Tag Archives: supply chain disruption

Glimmer of hope: Has the ship gridlock off ports finally peaked?

Flexport’s chief economist seems to think that’s possible.

He points to the fact that there won’t be any more stimulus checks to generate more demand for consumer goods. And the graphs show a rollover after a peak in January. The chart is telling:

Source: American Shipper, Chart: American Shipper based on data from Marine Exchange of Southern California

Flexport is a major broker and forwarder, based in San Francisco. They have a very thoughtful approach to understanding what they face in their markets. A pronouncement from them has some weight. Flexport just managed to raise $935 million to continue their advancement. That’s a bunch of capital.

The backers are big names, too. Andreesen Horowitz is a major VC with many successes to its credit.

It’s too early to declare victory. over port congestion. More demand will come. There is a lot of replenishing of inventory going on. And the excess empty containers at LA and Long Beach, and elsewhere as well, are still a big source of onshore logistics problems. And the truck driver shortage, and the Great Resignation. And demand is still elevated; when people can’t travel or go to restaurants, they buy stuff.

But with recognition of a problem, and it’s certainly well recognized now, people have started to work on solving the many little bottlenecks that conspire to make a supply chain grind its gears. Perhaps we will see a slow unwinding of the problems.

Greg Miller, Senior Editor Tuesday, February 8, 2022

Glimmer of hope: Has the ship gridlock off ports finally peaked? – FreightWaves

Another innovation to move China exports

FedEx Freight has chartered some small ships and arranged with a few shippers to ship full 53-foot containers manufactured in China to the US Port Hueneme, CA. Port Hueneme is a small facility jointly used with the US military. Cargo use is allowed when there is no overriding military activity.

Doing this will allow FedEx Freight to bypass the logjams at the Port of Los Angeles and the Port of Long Beach. It also allows FedEx Freight to put the containers on its rail network for long-distance transport to inland locations. FedEx Freight is mostly an LTL service; ultimately most of the containers will be unloaded at a FedEx depot for the last mile of transport.

Other firms have been following similar strategies recently. It’s one way of getting past the bottlenecks in the LA/LB area. That should help FedEx customers. But the ships are small, and the volume will not be large. It will also produce more empty containers here in the US, and FedEx will need to figure out where to put them and how to get them back to China or elsewhere for another trip.

To the extent the bottleneck is due to surplus empty containers and a shortage of chassis, and irrational appointment behavior for delivery of empties, all this does is route a bit of cargo by another path. But no one should be criticized for examining and using alternate strategies in these hectic times.

Eric Kulisch, Air Cargo Editor Friday, January 14, 2022

FedEx Logistics charters vessels to move China exports, rail containers – FreightWaves

New fees for lingering containers at LA/Long Beach Ports

To get the attention of shippers and carriers, the Port of Long Beach and the Port of Los Angeles have instituted escalating fees for containers that are not picked up at the port. The fines start at $100 per day and go up with each following day.

These fees have been endorsed by the US Supply Chain Disruptions Task Force.

There are lots of efforts to try to give ocean carriers and shippers incentives to move cargo out. Railroads UP and BNSF also are planning to offer rebates to shippers who move cargo to them on weekends, using the longer time windows at the ports. The large rails are also taking other steps to improve flow. UP is reopening an idled rail terminal in the Chicago area, near the Centerpoint logistics complex. The refunds apply to containers in-gated at the ICTF (Intermodal Container Transfer Facility) in Long Beach CA. BNSF’s rebates apply both to LA and Long Beach.

We’ve also heard about California Governor Gavin Newsom’s efforts to find space to store containers, by leasing empty land near key transfer points.

Naturally, there are complaints about fees, which will surely be passed on to consumers. And many point to the general logjams for containers at warehouses and other choke points in supply chains. Dispersed bottlenecks are harder to do anything direct about; perhaps a money impact is the best way to get these diverse players to work harder to relieve the jam-ups.

And there’s a bit of contradiction, with the FMC looking into excessive demurrage and detention fees at port terminals, a long-standing gripe of shippers, while watching two ports add to those burdens.

Yet, there is some action. So the complaining is good, and a variety of approaches makes it more likely that the logjam will start to abate as more folks speed things up all over.

Read the articles for more details and different views.

Eric Kulisch, Air Cargo Editor Wednesday, October 27, 2021

Joanna Marsh Tuesday, October 26, 2021