How Much Did Carrier Alliances Really Contribute to NY-NJ Port Congestion?

Posted on October 30, 2015 by | Leave a comment

This is an older (May 2015) article about the congestion situation at the port of New York/New Jersey and its relation to container shipping alliances.  It’s still true by and large. It is based on a Journal Of Commerce (JOC) article.  Chassis are still to blame in large part at these ports.  I’m sure there’s more to it if you’re inside.  But the point is clear.

Ports and Terminal operators need to address these downstream issues that affect how reliably cargo gets to end customers, and so do the ocean carriers.

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You might be disappointed to hear that port congestion probably won’t ease as much as you expected despite the agreement between the IWU and the PMA.

Source: If NY-NJ Port Congestion Persists: How Much Did Carrier Alliances Really Contribute? – Penn Intermodal Leasing, Inc

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Posted in Logistics, Ports, Production Operations, Shipping, Supply Chains, Trucking

HTA complains: illegal activity during drayage protests

Posted on October 30, 2015 by | Leave a comment

More angst in trucking at Los Angeles and Long Beach.  Are terminals really locking out certain trucking companies who are locked in struggles with employees who are seeking employee and union status?

American Shipper

Source: HTA complains of illegal activity during drayage protests | AS Daily Newsletter | AS Daily | American Shipper

It’s illegal of course, but clearly those drayage firms are not able to offer the same guarantee of service as others who are not experiencing conflict.

The question, from a labor economics standpoint, is whether the terminal actions are somehow putting them in league with the unions.  Remember, earlier when the Clean Trucks program was under discussion, the ports wanted to make everyone a union driver, working for a large company.  That way, the ports thought they could insure the firms would buy new trucks to modernize the fleet– they had sufficient capital, and that would reduce the need for subsidies.    But owner-operators complained bloody murder, the case went to the US Supreme Court, and it was ruled that drivers could not be compelled to be union members or employees.

So terminal operators had better be careful.  It seems to me that the current situation could be interpreted as a sort of tacit collusion with the Teamsters’ union.  Teamsters have a major share of the unionized drivers, and certainly are the biggest labor union player in the debates at these ports.

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Posted in Labor Economics, Logistics, Ports, Trucking

Conflicts That Cause Companies to Stockpile SKUs

Posted on October 30, 2015 by | Leave a comment

I am posting this article mostly for my students.  It’s about inventory, folks!

Source: Conflicts That Cause Companies to Stockpile SKUs

How you group items makes a big difference in how you set service levels (fill rates or safety stock levels) in the face of variable demand.  When you have so many SKUs in stock, you have to group them or there’s too fragmented data to get good forecasts.  But how you do that grouping is important for the accuracy of forecasts and order quantities and timing.  And the researchers (graduate students, probably only a few years older than you) found that employees tended over time to misclassify SKUs in the groups, causing errors to creep in.

So the issue is the classic operations management or supply chain management dilemma. We know what to do.  Why aren’t we doing it?  At the end the subject is not about figuring the numbers, it’s about convincing people to do what they ought to.

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Posted in Leadership, Logistics, Production Operations, Supply Chains