Following the Money: Who Pays to Move a Box

In 2019 the spot price of moving a forty-foot container from China to the US West Coast was typically about $1,500–2,000. In September 2021 the same box, on the Freightos Baltic Index (FBX) China–US West Coast lane, cost more than $20,000 at the peak (reported), and premium charges for guaranteed space were often added on top. The Drewry World Container Index composite passed about $10,000 per FEU the same month. Nothing about the ships, the ports or the boxes had changed. American consumers, stuck at home and supported by stimulus payments, had switched their spending from services to goods from mid-2020, and imports surged just as ports, warehouses, railways and trucking firms ran short of workers and space. The Port of Los Angeles handled about 10.7 million TEU in 2021, a record at the time (reported).

The system jammed from the land side inwards. Warehouses inland were full, so import containers waited in terminal yards; the chassis they sat on were stuck under them at warehouses; empty containers could not be returned; and truckers could not get appointments to collect boxes from terminals whose yards had passed the point, roughly 80–85% full in practitioners' rule of thumb, at which a terminal loses productivity. Offshore, ships waited at anchor and then, under a queuing system introduced in November 2021, further out to sea. The count of ships waiting off Los Angeles and Long Beach peaked at about 109 on 9 January 2022 (Marine Exchange of Southern California, reported), and waits stretched to weeks.

Everyone with authority tried something. The White House announced round-the-clock operations at the two ports in October 2021. The ports announced a "container excess dwell fee" on boxes that sat too long, postponed it repeatedly and dropped it in January 2023 without ever charging it (reported). On 22 October 2021, after Flexport's chief executive, Ryan Petersen, posted a widely shared thread about the yard crunch, Long Beach issued a temporary 90-day order letting container yards stack boxes four high, or five with fire-department approval, instead of two. Large retailers, among them Walmart, Home Depot, Costco and IKEA, chartered their own ships (reported). Carriers "rolled" contract cargo, leaving it on the quay, in favour of spot cargo that paid several times as much. And cargo owners received bills for demurrage and detention, the charges for leaving containers too long in a terminal or keeping them too long outside it, for boxes they could not collect because the terminals had no appointments, or could not return because the terminals would not take them.