The length of almost two football fields, the cargo ship Jupiter Spirit arrived in Los Angeles’ harbor on April 24 after an almost three-week journey from Japan, ready to unload its cargo of about 2,000 Nissan Armada SUVs, Rogue crossovers and Infiniti sedans in a quick, half-day operation.
But when the ship, operated by Nissan Motor Co.’s freight arm, got about a mile offshore, its captain was ordered to drop anchor. And there the ship remained for almost a week -- a floating symbol of an unprecedented logjam as nearby storage lots covering hundreds of acres overflowed with vehicles that Americans suddenly have little desire to purchase.
There are gluts of all shapes and kinds forming in the U.S. nowadays, a testament to the scope of the economic pain the coronavirus is inflicting. Slaughterhouses are killing and tossing out thousands of pigs a day, dairy farmers are pouring away milk, oil sellers were paying buyers to take barrels off their hands last week, and now, brand-new cars are being left adrift at sea for days.
For the auto industry, which saw U.S. sales plunge almost 40 percent in March, the crisis has left cars gathering dust on dealer lots, dealerships shuttered, auction prices slipping and tens of thousands of workers laid off or furloughed.
“Dealers aren’t really accepting cars and fleet sales are down because rental-car and fleet operators aren’t taking delivery either,” said John Felitto, a senior vice president for the U.S. unit of Norwegian shipping company Wallenius Wilhelmsen. “This is different from anything we’ve seen before. Everyone is full to the brim.”
The Jupiter Spirit’s shipment of vehicles was finally unloaded on April 29. But the auto industry is typically a just-in-time business, which makes the delay at ports like Long Beach so unusual. The majority of the quarter million cars imported from Japan last year came through West Coast ports, mostly via L.A. and Long Beach, according to IHS Markit PIERS data. Some East Coast ports such as in Brunswick, Ga., are experiencing higher-than-normal inventory, but industry officials say the main logjam is on the West Coast.
“It is very abnormal for a container ship, a car carrier or a cruise ship not to go right to the berth, discharge and be on their way,” said Kipling Louttit, executive director of the Marine Exchange of Southern California, a non-profit that monitors commercial ship traffic.
At the Long Beach terminal south of L.A., cars are discharged at one of two piers -- one with a 22-acre lot and another with 168 acres -- that are capable of storing several thousand vehicles. They typically spend little time there before being relocated to larger storage lots five to eight miles away, where costs are lower, said Glenn Farren, director of tenant service and operations at the port. Then they’re gradually sent via truck or rail to dealers.