The travel and logistics industry has experienced its fair share of disruption this year, and there seem to be no end to the constant delays, container shortages, and resulting supply chain issues.
Leading up to Christmas, many retailers and consumers were under the impression they wouldn’t receive their goods in time for the holidays. Stores began encouraging shoppers to purchase their holiday gift items months in advance. And even then, there was no guarantee they’d get their items in on time.
Before the import surge caused by the pandemic began during the summer of 2020, shipping containers scheduled for local delivery typically dwelled on container terminals for no more than four days. Now, over a year later, those numbers have increased significantly.
However, ports in Los Angeles and Long Beach have begun efforts to unclog the supply chain and lift logjams just in time for Christmas. Other ports along the West Coast have also stocked up on containers to meet the holiday shopping demand.
Earlier this fall, these cargo pileups along these California ports posed a threat to the holiday shopping season, and bottlenecks at L.A.’s port — one of the country’s busiest ports — have lead to shortages along other ports. Fortunately, officials at these ports may have found a solution to help ease the logjam just in time for the holidays.
L.A. and Long Beach Ports Work to Ease Cargo Jams With New Policy
In response to the supply chain crisis, the White House announced it was intervening at the ports of Long Beach and Los Angeles back in mid-October. Since then, the number of container ships in San Pedro’s Bay has increased, and the logjam along the Californian ports is showing gradual signs of improvement.
However, despite these efforts, the logjam along Californian ports didn’t seem to budge.
According to the Los Angeles Times, the biggest problem plaguing the ports is the piles of containers left at the import terminals, which takes up space that belongs to incoming containers. As of late October, port officials have instituted a new policy to solve this problem. Starting November 15, a new fee will be imposed on containers falling into two separate categories.
For containers moving by rail, carriers that say idle for more than six days will be charged; containers scheduled to move by truck dwelling nine days or more will also be charged. Each container will be charged $100 per container, increasing an additional $100 each day per container.
Port of Los Angeles executive director, Gene Seroka, weighs in on the new policy:
“We must expedite the movement of cargo through the ports to work down the number of ships at anchor. Approximately 40 percent of the containers on our terminals today fall into the two categories. If we can clear this idling cargo, we’ll have much more space on our terminals to accept empties, handle exports, and improve fluidity for the wide range of cargo owners who utilize our ports.”
Shipping Companies Already Making Moves Ahead of Dwelling Carrier Fee
With this new fee looming over shipping companies, the West Coast logjam is already starting to lift. According to the L.A. Times, the number of containers that previously lingered for more than nine days is down 14 percent at the port of L.A., and the amount of containers susceptible to the fee has decreased by 26 percent at Long Beach.
While the fee technically hasn’t been put into action yet, it seems to be already meeting its objective. Other shipping companies are making plans to send larger ships to remove empty containers to free up space at the docks.
“With the escalating backlog of ships off the coast, we must take immediate action to prompt the rapid removal of containers from our marine terminals. The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor,” says Mario Cordero, Port of Long Beach executive director.
Matt Schrap, chief executive of the Harbor Trucking Assn., tells the L.A. Times that new cargo is already moving in and out at a much faster rate and that while the number of dwelling boxes is moving very slowly, the point remains that they’re still moving.
Truckers are also taking advantage of this new space opening up at the terminals. Before, scheduling drop-offs and pick-ups were much more difficult with the number of idle carriers taking up space. Now, drivers and drop-off empty boxes and pick-up boxes in the same shift.
Calling All Supply Chain Players to Step Up
“As our economy continues to grow, increased demand and disruptions caused by the pandemic are putting our supply chains to the test,” says John D. Porcari, port envoy to the White House House Supply Chain Disruptions Task Force.
“We need more players throughout the supply chain to keep stepping up.”
Using the fees collected from dwelling cargo, officials plan to create programs to increase efficiency, hasten the movement of cargo, and address the impacts of congestion — specifically throughout the San Pedro Bay area.
Since the trade that flows through San Pedro Bay reaches ports all over the country and generates approximately 3 million jobs nationwide, these programs will also affect the efficiency of other ports throughout the United States.
Shipping Companies Work Overtime This Holiday Season
Operations at Los Angeles and Long Beach ports are set to work around the clock to help alleviate supply chain issues ahead of the holidays. Officials and shipping experts are hoping this effort to improve cargo movement congestion at some of the nation’s busiest container ports will ripple to other ports throughout the country.
While some experts remain uncertain about the future of the nation’s supply chain, many retailers are stepping up and doing their part. Businesses both large and small are working overtime to keep shelves stocked, complete orders, and ensure their customers will get their gifts in time for Christmas.