The FMC is looking into Chinese control of containers and equipment to move them. Most containers and chassis are produced in China. So says Carl Bentzel, an FMC commissioner.
China certainly has a large stake in production of both containers and chassis. There are three state-owned firms in China that dominate container production. Even with elevated prices recently, it is still about the same cost to buy a new container in China for the voyage to the US, or to recycle one from the West Coast of the US. Even if you would rather recycle an empty container, the ocean shipping firms can affect that balance by refusing to pick empties up at say Long Beach or Los Angeles, or delay their transit by long enough to cause headaches for those who need them by a certain date.
If empty containers build up in the US, tying up chassis as well, that’s a form of industrial pollution. Having to spend large sums for storage yards rather than getting them back to China is an environmental cost that should not have to be borne by US local governments and citizens.
It’s certainly worth an investigation and perhaps some action by the US government.
John Gallagher, Washington Correspondent Thursday, May 6, 2021
The problem with 24/7 operation at ports is that no one wants to pay for it. And that is despite the fact that the costs will probably wind up being added to the import cost and passed on to the shipper and customer.
It seems port executives and supply chain players differ in their view of what’s needed. Terminals and warehouse operators and perhaps even drayage firms don’t think 24-hour service is needed to relieve the current congestion. And the staffing costs of staying open 24/7 would rise, with a lot of potential dead time. It is also hard to find additional trained staff today.
Unions are resisting because they claim the port terminals and other unionized players are not willing to hire more union workers.
And the PierPass is being taken unfair advantage of; apparently some are charging higher fees for using the time slots in the hours outside normal working times. See the second article below, which claims PierPass is only incentivizing adjustments that make them more money, rather than enhancing the flow of goods.
Is it possible for port management to get control of this? It’s doubtful under the current port governance rules.
Perhaps we need even more involvement from the federal government or the FMC to get action.
The headline makes you think that things are worse. However, in one way they’re better. Apparently ocean carriers are making a concerted effort to move empty containers out of LA and Long Beach Ports. And that will make a big difference in yard space at terminals.
Figures show that from late October and January 27, there have been 27 sweeper voyages from LA, carrying 68,000 empty containers to Asia, and 29 from Long Beach, carrying 76,000 empties. It sounds like a lot.
Ocean carriers certainly want to avoid the proposed fees at these two ports for letting empties sit in a yard. At times recently around 45% of the containers in the yards at LA and Long Beach have been empties.
However, when you consider that there are more than 600,000 containers per month coming into LA and Long Beach, the number removed does not seem that high— less than 23,000 per month on average from LA and 24,000 per month from Long Beach. It seems that more work is needed. And more jawboning.
And it’s important to also encourage exports using those containers. We don’t want empties being scarfed up when they could be used for exported products, say agricultural products, which are plentiful in California. The effort to create a port-based empty container filling station for ag products on the West Coast could help, but most ag products sail bulk to the Far East.
But I think more pressure on ocean carriers and others is still necessary.