This article shows that it isn’t so easy to divert containers from LA/LongBeach to other ports. The smaller ports don’t have the infrastructure to handle the added containers efficiently. They may not even be able to get drivers to move the incoming containers. And how will they handle empties? Ship them to LA/Long Beach? It’s a complete mess for shippers and forwarders.
The article details some of the techniques people are trying. Each has its own set of problems to wrestle with.
Ryan Petersen, CEO of Flexport, hired a boat to visit the Port of LA/Long Beach to see the traffic jam of ships and observe what the terminals are doing. He came away with numerous suggestions, some of which have appeared in the directive published yesterday by Governor Gavin Newsom.
Ryan is a keen observer of the shipping scene, in addition to being CEO of a fast-growing forwarder.
The problems he detects seem to be yard space for containers, and a shortage of chassis and places to put empty containers to get them off chassis.
The new policy will allow stacking up to six high instead of only two high. That will help out both port yards and inland yards, such as for rail. More land available for stacking will also help, if properties close to rail yards can be identified and assigned for stacking.
Apparently, because empty containers cannot be dropped off, chassis are standing around with empty containers on them, preventing their use for a full container newly unloaded from a ship. A shortage of chassis ready to take a loaded container thus occurs.
How come it is always chassis and empties that cause the problems in the container supply chain?
Apparently the main action so far is to jawbone LA and Long Beach to open for more hours. The Executive Directors of the ports are in line with this.
But port governance gives them little actual power to open the terminals for longer hours. Ports are basically landlords, and have no operational control over the terminal operators, which are several different firms. It’s not clear what the Directors can do to change operations at these private firms.
Some announcements have been made, and it will be worth watching to see if any of the terminals do actually lengthen their hours of service. Doing so would help move cargo quicker, and that is certainly needed right now.
Supply Chain and Logistics 