The Year the Ports Stole Christmas? Hopefully Not.
West Coast Port congestion is such a hot topic that it is featured in general business publications, and even the nightly news. I assume many Logistics Viewpoints readers are busy with their day-to-day responsibilities and have been unable to dig deeper into the status of the port congestion, but would like to know more as it is directly related to one’s day to day responsibilities at work. Furthermore, we are all consumers and dislike being greeted by empty shelves at the supermarket.
The LA and Long Beach Container Vessels
The photos of the cargo ships at anchor waiting for berth at the ports of LA and Long Beach certainly generate an emotional response, “what in those containers will affect my work or personal consumption plans?” The next question is “why don’t they go to another port?” Of course, it’s not that easy. The West Coast only has so much port capacity, and the East Coast and Gulf are separated by the Panama Canal – another potential point of congestion. I decided to review the container throughput data on the four largest West Coast ports to get a better sense of changes in volumes and the degree to which each port supported the West Coast container volumes.
Yup, LA and Long Beach are Critical
If you count LA and Long Beach ports as one, they together rank approximately as the 10th busiest container port in the world, according to the Top 50 Ports — World Shipping Council . Considering the volume of US merchandise imports and the limited number of West Coast container ports, common sense suggests that it may be time to evaluate the expansion our West Coast container port capacity – regardless of the current constraints on these ports. LA and Long Beach account for the majority of west coast port volumes, approximately 75 percent of the volume (LA, Long Beach, Oakland, and Seattle-Tacoma) in September 2021 – the most recent month on record. It is difficult to determine throughput capacity by just looking at the throughput timeline. Although it does appear that Seattle-Tacoma may have a bit of excess capacity. But that is negligible compared to total container volumes.
Current Government and Private Initiatives to Alleviate Bottlenecks
The Biden Administration announced in June that it was establishing a supply chain disruptions task force to address supply-demand mismatched that emerged as the economy recovered. In mid-October virtual roundtables consisting of business, labor, and government representatives developed steps that will be taken to alleviate some of the congestion at the West Coast ports. The Fact Sheet published by Biden Administration outlining commitments from that meeting included the following:
- The Port of Los Angeles has committed to expanding to 24/7 operation. This is a conceptual agreement that will take time to put into action. There are numerous, terminals, parties, and stakeholders involved.
- Large companies are announcing they will use expanded hours to move more cargo off the docks, so ships can come to shore faster. Some of those companies include Walmart, UPS, FedEx, Samsung, The Home Depot, and Target.
On October 14, White House Port Envoy John D. Porcari and Port of Los Angeles Executive Director Gene Seroka held a virtual media briefing. During the briefing, the Port of LA stated that it had the best September container volume in its history, that also include the lowest monthly exports since 2002 (showing that volume is driven by imports). There were 12 days of ships sitting, waiting for berth. It was noted that there were a number of impediments to higher throughput that were being addressed. Key indicators include the reduction of dwell times on docks, rail, or at warehouse and DCs. Meanwhile, some of the levers that can be pulled include secure data sharing to improve efficiency, more off-port properties for grounding containers, and additional labor capacity, including warehouse workers and truck drivers.
Below is a link to a video of the Port of LA Virtual Media Briefing from October 14.
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