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Chinese ships carry more empty containers than full ones out of West Coast ports

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Long Beach and Los Angeles Ports are waiting for container ships to load on Oct. 13 2021.

Carolyn Cole | Los Angeles Times | Getty Images

CNBC exclusive data shows that two Chinese shipping companies are sending more unloaded export containers to the United States than the loaded ones.

CNBC analyzed data about container imports for 2020-2021, from Port of Los Angeles, Port of Long Beach and U.S. customs. PIERS tracks U.S. Customs cargo shipping records.

OOCL (headquartered in Hong Kong) and COSCO (headquartered in Shanghai), were the top two transporters that carried more empty containers than U.S. Exports from Los Angeles.

OOCL saw a decrease of 35.1% in exported loaded containers and a 104.1% rise in empty containers. COSCO transported an increase of 4% in loaded containers versus a 104.6%  increase in empties.

According to OOCL data, the trend in exports to the U.S. West Coast has been declining since 2019. This is due to a number of factors such as changes in market demand. The Long Beach Container Terminal is OOCL’s main hub on the West Coast. We have switched cargo from various ports into Long Beach to reduce our shipping costs and efficiency. This has inevitably led to lower throughput at other ports.

The Port of Long Beach data indicated that OOCL topped this list, with a 3.2% decline in loaded exports compared to a 31.61% decrease in empty exports.

This comes on the heels of another decrease in exported goods at the Port of Los Angeles, reported March. In the past 39 months, there has been a decline in exports loaded to the port. Exports from the United States to this port are at their lowest point since 2002. Similar to what happened at the port, U.S. trades with Long Beach are now at their lowest since 2009.  

Moves by the Government

Federal Maritime Commission is the federal agency charged with protecting U.S. marine trade. By regulation,It recently revealed that its auditing will be expanded to include both large ocean and smaller carrier trade practices.

Congress is currently revamping the Shipping Act of 1985 to possibly prohibit unreasonable export rejections, as described by the FMC. The bill was passed by both the House and Senate in an overwhelming vote. CNBC was informed by sources that negotiations are under way to merge the bill into one piece that President Joe Biden can sign.

Carl Bentzel, FMC Commissioner, has reviewed trade reports from agriculture exporters. He stated that Section 41104(a),(10) states that ocean common carriers can’t ‘unreasonably decline to negotiate or deal’.”

The reasons ocean carriers ship back empty containers from U.S. importers to replace loaded ones are financial.

Freightos Baltic index shows that container leaving China for either the West Coast of the US or the East Coast is priced at more than $15,000 per unit. This price is not paid for U.S. imports. Containers going from the West Coast of America to China cost just over $1,000. Trade disparity has increased due to congestion at U.S. as well Chinese ports. Carriers are now moving more empty containers back into China in order to take advantage of the lucrative route.

Bentzel stated that “I am becoming increasingly worried about the growing discrepancy in import cargoes coming primarily from China and exports to the United States.” The largest gap in import and export shipments since 2008 was evident from the latest statistics I looked at.

The American company has been sending imports to the United States at high prices, he said. He did not consider shipping U.S. goods.

Others carriers saw the export imbalance too, including Mediterranean Shipping Co. (owned by Rafaela Aponte in Switzerland and Gianluigi and Rafaela Aponte in Taiwan), Yang Ming out of Taiwan and Hapag Lloyd from Germany.

M-S-C reported and Hyundai Merchant Marine added that it was preferable to ship empty exports than loaded.

CNBC reached out the ocean carrier transporting containers into and out of Long Beach and Los Angeles Ports for information on trade practices. Hapag Lloyd did not respond to our request for comment. CNBC didn’t reach out to any other carriers.

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