progress toward restart of operations” and it expects to have a clearer timeline for restart sequencing later that week, based on repairs and as third-party utility balances and raw materials availability allow; the facility was originally shut on Aug 29 (per customer letter/company website)
• Galata Chemicals, which produces additives used by the PVC industry, on Aug 30 declared force majeure on supply of products manufactured at its facility in Taft, LA due to lack of electricity, availability of equipment for inbound and outbound shipments as well as other factors (per customer letter)
• Lion Elastomers announced on Sep 1 that its EPDM facility at Geismar, LA sustained no significant damage from Hurricane Ida, the site was waiting to confirm “a stable return of electrical power and utilities, personnel, and the required feedstocks” to being the process of returning to normal production and business operations; the company had previously idled production at this facility on Aug 30 in preparation for the storm (per company website)
• Marathon Petroleum’s refinery at Garyville, LA safely shut down prior to Hurricane Ida’s landfall; on Aug 31, minor damage was confirmed, generators were being used to “power aspects of our operations that enable us to progress with repairs and assessments” (per company spokesperson)
• Phillips 66 shut operations on Aug 27 at the Alliance Refinery in Belle Chasse, LA; on Aug 30, the company confirmed that there was water in the refinery and the facility remained shut; on Sep 1, the company confirmed it “discovered a sheen of unknown origin in some flooded areas of Alliance Refinery. At this time, the sheen appears to be secured and contained within refinery grounds… A full post-storm assessment remains underway at the refinery…The refinery remains shut down. Timelines for operational restarts are largely dependent on assessment impacts and access to electricity and other utilities.” (per company website)
• Shell issued an update about Norco, LA on Sep 12: “The Shell Norco Manufacturing facility continues to assess impacts from Hurricane Ida. The site continues to flare residual light hydrocarbon material with visible smoking. We are continuing to complete repairs and we are making improvements to minimize visible flaring until power is fully restored…” (per company website)
• TotalEnergies (Cosmar) at Carville, LA said on Sep 7 that partial power was restored at its PS plant in Carville, LA and that a restart plan was being developed based on power and outside service availability; the unit shut down prior to Hurricane Ida’s landfall (per company spokesperson)

Additional petrochemical assets in Louisiana that were in the path of Hurricane Ida and are understood to have shut include:

• Deltech at Baton Rouge
• Lonestar at Geismar
• Motiva at Norco

Storm Coverage

www.petrochemwire.com/storm-coverage/

September 23, 2021

Storm Updates

Tropical Storm Nicholas – Update 13

Updated 9/22/2021 at 2:00 p.m. CDT – Updates in bold

Nicholas made landfall southwest of Sargent, TX as a Category 1 Hurricane with maximum sustained winds of 75 mph at approximately 12:30 a.m. CDT on Sep 14. The storm was shortly downgraded back to a tropical storm.

According to poweroutage.us, power was mostly restored in the impacted Texas coastal area as of Tuesday, Sep 21.

CHEMICAL & REFINING OPERATIONS

• LyondellBasell’s Matagorda Complex in Bay City, TX had resumed operations as of Sep 22, the facility had previously safely shut down due to widespread power outages in the area (per company spokesperson)

Hurricane Ida – Update 36

Updated 9/22/2021 at 2:00 p.m. CDT – Updates in bold

Hurricane Ida made landfall near Port Fourchon, LA around 11:55 a.m. CDT on Sunday, Aug 29 as an “extremely dangerous” Category 4 storm with maximum sustained winds of 150 mph, which is very close to a Category 5 hurricane, and a minimum central pressure of 930 mb, according to the National Weather Service (NWS) National Hurricane Center (NHC).

The storm maintained major category strength as it made its way over most of the petrochemical industry in southeastern Louisiana. At approximately 9 p.m. CDT on Sunday, Aug 29, an estimated nine hours after making landfall, Hurricane Ida weakened to a Category 2 hurricane with its eye just north of Garyville, LA, according to NWS. By 11 p.m. CDT, Hurricane Ida had decreased to a Category 1 hurricane near Maurepas, LA.

Louisiana produces nearly 25 billion pounds of ethylene each year (29% of US capacity). Based on the path of Hurricane Ida, it is estimated that 61.5% Louisiana’s ethylene capacity was offline immediately after the storm’s landfall, representing approximately 18% of total US capacity. For a list of current ethylene capacity that is offline by facility, please see page 7 of the OPIS PCW Daily Wire report.

Downstream, the storm affected roughly 14% of North American PE capacity, 11% of North American PP capacity and 25% of North American PS capacity. Approximately 40% of US PVC production was down. Hurricane Ida impacted 44% of the US styrene capacity (37% of North American capacity).

According to poweroutage.us, an estimated 25,790 customers were without power in southeastern Louisiana as of Wednesday, Sep 22 at approximately 1:45 p.m. CDT; this compares to an estimated 20,008 outages on Sep 21. Please see the “Facility Location by Parish” section below for power outage details by parish according to data published by poweroutage.us.

FACILITY LOCATION BY PARISH

Ascension Parish – estimated 0.4% tracked customers without power

• BASF at Geismar
• Lion Copolymer at Geismar
• Lonestar at Geismar
• NOVA at Geismar
• Occidental at Geismar
• Shell at Geismar
• Westlake at Geismar

East Baton Rouge Parish – estimated 0% tracked customers without power

• Deltech at Baton Rouge
• ExxonMobil at Baton Rouge
• Formosa at Baton Rouge

Iberville Parish – estimated 0.2% tracked customers without power

• Dow at Plaquemine
• Shintech at Plaquemine
• Total at Carville
• Westlake at Plaquemine

Jefferson Parish – estimated 1.7% tracked customers without power

• Cornerstone at Fortier

Plaquemines Parish – estimated 0.5% tracked customers without power

• Phillips 66 at Belle Chasse

St Bernard Parish – estimated 0% tracked customers without power

• Chalmette Refining (PBF) at Chalmette
• Murphy Oil (Valero) at Meraux

St Charles Parish – estimated 3.8% tracked customers without power

• Dow at St Charles
• Motiva at Norco
• Shell at Norco
• Valero at St Charles

St James Parish – estimated 0.2% tracked customers without power

• Occidental at Convent
• Americas Styrenics at St James

St John the Baptist Parish – estimated 22.3% tracked customers without power

• Marathon at Garyville
• Pinnacle Polymers at Garyville

West Baton Rouge Parish – estimated 0% tracked customers without power

• ExxonMobil at Port Allen
• Placid Refining at Port Allen
• Shintech at Addis

CHEMICAL & REFINING OPERATIONS

Facilities that have begun the restart process:

• Americas Styrenics began restart processes at its facility in St James, LA on Sep 12; the facility previously closed in preparation for the storm (per company spokesperson)
• Chalmette Refining (PBF Energy) at Chalmette, LA was confirmed to have restarted and is understood to be running at normal rates; the facility originally lost power on Aug 29 (per company spokesperson)
• Dow Chemical has begun bringing operations back online at Plaquemine, LA as of Sep 8 as third-party utility balances and raw materials availability allow; the facility was originally shut on Aug 29 (per company website)
• ExxonMobil stated on Sep 2 that it is in the process of restarting its refinery at Baton Rouge; the last update provided about the Baton Rouge chemical facilities was on Aug 31: “The Baton Rouge refinery, chemical plant and other ExxonMobil Baton Rouge facilities are safely progressing restart procedures. Our facilities did not sustain any significant damage during the hurricane.” The refinery had shut on Aug 30 (per company website)
• NOVA Chemicals said on Sep 17 that its “Geismar site has restarted and is operational”; the company began a safe and controlled shutdown of its facility in preparation for the storm on Aug 27 (per company spokesperson)
• OxyChem’s plants at Geismar, LA have returned to normal operations, and the plants at Convent, LA were in the process of coming online as of Sep 17; the plants at Taft, LA are expected to restart the week of Sep 20 (per company spokesperson)
• Pinnacle Polymers restarted the first line of its Garyville, LA plant and was producing prime resin as of the evening of Sep 15; the second line restarted and was expected to be producing prime resin on Sep 16 (per company source); the company declared force majeure on Aug 30 for all PP products due to the impacts of Hurricane Ida (per customer letter)
• Placid Refining at Port Allen, LA has power supply restored and after borrowing 300,000 bbl of crude from the Strategic Petroleum Reserve has been able to begin restarting processing units during the week of Sep 7 (OPIS News)
• Shell announced its Geismar, LA facility had restarted as of Sep 14 at 7 p.m. CDT, noting that the site was operating at reduced rates as it continued to experience utility and feedstocks constraints but has resumed loading and shipping product, subject to product availability (per company website)
• Valero refinery restarts were underway as of Sep 14 at the Meraux (Murphy Oil) and St Charles, LA sites near New Orleans, including Diamond Green Diesel; the facilities shut down prior to the storm making landfall (per company website)
• Westlake Chemical’s plants at Geismar and Plaquemine, LA were running at low rates and were waiting on an increase in nitrogen feed to ramp up further; the two facilities shut prior to Ida’s landfall; on Aug 31, the company reported limited damage and that restart was dependent primarily on availability of utilities, feedstocks and industrial gases (per company spokesperson); the company declared a system-wide force majeure on Aug 31 on PVC and VMC out of these two facilities (per customer letter)

Petrochemical assets that are confirmed to have shut include:

• BASF shut down its facility in Geismar, LA in anticipation of the Hurricane Ida (per company spokesperson)
• Cornerstone at Fortier, LA, which produces acrylonitrile, shut down on Aug 28 in preparation for Hurricane Ida; the facility lost power on Aug 29 and was running on auxiliary power to maintain key safety and environmental equipment as of Aug 31; the company completed an assessment on Aug 30 and found “no significant damage to Cornerstone assets. There are wind driven impacts to secondary building roofing systems, cooling tower exteriors, and insulation. First repairs commenced on August 31, 2021. At this time we do not believe damages incurred within the Cornerstone Energy Park fence line will impact a restart schedule.” (per company report on Aug 31)
• Dow declared force majeure on HDPE and LLDPE from its Taft (St Charles), LA plant on Sep 8, citing the unplanned shutdown and disruptions in operations, logistics and raw material supply due to Hurricane Ida, the company said that the St Charles site was “making progress toward restart of operations” and it expects to have a clearer timeline for restart sequencing later that week, based on repairs and as third-party utility balances and raw materials availability allow; the facility was originally shut on Aug 29 (per customer letter/company website)
• Galata Chemicals, which produces additives used by the PVC industry, on Aug 30 declared force majeure on supply of products manufactured at its facility in Taft, LA due to lack of electricity, availability of equipment for inbound and outbound shipments as well as other factors (per customer letter)
• Lion Elastomers announced on Sep 1 that its EPDM facility at Geismar, LA sustained no significant damage from Hurricane Ida, the site was waiting to confirm “a stable return of electrical power and utilities, personnel, and the required feedstocks” to being the process of returning to normal production and business operations; the company had previously idled production at this facility on Aug 30 in preparation for the storm (per company website)
• Marathon Petroleum’s refinery at Garyville, LA safely shut down prior to Hurricane Ida’s landfall; on Aug 31, minor damage was confirmed, generators were being used to “power aspects of our operations that enable us to progress with repairs and assessments” (per company spokesperson)
• Phillips 66 shut operations on Aug 27 at the Alliance Refinery in Belle Chasse, LA; on Aug 30, the company confirmed that there was water in the refinery and the facility remained shut; on Sep 1, the company confirmed it “discovered a sheen of unknown origin in some flooded areas of Alliance Refinery. At this time, the sheen appears to be secured and contained within refinery grounds… A full post-storm assessment remains underway at the refinery…The refinery remains shut down. Timelines for operational restarts are largely dependent on assessment impacts and access to electricity and other utilities.” (per company website)
• Shell issued an update about Norco, LA on Sep 12: “The Shell Norco Manufacturing facility continues to assess impacts from Hurricane Ida. The site continues to flare residual light hydrocarbon material with visible smoking. We are continuing to complete repairs and we are making improvements to minimize visible flaring until power is fully restored…” (per company website)
• TotalEnergies (Cosmar) at Carville, LA said on Sep 7 that partial power was restored at its PS plant in Carville, LA and that a restart plan was being developed based on power and outside service availability; the unit shut down prior to Hurricane Ida’s landfall (per company spokesperson)

Additional petrochemical assets in Louisiana that were in the path of Hurricane Ida and are understood to have shut include:

• Deltech at Baton Rouge
• Lonestar at Geismar
• Motiva at Norco

Storm Coverage

www.petrochemwire.com/storm-coverage/

September 22, 2021

Housing Starts

https://tradingeconomics.com/united-states/housing-starts

September 22, 2021

Housing Starts

https://tradingeconomics.com/united-states/housing-starts

September 22, 2021

Another Record

Record Shattered (Again): 73 Container Ships Stuck Waiting Off California

by Tyler DurdenWednesday, Sep 22, 2021 – 02:38 PM

By Greg Miller of FreightWaves,

The number of container ships at anchor or drifting in San Pedro Bay off the ports of Los Angeles and Long Beach has blown through all previous records.

The latest peak: There were an all-time-high 73 container ships in the queue in San Pedro Bay on Sunday, according to the Marine Exchange of Southern California (the tally inched back to 69 on Tuesday). Of the ships offshore Sunday, 36 were forced to drift because anchorages were full.

Theoretically, the numbers — already surreally high — could go even higher than this. While designated anchorages are limited, the space for ships to safely drift offshore is not.

“There’s lots of ocean for drifting — there’s no limit,” Capt. Kip Loutit, executive director of the Marine Exchange of Southern California, told American Shipper.

“Our usual VTS [Vessel Traffic Service] area is a 25-mile radius from Point Fermin by the entrance to Los Angeles, which gives a 50-mile diameter to drift ships. We could easily expand to a 40-mile radius, because we track them within that radius for air-quality reasons. That would give us an 80-mile diameter to drift ships,” said Loutit.

Limits on land

The Southern California gateway is acting like the narrow tube on a funnel: Ocean volumes pour in from Asia and can only flow out at a certain velocity due to terminal limitations as well as limitations of warehouses, trucking and rail beyond the terminal. When the flow into the top of the funnel is too great, as it is now, it creates an overflow in the form of ships at anchor or adrift. This offshore ship queue is equivalent to a massive floating warehouse for containerized imports whose size is only limited by liner shipping capacity and U.S. consumer demand.

How constrained is the flow? Port of Los Angeles Executive Director Gene Seroka said during a press conference on Wednesday that container dwell time in the terminal “has reached its peak since the surge began” and is now six days, worsening from 5.3 days last month. On-dock rail dwell time is 11.7 days, not far below the peak of 13.4. Street dwell time (outside the terminal) “is 8.5 days, nearing the all-time high” of 8.8 days, said Seroka. It has worsened from 8.3 days a month ago.

Marine Exchange data reveals the constraints of the Los Angeles/Long Beach port complex. Since congestion began, the total number of container ships either at anchor or at berth has risen and fallen — it was an all-time-high 100 on Sunday, more than five times pre-COVID levels. But one stat has remained remarkably consistent: The number of container ships at Los Angeles/Long Beach berths has remained in a tight band of around 27-31 per day — that is what the land side can handle, the tube of the metaphorical funnel. Throughout 2021, all ship arrivals over that threshold have overflowed into the anchorages and drift areas.Chart: American Shipper based on data from Marine Exchange of Southern California. Data bi-monthly Jan 2019-Nov 2020; daily Dec 2020-present

More ships deployed in trans-Pacific

Meanwhile, at the wider open end at the top of the funnel — the drift area radius outside the port — a much higher number of ships is flooding into Southern California than ever before. Seroka noted that of the 84 ships his port handled in August, 11 were “extra loaders” — ships that are not part of a scheduled service. “And in addition to the extra loaders we’ve seen from incumbent carriers, there are no less than 10 newcomers [new services] to the trade,” he added. According to Alphaliner, deployed trans-Pacific capacity is up 30% year on year.

Asked by American Shipper whether ports or terminals could proactively stem inbound flows to provide more breathing room, Seroka replied: “Slowing down these ships is something we thought about in the early days of the surge, to try to give us a little bit more time in between to get ready for the next ships. But if you start looking at slowing down these ships, it’s going to back up the vessel supply chain even further and make schedules an even deeper concern for liner companies.” In other words, no.

Imports down year on year

The higher the number of ships waiting offshore, the bigger the queue and the longer it takes for a vessel to get a berth. On Tuesday, the average wait time to reach a berth in Los Angeles (30-day rolling average) rose to an all-time high of nine days.

That, in turn, delays imports. Back in August 2020, when import demand surged post-lockdowns, there were almost no ships at anchor off Southern California. This August, there was an average of 36 ships at anchor per day, according to Marine Exchange data. The port of Los Angeles handled 485,672 twenty-foot equivalent units of imports in August — down 5.9% year on year.Chart: American Shipper based on data from Port of Los Angeles

As Seroka pointed out, on the last day of August, 26 ships were at anchor waiting for berths in Los Angeles. These ships had 205,000 TEUs of cargo on board, which was pushed into this month (just as delayed cargo from this month will be pushed into October).

Total throughput for the port was 954,377 TEUs in August, down 0.8% year on year due to the decline in imports and a 23% plunge in loaded exports, offset by a 17% surge in outbound empty containers.

The port expects volumes to pull back from August’s level over the next two months, to 930,000 TEUs in September and 950,000 TEUs in October. It expects full-year throughput of 10.8 million TEUs.

More blank sailings ahead

What could stem the tide of cargo arriving in Southern California and cap the size of the floating warehouse?

When congestion peaked earlier this year, in the first quarter, it led to a large number of “blanked” (canceled) sailings in the second quarter. Ships stuck at anchor in San Pedro Bay could not get back to Asia in time, forcing carriers to cancel voyages. Those cancellations helped pare California anchorage totals in May and early June.

Carriers are yet again blanking sailings as a result of escalating congestion in Southern California. But this time, the number of ships at anchor and drifting has much more room to run before the network reaches its limit.

Not only are there more services and extra loaders, but carriers also have an incentive to blank sailings in other markets instead and redeploy ships into the trans-Pacific, where they can earn more money by topping off rates with premium charges.

According to Lars Jensen, CEO of consultancy Vespucci Maritime, “If we continue to see extremely strong demand specifically on the trans-Pacific, carriers may elect to blank a few Asia-Europe sailings and instead temporarily let a few of those vessels make a trip across the Pacific before coming back to Asia and re-phasing into the Asia-Europe network.”

According to Alphaliner, ships are already being pulled from the Asia-Middle East and Asia-Red Sea lanes to make more money elsewhere. Alphaliner reported that up to 50% of Asia-Middle East services are now being blanked because vessels have been redeployed to trades like the trans-Pacific “where spot freight rates are at historic highs.”

https://www.zerohedge.com/markets/record-shattered-again-73-container-ships-stuck-waiting-california