We were unable to ship the item.
An optimist waits for good news on the horizon. A person in the transportation industry looks out to the horizon and sees container ships at anchor.
A month ago, I wrote about how congested the supply chain for imported goods was at the ports of Los Angeles and Long Beach. The parking lot at San Pedro Bay became even more crowded at the end of October.
On October 13, President Joe Biden announced that the Port of Los Angeles would begin operating 24 hours a day, seven days a week, joining the Port of Long Beach, which had previously done so. Unfortunately, the change in opening hours doesn’t appear to have an effect on port congestion, at least not anytime soon.
The Pacific Merchant Shipping Association said the residence time for cargo destined for trucks was nearly six days in September, which the PMSA called a record. This means that a container unloaded at the docks remains there for six days before being moved to a bonded warehouse or other area; before the pandemic, the residence time was less than three days.
For goods to be transported by rail, the residence time fell to 5.5 days in September from more than eight days in August. But the PMSA said preliminary data showed an increase for October.
“Container residence time allows us to see how long containers are staying in terminals before being picked up, and they are staying too long,” said PMSA President John McLaurin. “The terminals are drowning in imports. The need for freight owners to recover their containers in a timely manner is greater than ever. “
On October 25, the two ports announced that they would begin charging ocean carriers $ 100 per day for each container that resides in marine terminals. For containers scheduled for transport by truck, the surcharge begins after nine days; for rail containers, it begins after three hours.
The supplement increases in increments of $ 100 on subsequent days.
“With the increasing build-up of ships offshore, we must take immediate action to encourage the swift removal of containers from our marine terminals,” said Long Beach Port Executive Director Mario Cordero, who attended. Biden’s 24/7 announcement in mid-October. . “The terminals are running out of space, and that will make room for the containers sitting on these ships at anchor.”
The problem of the supply chain in ports is not a unique problem; it’s a cascade of problems. Ships cannot be unloaded due to manpower and equipment constraints, unloaded cargo does not always have a place to go as the warehouses are full of previously unloaded containers, which cannot be displaced due to a lack of drivers and equipment, and so on and so on.
“The problems are legion,” said Doug Voss, professor of supply chain management at the University of Central Arkansas at Conway and a board member of the Arkansas Trucking Association. “You have to solve all the problems that arise at every node in the supply chain to solve the whole problem. “
In Biden’s announcement, he mentioned that Walmart Inc. of Bentonville is committed to “increasing by up to 50%” the movement of its cargo from ports during off-peak hours. The theory is that opening ports 24/7 will allow more efficient movement of goods; Biden said the cargo moves 25% faster at night than during the day.
Supply chain problems are now looming in America because it is a country of consumers and Christmas is approaching. Voss said he doesn’t expect a quick fix as supply chain issues like a bunch of tangled Christmas lights will take some time to unravel.
“These supply chain shocks put everything in a state of imbalance,” Voss said. “The supply chain works best when everything is fluid, stable and predictable. When you put those shocks into a system that’s built on predictability, you get what we have right now. “