Cargo piles up as California ports jostle over how to resolve delays

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US shipping operations remain closed due to ports, truck drivers and warehouses not getting enough staff or agreeing to 24/7 operation

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Nike Inc. doesn’t have enough sneakers to sell for the holidays. Costco Wholesale Corp is reimposing limits on paper towel purchases. artificial christmas tree prices jumped 25% this season.

In-spite of this increasing shipping delays and cargo backlog, the busiest US port complex closes its gate for hours on most days and is closed on Sundays. Meanwhile, major ports in Asia and Europe have worked round the clock for years.

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“With the current agenda you have two big ports operating at 60%-70% of their capacity,” said Uffe Ostergaard, president of the North America region for German boxship operator Hapag-Lloyd AG. “It’s a huge operating loss.”

The US supply chain has so far failed to adapt to the crush of imports as businesses race to restore pandemic-battered inventories. Thousands of containers are stuck at the ports of Los Angeles and Long Beach, Calif., two West Coast gateways that transfer more than a quarter of all US imports. There are more than 60 ships lined up to dockThe waiting time has been extended to three weeks.

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Participants in each link in the American chain – shipping lines, port workers, truck drivers, warehouse operators, railways and retailers – blame the others for the imbalances and disagree about whether 24/7 operations can catch them. will help. they’re all struggling with one labor shortage.

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The Ports of Los Angeles and Long Beach are managed separately and operate 13 private container terminals. Long Beach officials said last week they would try to operate 24 hours a day, Monday through Thursday. Jean Cerocca, executive director of the Major Port of Los Angeles, said his port would be more cautious, keeping current hours Waiting for truck drivers and warehouse operators to extend their hours.

“It has become almost impossible to get everyone on the same page towards a 24/7 operation,” Mr. Serocca said.

Shipping and port officials say truck drivers often don’t come on schedule to pick up boxes at a submerged container yard to make room for the next load. Truckers blame terminal congestion, saying that delaying one appointment could cause them to miss the next, and that shipping lines are not doing enough to clear the towers of empty containers taking up space at the docks. Huh.

Before any changes this coming week, the longshore routine at ports includes two shifts: from 8 a.m. to 4 p.m. and a five-hour overnight shift from 6 p.m. to 3 p.m. is available, but this 50% is more expensive and is rarely used. Say liner and terminal operators who collect bills. Cargo pickups are also rare on Saturdays, being charged as a premium shift, and there is no work on Sundays.

The International Longshore and Warehouse Union, which represents dockworkers, said its members would work third shifts or on weekends, but stacks of containers must be brought out of port first, so there is more unloading space from ships.

“Unless everyone steps up and plays their part, the overcrowding will not be fixed,” said Frank Ponce de Leon, a coast committee member at ILWU. “The terminal operators are under-utilizing their option of hiring us for the third shift,” he said.

Federal safety regulations limit most commercial truck drivers to 11 hours of driving time in a 14-hour workday. Port truckers often prefer to start early in the morning to maximize the number of loads they move in a day, said Tom Boyle, chief executive of Quick Pick Express LLC, a trucking and warehousing provider based in Carson, Calif., Away. Not there. port complex.

Night shifts are less popular. Drivers carrying loads till late at night do not have a place to keep them. Truckers may have to park a box in a drop yard, and deliver it later when the destination warehouse is open.

“The biggest issue that probably comes down to it is labor,” said Mr Boyle, who said his company, like other fleets, is constantly looking for drivers.

Labor shortages are also causing significant delays in loading freight trains, which carry up to 30% of all containers to large distribution centers such as Chicago.

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Union Pacific Corp., one of the two main railroads moving goods into the country from the West Coast, is primarily observing delays, or residency, when it picks up cargo from ports and hands over trucks to destinations, Chief Executive Lance Fritz said in a recent interview. “Where we see the residence is at either end,” he said.

Nike officials said Thursday that the amount of time it takes to move a cargo container from Asian factories to North America is now about 80 days, or twice as long as it was before the pandemic. Carrying items such as paper towels or furniture within the US is also a challenge, with Costco officials saying it can be difficult to find a truck or driver on short notice.

“If you work the gate 24/7 it will improve your velocity” only if all participants are involved, said Wim Lagay, chief executive officer of APM Terminals North America, which operates a terminal in Los Angeles. “Up to 30% of total truck appointments are not completed because there are not enough trucks, drivers or chassis.”

Port truck drivers say that some appointment slots go unused because of a lack of equipment, such as the chassis needed to haul containers, or because of restrictions on what drivers can do during that appointment, including empty containers. return is included.

“The terminals are overcrowded with empty containers,” said Matt Schrap, chief executive of the Harbor Trucking Association, which represents carriers at the ports of Los Angeles and Long Beach. Shipping lines aren’t taking boxes out. Which is preventing us from returning the empty spaces we’ve been piling up in our yards,” he said.

Due to such long delays, some cargo owners are no longer making arrangements to lift their boxes. Los Angeles port director Mr Serocca said they use containers as mobile storage units because it is cheaper to leave them at the port. warehouse space for rent.

“even though [warehouses] Jason Tolliver, an executive at the real estate firm Cushman & Wakefield plc, said that were open 24/7, with just no room. About 98% of warehouses are fully occupied in Southern California’s logistics-heavy Inland Empire region, and a 3.6% vacancy rate across the western US.

With scarce warehouse capacity, many truck drivers leave boxes outside of facilities along with the chassis. Liner operators say it usually takes three days to bring the chassis back to port, but now takes eight.

Los Angeles and Long Beach face different challenges than export or transshipment piers to Asia and Europe. Other ports have not faced such high import volumes by so many operators in the past year, while the inland part of the supply chain has remained largely unchanged.

Total container volume at the Port of Los Angeles has grown 30% so far this year compared to 2020, but Mr. Serocca said trucking capacity only increased by 8%. He said development of godowns is equally challenging as there is at least 25 per cent less storage space than required.

“It’s impossible to move such volumes effectively if we don’t move to 24/7 operations across the supply chain,” said Mario Cordero, executive director of the Port of Long Beach. “They do it in other parts of the world.”

To read more from The Wall Street Journal, Click here.


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