The backup of container ships off the coast of Southern California, which was central to the congestion of the US supply chain during the Covid-19 pandemic, has effectively disappeared.

The queue of ships waiting to unload at the ports of Los Angeles and Long Beach fell from a peak of 109 ships in January to four ships this week, according to the Southern California Marine Exchange. Shipping specialists say fewer ships than usual will be heading to the main US gateway complex for imports from Asia in the coming days and cargo volumes that have long flooded ports are now declining.

Bottlenecks continue to slow freight at other major US seaports and domestic freight hubs, but the end of backup at major California ports indicates that the broader supply chain tangle that has been troubling retailers and manufacturers is unwinding.

“It’s obviously good considering the extent to which these supply chain restrictions drove inflation last year,” said Sameera Fazili, a deputy director of the National Economic Council who leads the White House Task Force on supply chain disruptions. .

Port and Biden administration officials point to a range of factors that have helped ease congestion, including a tighter queuing system that caused ships to queue further out in the Pacific, new container yards that freed up space at the docks, and government initiatives that improved promoted cooperation between retailers, ports, railways and truck drivers.

But the biggest gain is probably due to fewer boxes reaching the busiest US seaport complex for container imports. U.S. import volumes are declining, according to trade data analysts, and a growing proportion of shipments are headed to ports on the eastern and gulf coasts as importers move out of Southern California’s backup.

The backlog of container ships from New York to Houston is putting pressure on troubled supply chains in the US WSJ’s Paul Berger explains what is contributing to the congestion and the impact it is having on the economy. Photo illustration: Adele Morgan

The ports of Los Angeles and Long Beach combined handled 686,133 loaded import containers in September, 18% less than a year earlier and the lowest level since June 2020, according to port figures. Imports in August fell by 12% year-on-year, a sharp drop during the traditional high season for shipping.

Ports such as Savannah, Georgia, Houston and New York and New Jersey have experienced backups caused by the diverted cargo. But in recent months, big-box retailers have canceled many orders after a rush of orders earlier in the year and changing consumer buying patterns left the merchants overstocked.

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Descartes Datamyne, a data analytics group owned by supply-chain software company Descartes Systems Group Inc.,

says container imports to the US fell 11% in September from a year earlier and 12.4% from August.

With demand declining, shipping lines have canceled between 26% and 31% of their Pacific sailings in the coming weeks, according to Sea-Intelligence, a Denmark-based shipping data group, indicating carriers are preparing for an ongoing decline in numbers. bookings .

The Southern California backup began on Oct. 15, 2020, when the Marine Exchange reported that five ships were lining up to unload at the Los Angeles-Long Beach complex, an unusual number compared to the one or two ships that sometimes have to wait. The queue grew as dozens of ships and shipping containers poured out of overcrowded ports as Americans trapped at home under Covid-19 restrictions ordered massive quantities of household items, office equipment and electronics, leading to a 20% increase in imports in 2021.

Gene Seroka, executive director of the Port of Los Angeles, said at one point he viewed the scene by helicopter from the port complex to Ontario, California, nearly 60 miles offshore. “Everywhere you saw containers piled up. It was great,” he said.

Backups also hit other US ports and seaports in Europe and Asia, as shipping delays spread and ships got stranded as companies sought space to move their goods. In January 2022, according to Sea-Intelligence, only 31% of container ships arrived in ports on time, up from about 70% before the pandemic.

The backups slowed deliveries of furniture, appliances and household goods to consumers and pushed ocean shipping rates to record prices, pushing inflation in the US to a four-decade high.

In September 2021, the average cost of shipping a container from Asia to the US West Coast was more than $20,000, a sixfold increase from a year earlier, according to the Freightos Baltic Index. Last week, the average cost of shipping a container from Asia to the US West Coast was down 84% from a year earlier to $2,720.

Write to Paul Berger at Paul.Berger@wsj.com

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