New Cars Stuck In Ships At Ports: Nobody Wants Them

Nobody is buying new vehicles because of the coronavirus crisis so imported cars at the ports are stacked to the brim. It’s so bad that now some container ships are stuck for days or weeks anchored off the ports waiting to offload their car-cargos. It takes three weeks for a container ship to arrive from Japan to the Port of Los Angeles. Each ship holds about 2,000 vehicles. Unloading these ships is highly coordinated. 

Once ships arrive at the port the process takes about half of a day, then the ships head back to Japan. But not anymore. Cars are now stuck in these ships waiting at the ports because nobody wants them. “It’s very abnormal for a container ship, a car carrier or cruise ship not to go right to the berth, discharge and be on their way,” Kipling Louttit, executive director of the Marine Exchange of Southern California, told Yahoo Finance.

New cars are being crammed everywhere in and around Los Angeles

Container ships off of the coast of the Port of Long Beach | Getty

Driving in and around Los Angeles you see them crammed everywhere. Lots are filled with new cars just sitting. Companies are running out of places to store them. Dealers are filled up, too. Some dealers are telling customers with cars coming off of leases they’ll only take the off-lease vehicle if they lease a new one. When main offices are told this they say it’s up to the dealers. It’s a back-and-forth mess.

From crude oil to milk and pigs; there is a logjam of products because demand has dropped like a stone. Unfortunately, dairy farmers are dumping their milk, and farms have to kill thousands of pigs. But you can’t just dump new cars into the ocean.

Even fleet buyers aren’t buying cars now

Imported vehicles sit in a lot after being off-loaded at the Port of Los Angeles | Getty

Even fleet buyers like rental car companies are not buying vehicles. In fact, Hertz is looking for government support to avoid a bankruptcy filing this coming week. Hertz is considering holding a fire sale of much of its fleet of rentals to repay bonds coming due.   

Some ships are seeking other ports to get rid of their cargo. Up the coast from Los Angeles is Port Hueneme in Ventura County. After its storage area filled with 4,000 vehicles, it had to find room for an additional 6,000. After it filled up local college parking lots it leaned on a US Navy base to help with the storage problem.

Sporting arena parking lots and even fields are storing vehicles

New cars from Porsche sitting at the port | Getty

Since sports gatherings in the Los Angeles area have been canceled for the foreseeable future some companies like Toyota Motor Corp. are using their playing fields to store vehicles. 

In some cases, ships are able to unload vehicles quickly. But then they wait outside of the port for days. They are waiting for the next assignment because car shipping has stopped. That’s the next problem on the horizon.

Soon these ports may go from glut to gloom

These ports may soon go from glut to gloom. There is an expectation that with car sales expected to be far worse than the Great Recession the time is fast approaching when no cars will be shipped. These packed ports may become ghost towns. Right now it is estimated that auto-import companies have laid off 80% of their workforce. 

Yes, it’s looking to be a scary immediate future. Let’s hope the economy springs back to some form of normalcy by summer. Because that’s when the 2021 models start arriving at our ports.