How fast can LA clear out its ships?
US President Joe Biden met with Caleadership at the ports of Los Angeles and Long Beach, and the International Longshore and Warehouse Union (ILWU) on Wednesday to discuss supply chain challenges.
Now that the ports of Los Angeles and Long Beach have moved to 24/7 operations, pressure is mounting to reduce the backlog of ships at anchor in San Pedro Bay.
But more coordination will be required among the links in the Southern California supply chain before that can happen. And with 25 more containerships filled with holiday inventory from Asia scheduled to anchor within the next three days, results have to come fast.
As part of the ports’ new 24/7 operating plan, instead of waiting for cargo owners to pick up their cargo when they are ready – a “pull system” – the ports are using a “push system” to identify cargo owners and get commitments from them to pick up their containers.
Following are some factors:
- Port truckers struggling
Todd Spencer, president and CEO of the Owner-Operator Independent Drivers Association, said truckers have already been operating around the clock “but are often restricted by factors beyond their control, such as excessive detention time and the lack of readily available, safe parking for their trucks”
"It’s not realistic to expect the supply chain will suddenly operate efficiently on a 24/7 schedule when drivers aren’t being fully paid for their time.”
- Major export lag
Despite the backlog of ships waiting to get into the port with overseas imports, the port recorded its best September in its 114-year history, Seroka confirmed, with total container volume of approximately 900,000 TEUs driven by high consumer demand.
At the same time, however, exports at the port were at record lows. Outbound loaded containers at the port fell to 76,000 TEUs, a 42% drop compared to last year and the lowest since 2002. The ratio of imports to exports came in at a high of 6:1, the widest monthly gap recorded at the port.
Rolling out 24/7 nationwide
John Porcari, who is coordinating the move to 24/7 operations as port envoy to Biden’s Supply Chain Disruptions Task Force, said that getting major box retailers to commit to 24/7 operations for at least the next 90 days represents the other half of the solution to clearing out the ports. He believes the change represents a “nationwide” opportunity.
One of the keys to accomplishing that goal, he said, is secure data sharing — something that has so far eluded the industry. The ports of Los Angeles and Long Beach are doing it at their end, cargo owners are doing it at theirs, and now need to energize the rest of the system.”