Tag Archives: supply chain disruption

Another innovation to move China exports

Posted on January 18, 2022 by | 1 comment

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
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New fees for lingering containers at LA/Long Beach Ports

Posted on October 27, 2021 by | 1 comment

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

https://www.freightwaves.com/news/ocean-carriers-will-pass-on-fines-for-lingering-containers-to-importers

Joanna Marsh Tuesday, October 26, 2021

https://www.freightwaves.com/news/up-bnsf-offer-incentives-to-move-containers-away-from-la-long-beach

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Southern California: more records broken as vessels at-anchor reaches triple figures

Posted on October 20, 2021 by | Leave a comment

Triple figures is worth reporting, even though we’ve been hearing about this problem for a long time now. And it seems no one will put up the money to do something about it.

Opening terminals to 24 hour operation would clearly improve things. It would not be a total solution, because the drayage trucks and warehouses, and container flows and availability, would still need to be coordinated. But it would be a start.

But 24 hour operation for terminals means more longshoremen and staff would need to be employed. Terminals will not be willing to hire these new longshoremen as union workers, because they don’t see a long-term need for them. When the rush abates, they can’t fire them readily.

It’s a similar story for drayage, though they have more flexibility, with the ability to use owner-operators if they can get them. But with the driver shortage, this kind of transport is one of the hardest hit– drayage carriers have been so ready to alter contracts for delivery and pickup of cargo and chassis that drivers don’t want to do this work. They’d rather be doing construction work.

The situation with warehouses is similar. Keeping a warehouse open for extended hours to be sure trucks can get in and out requires more staffing, and the firms don’t want to put out the money. Warehouse workers are often on 90-day contract time frames; many these days are supplied by temp agencies rather than the warehouse operator. The warehouse operator would need to commit to a much larger workforce, and on overtime at that, to handle extended hour deliveries.

I am starting to think it all comes down to businesses not wanting to extend their labor requirements. People don’t want to give work to people, or institutions and rgulations are now flexible enough to allow people to go to work and get the job done.

It’s more than just jawboning the port authorities, who have little to say about their terminals’ operations or labor practices, and almost no influence. Ports themselves have no leverage except as a contract for port spavce comes up for renewal. And most are nmany year contracts. That’s the dilemma of current port governance practice.

19 October 2021 Jack Donnelly Ports and Terminals, Shipping Lines

Southern California: more records broken as vessels at-anchor reaches triple figures – Port Technology International

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Posted in Labor Economics, Logistics, Shipping, Supply Chains

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